European Union : The Largest Market and Trading Zone for the Healthcare Industry
The accession of ten more central and east European countries to the European Union (EU)-15 in 2004 has created a single European market, the largest market and trading zone for the healthcare industry with almost 500 million consumers. The total healthcare industry comprising pharma-ceuticals and drugs, medical devices and equipment, and health services is expected to grow at a compound annual growth rate of 6.4 per cent from 2003 to 2008.
“This can be achieved by enforcing international standards of intellectual property protection and a sustainable basis for the industry to supply innovative medicines throughout the EU,” states Research Analyst Lasya M. Narasimhachari from Frost & Sullivan .”The future availability of new drugs is expected to be influenced by the radical differences in economic and market conditions and the healthcare coverage for medicines between the present EU-15 and the accession countries.”
Apart from pharmaceuticals, the European market for medical devices is also thriving, having earned USD 41.2 billion in 2002. In fact, Europe is the second largest market for medical devices and equipment followed by the United States and Japan. This popularity could have something to do with the acknowledgement that prevention is just as important as therapy.
“The growth of the pharmaceuticals and drugs as well as medical devices and equipment segments is directly linked to the health services segment,” notes Ms. Narasimhachari. “An increase in the number of hospitals, nursing homes, home healthcare services, dental services and laboratory services are given high priority in national healthcare expenditure, which could help in the growth of the three segments.”
The factor that can affect all three segments is the health policies in the EU. Public and private health insurance funds play a critical role in drafting drug reimbursement policies. The social protection structure is expected to undergo several changes and the resultant reforms could lead to increased out-of-pocket expenditure.
To contain costs and spending on healthcare, governments have instituted policies to control prices, wages, number of hospital beds and size of the healthcare workforce, and place caps on health spending as well as shifting costs to the private sector. While some countries impose wage controls on their public sector healthcare workers, some others determine prices for medical services after obtaining approval from purchasers and providers of healthcare.
“The process of economic integration has been a catalyst to the diffusion of health technology and opened national markets to competition, tending to equalize prices and reduce costs,” observes Ms. Narasimhachari. “Technological progress is expected to become a key factor for economic growth and help meet the challenges posed by an ageing society.
(Ref : Frost & Sullivan’s Country Industry Forecast - European Union Healthcare Industry, Code: 4550.
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