Athens, June 2nd 2016

Nikos Vettas

Professor, Athens University of Economics and Business

General Director of IOBE

www.iobe.gr

vettas@iobe.gr, http://www.aueb.gr/users/vettas

1

Challenges for tomorrow: the Greek economy and the health care sector

52nd AESGP Annual MeetingThe future of self-care: Shaping the new environment

GDP per capita

Source : AMECO

2

0

5

10

15

20

25

30

35

€ t

ho

usa

nd

Εuro area (12 countries) Greece

Key Macroeconomic and Financial Figures

3

Key Macroeconomic Figures 2009 2013 2014 2015 2016 2016*

GDP -3.1 -3.2 0.7 -0.2 -0.3 -1.0

Unemployment 9.5 27.5 26.5 24.9 24.7 25.2

General Government Balance1 -15.6 -12.4 -3.6 -7.2 -3.1 -3.0

Current Account Balance -14.4 -2.2 -3.0 -0.2 0.6 0.2

Harmonised Inflation 1.3 -0.9 -1.4 -1.1 -0.3 -0.2

Gross Fixed Capital Formation -13.7 -9.4 -2.8 0.7 -0.9 -4.0

1Including State aid to the banking sector on the deficit* IOBE projectionsSources: Eurostat/European Economic Forecast, spring 2016, European Commission

Real effective exchange rate

4

Real Effective Exchange Rate (deflator: CPI - against 37 trading partners)Real Effective Exchange Rate (deflator: unit labor costs in total economy - against 37 trading partners)

Source: Eurostat

80

85

90

95

100

105

110

Real Effective Exchange Rate (CPI), 2005=100

Greece Portugal

80

85

90

95

100

105

110

Real Effective Exchange Rate (ULC), 2005=100

Greece Portugal

InvestmentsGross Fixed Capital Formation (% of GDP)

5

Source: AMECO

0

5

10

15

20

25

30

Euro area (12 countries) Greece

Foreign Direct Investment (% of GDP)

6

FDI as a % of GDP

2000-2008 2009-2015

Germany 3.0% 1.7%

Ireland 21.0% 27.9%

Greece 1.1% 0.6%

Spain 4.2% 2.1%

Portugal 3.7% 4.3%

Source: Eurostat

-10%

0%

10%

20%

30%

40%

50%

60%

Germany Ireland Greece Spain Portugal

Trade balance (Goods and Services)

7

Sources: ELSTAT/European Economic Forecast, spring 2016, European Commission

-31,8

-24,3-19,5

-12,9

-6,6 -4,5 -4,9 -2,9 -2,6 -2,0

-40

-20

0

20

40

60

80

100

bil

lio

n €

Balance Imports of goods and services Exports of goods and services

Harmonized Inflation

8

Sources: Eurostat/European Economic Forecast, spring 2016, European Commission

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

ΕA-19 Greece

Budget Primary Balance (% of GDP)

9

Source: European Economic Forecast, spring 2016, European Commission

-12

-10

-8

-6

-4

-2

0

2

4

Greece ΕA-19

Pensions Payments (% of GDP)

10

Sources: Social Budget 2009, Ministry of Labour & Social Security, 2010/Eurostat

5,0

7,0

9,0

11,0

13,0

15,0

17,0

% G

DP

Greece EA-18

Public spending on Health (% of GDP)

11

2

3

4

5

6

7

8

EA-19 Greece

Public Spending categories (% of GDP)

12

0

1

2

3

4

5

6

7

8

Defence Health Education

Source: Eurostat

Poverty and social exclusion

13

Source : Eurostat

0

5

10

15

20

25

30

35

40

% p

op

ula

tio

n

Greece ΕA-18

Direct taxation (% of GDP)

14

* Projection ** ForecastSource: State Budget, 2005-2016, Ministry of Finance

0%

2%

4%

6%

8%

10%

12%

14%

Direct Taxation - Total Profits-Income Real Estate Property Past Years

Public Revenue- Expenditure – Primary Balance (% of GDP)

15

-12

-10

-8

-6

-4

-2

0

2

4

0

10

20

30

40

50

60

70

Gen. Government Expenditure (l.h.s.) Gen. Government Revenue (l.h.s.) Primary Balance (r.h.s.)

