A SWOT Analysis of the Greek Pharmaceutical Sector

Objective: The study aims to analyze the strengths and weaknesses of the pharmaceutical sector, as well as the opportunities arising today and the factors threatening its future development. Its main goal is to provide an accurate picture of the market conditions, in order to act as a tool in the decision making process of both pharmaceutical companies and the State. Methodology: All available statistical data relating to supply, demand, external trade, competition and financial statement analysis of the pharmaceutical sector were taken into account. Data were extracted from the National Statistical Service of Greece, OECD, Eurostat, as well as IOBE studies. A Strengths-Weaknesses-Opportunities-Threats (SWOT) analysis was conducted, combining both quantitative and qualitative aspects of the pharmaceutical sector's internal and external environment. Results: Increasing turnover and profitability over time, as well as a fourfold - compared to the rest of the economy - return on capital are undoubtedly pharmaceutical sector's main strengths. The highly educated personnel, in combination with the continuous investment on staff training and technological equipment, also constitute important assets to the industry. Pleasant working environment and current implementation of several development strategies are additional strengths. On the other hand, the almost inexistent levels of R&D and the focus of domestic production on generics can be considered as the main weaknesses of the greek pharmaceutical sector. Additionally, the market is heavily regulated, with a very tight pricing policy for both prescription and OTC products. Pharmaceutical policy is fragmented, as there are too many competent authorities participating in decision making. Greece's geographical position provides an opportunity to convert the country to a significant production and distribution centre in the Balkans. Opportunities also include the provision of incentives to conduct R&D. Finally, failure to implement economic evaluation in pharmaceutical policy making and to control for hospital debts (which currently amount to 1.23 billion) and prescription and reimbursement processes constitute major threats to the pharmaceutical sector. In addition, the recent revision of the System of National Accounts - which resulted in a very different and questionable picture of the pharmaceutical market- also represents a threat to rational decision making. Moreover, parallel exports account for 25% of total pharmaceutical sales and although the new pricing system is expected to pull them down, the greek prices will still be among the lowest in EU and therefore permit exploitation of price differences through parallel trade. Market access delays of new drugs as well as slow implementation of pharmaceutical reforms also create an unstable and obscure business environment. Conclusions: The greek pharmaceutical sector contributes positively to the country's GDP and employment. However, positive trends are frequently obstructed by the state's pharmaceutical policy.