Health expenditure, 2013 (% GDP)

Source: OECD, Health Data 2015,SHA, (1) Estimations (2) Data 2012

16

0

2

4

6

8

10

12

14

16

18

USA

Th

e N

eth

erl

and

s

Sw

itze

rlan

d

Ge

rman

y

Sw

ed

en

Fran

ce

De

nm

ark

Can

ada

(1)

Be

lgiu

m

Jap

an

Au

stri

a

Ne

w Z

eal

and

(1)

Po

rtu

gal

(1)

Sp

ain

(2)

No

rway

Avg

OE

CD

Ital

y

Au

stra

lia (

2)

Slo

ven

ia

Ice

lan

d

Gre

ece

Fin

lan

d

UK

Ire

lan

d (

2)

Slo

vaki

a

Isra

el (

1)

Hu

ng

ary

Ch

ile

Ch

ezh

Rep

.

Ko

rea

Luxe

mb

urg

(2)

Po

lan

d

Me

xico

Est

on

ia

Tu

rke

y

% G

DP

Average per capita health expenditure growth, 2005-2009 vs. 2010-2013

17

Πηγή: OECD, Health Statistics 2015

-7,2

-4,3 -4 -3

,3

-1,6

-1,6 -0

,8 -0,3

-0,2

-0,1

0,3 0,5

0,5 0,6

-2,3

0,9 1 1 1,3 1,7 2 2,

3

5,4

-0,4

5,3

1,3

3,5

0,5

3,4

3,2

5,4

3,6

6,7

3,2

3,4

11,3

0,8 1,

5 2,2

1,7

1,7

3,3

2,8

8,4

-10

-5

0

5

10

15

2005-2009 2009-2013

Health Expenditure, Public Health Expenditure (in mil. €)

18

Πηγές: System Health Accounts 2013, EL.STAT, 2015, Data processing: ΙΟΒΕ

23.177 22.269

19.599

17.106

15.777

14.712

16.098 15.582

13.188

11.408

10.021

8.776

0

5.000

10.000

15.000

20.000

25.000

2009 2010 2011 2012 2013 2014

health expenditure mil.euro

Current health expenditure Current public health expenditure

Per capita net public pharmaceutical expenditure in Greece, EU and EZ-15

19

Source: System of Health Accounts (SHA) 2013, EOPYY 2014, State Budget 2014: Executive Summary, OECD Health Data 2015, Eurostat, data processing IOBE.

456

404

337

257

216

183

284 286 276 265 260

323 323 311

300 295

-

50

100

150

200

250

300

350

400

450

500

2009 2010 2011 2012 2013 2014

€

Greece EU (22) EZ (17)

Breakdown of NHS hospitals expenditures, 2012-2014 (in mil. €)

20

740 615 531

368

331 316

62

61 62

163

154 134

505

440

360

200

185

215

2.038

1.786

1.618

-

500

1.000

1.500

2.000

2.500

0

500

1000

1500

2000

2500

2012 2013 2014

Medicines Medical Supplies Orthopedical materials

Chemical Reactors Services Outsourcing/ other expenses

Total

Source: Ministry of Health

Monthly average pharmaceutical purchases and receipts in the kind of households, 2008 - 2014

Source: EL.STAT. 2015, data processing IOBE

• During the economic crisis period there was a shift of household expenditure towardspharmaceuticals and hospital care.

21

19,3% 19,2% 22,1% 22,1%27,4% 32,4% 33,3%

15,2% 17,5%20,0% 23,3%

27,4%

27,9% 29,3%29,8%29,4%

26,7% 23,3%

18,8%16,1% 15,0%

21,2% 20,1% 18,0% 17,3%14,3% 11,7% 10,8%

10,7% 9,7% 9,3% 9,2% 8,5% 8,7% 7,8%

2,9% 2,6% 2,3% 3,3% 2,3% 1,7% 1,5%1,1% 1,5% 1,5% 1,5% 1,4% 1,5% 2,3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009 2010 2011 2012 2013 2014

Pharmaceutical products Hospital services Dental servicesMedical services Paramedical services Therapeutic appliances and equipment

Added Value Pharmaceutical Sector Production

22

Source: Eurostat,2015, data processing IOBE

805

746

672

505 519

624 616

507474

533

4,6%

4,0%

3,4%

2,8%

3,4%

3,8%

3,2%3,0% 2,9%

3,1%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

3,5%

4,0%

4,5%

5,0%

0

100

200

300

400

500

600

700

800

900

1.000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

%mil.€(2010)

Value added mil.€ (2010=100) Share of pharmaceutical sector in total manufacturing

Pharmaceutical sales in value,Greece, 2008-2014 (bln €)

23Source: EOF 2015 (Pharmacies/Wholesalers at retail prices and Hospitals at hospital prices)

6,55

7,00

6,03

5,56

4,61

3,96 3,88

1,47 1,47 1,31 1,20 1,36 1,34 1,40

0

1

2

3

4

5

6

7

8

2008 2009 2010 2011 2012 2013 2014

bil. euro

Pharmacies/Wholesalers Hospitals/EOPYY farmacies

Approximately 73,5% of total sales were supplied to wholesalers and private pharmacies and 26,5% of sales to hospitals & EOPPY pharmacies

Pharmaceutical Sales in Greece, volume, 2008-2014

24

Source: EOF 2015 *Possible smaller packaging replacements

469,0 465,8434,3 424,3

394,8 404,6 416,1

97,5 96,8 86,9 88,1 84,5 80,0 77,1

566,5 562,5

521,2 512,4

479,4 484,6 493,2

0

100

200

300

400

500

600

2008 2009 2010 2011 2012 2013 2014

mil. packages

Pharmacies/Wholesalers Hospitals/EOPYY farmacies Total

OTC sales, 2012-2014 (in mil. €)

25

Source: AESGP, 2015, IMS, 2015Note: Depending on the source of information used, there may be deviations over EOFs’ sales data.

258,4

292,3

331

78,283,5

95,9

0

20

40

60

80

100

120

0

50

100

150

200

250

300

350

2012 2013 2014

mil.euromil.euro

Value Volume

OTC total Sales across countries, 2014

26Source: AESGP, 2015 *Note: Different definition of OTC in Greece and other European counties

44

46

54

59

75

166

211

212

261

331

387

471

575

623

642

741

774

997

999

1.344

1.541

2.429

2.734

6.200

6.502

0 1.000 2.000 3.000 4.000 5.000 6.000 7.000

Turkey

Estonia

Croatia

Latvia

Lithuania

Denmark

New Zealand

Portugal

Finland

Greece

Hungary

Argentina

Sweden

Belgium

Switzerland

Netherlands

Austria

Spain

Ukraine

UK

Mexico

Italy

Poland

Brazil

Germany

OTC share in Greece isamong the lowestcompared with the restof Europe.However, the respectivemarket shares dependcrucially on the range ofnon-prescriptionmedicines included ineach country.

OTC sales by group in Greece, in mil.€

27

Source: AESGP, 2015, data processing IOBE

OTC groups 2012 2013 2014 %13/14

% of

total,

2014

Cough and cold 54.5 60.1 66 9.8% 19.9%

Analgesics 56.3 58.9 67 13.8% 20.2%

Digestives 17.3 20.6 24 16.5% 7.3%

Skin treatment 24 27 28.5 5.6% 8.6%

Vitamins and minerals 49.8 62.1 76.2 22.7% 23.0%

Others 56.5 63.6 69.3 9.0% 20.9%

Total 258.4 292.3 331 13.2% 100%

Vitamins and Minerals had the greatest share of the market, followed by analgesics and cold remedies

From July 2016, 216 OTCpharmaceutical products (from atotal of 1.582), will be availablefrom supermarkets (exceptpharmacies)• 87% of OTC will be available

only from pharmacies• 13% of OTC will be available

and from other sales pointsStrict criteria in order to ensurethat the easy access won’t bedetrimental for the public health

Thank you

www.iobe.gr

vettas@iobe.gr

28