Slovak Republic

1. HEALTHCARE SEGMENT BUSINESS & INVESTMENT OPPORTUNITIESSlovak Republic (Slovakia)presented byJiri Trapl&Lucia Maskova Commercial ServiceBratislava, Slovak Republic

2. Slovak Republic Located in the heart of Europe Population: 5,439 Mil. Area: 49,035 sq.km Counties: 8 GDP per cap.: $16,041 Average Monthly Wage: $730 Unemployment Rate: 14.5% Inflation rate: 2.3% *June 2007 data Main Industries Industrial production (automotive), metallurgy,electrical engineering, Healthcare (services and equipment)

3. Healthcare in the SR • High quality healthcare suffering from financial debt (mostly state owned); additional investment required. • Mandatory insurance (10% employer, 4% employee) • Aging population - Life Expectancy: Males – 70.3 years; Females – 77.8 years • The most common causes of death: circulatory diseases & cancer • The number of sick days is increasing, while the number of people (37 days in 2006) on sick leave is decreasing

4. Healthcare Market System Issues Healthcare reform steps cancellation – e.g. cancellation of the 20SK (USD 0.78) payment for clients visiting the doctor Lower prices for drugs (decrease by 4.4%) Lower VAT for drugs and specific medical devices (from 19% to 10%) Increased state payment for state insured people (first four months of 2007) Lack of money in the system – debt in 2006 USD 267mil Late paymentand reimbursements - especially in the pharmaceutical sector where, suppliers very often have to operate without being paid for extended periods of time.

5. Healthcare market Bottlenecks • Hospital transformation and restructuring - reducing the number of ineffective state owned hospitals and turning them into social care facilities • Definition of minimal healthcare network (Slovakia has over 6 000 excess beds) • Catalogue of healthcare services • Terminology standardization to improve payment mechanisms • Protocols for diagnostics and illness treatments • Risk compensation policy among insurance companies • Drug policy • eHealth project – IT in healthcare • Simplifying annual accounting • Low salaries (average salary in healthcare sector is USD 628, which is less than the national economy average) • Lack of general practitioners and nurses (outflow to Austria and other EU countries) • Non-existing long term R&D strategy

6. Healthcare MarketThreats Health insurance nationalization - creation of one state controlled medical insurance company State health insurance centralization – every state employee must be insured with a state-run health insurance company Prohibition of profits earned by private medical insurance companies

7. Healthcare Market Opportunities Operational Program “HEALTHCARE” 2007 - 2013 (worth USD 333 mil) focused on three areas: • Healthcare modernization - investment into infrastructure,complex info systems for healthcare providers connected to regional and national health info systems, improving health care services, modernization of tech.infrastructure inevitable for medical / healthcare education. • Health support and health risk prevention - strengthening the ability of an individual to cooperate in developing and improving his/her health • Technical support

8. Medical Equipment Market • Competitive but price sensitive market with a good potential for innovative and state of art technologies • Hospitals: almost 140 in the country, mostly under jurisdiction of regions, only two are privately owned. Number to be reduced by 25-30. • All products must be registered in the Slovak Republic by Slovak Institute for Drug Control. Source: OECD, 2005

9. Medical Equipment Best Prospects I Instruments and appliances used in medical, surgical, dental or veterinary sciences, including scientigraphic apparatus, other electro-medical apparatus, and sight-testing instruments. Orthopedic appliances, including crutches, surgical belts and trusses; splints and other fracture appliances; artificial parts of the body; hearing aids and other appliances which are worn or carried or implanted in the body to compensate for a defect or disability. Instruments and apparatus for physical or chemical analysis (for example, polari-meters, refractometers, spectrometers, gas or smoke analysis apparatus); instruments and apparatus for measuring or checking viscosity, porosity, expansion, surface tension or the like; instruments and apparatus for measuring or checking quantities of heat, sound or light (including exposure meters); microtomes

10. Medical EquipmentBest Prospects II • Oscilloscopes, spectrum analyzers and other instruments and apparatus for measuring or checking electrical quantities, excluding meters of heading HS 9028; instruments and apparatus for measuring or detecting alpha, beta, gamma, and X radiation, as well as cosmic or other ionizing radiations • Apparatus based on the use of X-rays or of alpha, beta or gamma radiation, whether or not for medical, surgical, dental or veterinary uses, including radiography or radiotherapy apparatus, X-ray tubes and other X-ray generators, high tension generators, control panels and desks, screens, examination or treatment tables, chairs and the like • Instruments and apparatus for measuring or checking the flow, level, pressure or other variables of liquids or gases (for example, flow meters, level gauges, manometers, heat meters), excluding instruments and apparatus of headings HS 9014, 9015, 9028 or 9032

11. Drugs & Pharmaceuticals • Consumption of pharmaceutical products in Slovakia is low compared to the EU average (only about a third. Drug expense is 1/3 expense in the HCS) • 9 U.S. pharmaceutical companies are present in Slovakia (30% market share) • Strong position of generic drugs in the market (50%) • Highly competitive market: more than 200 distributors that supply pharmacies and hospitals. • The vast majority of pharmacies is privately held.

12. Dental Segment Dental sector in Slovakia is small and competitive (mostly Swiss and German companies) but offers good potential for new and innovative products as well as advanced educational programs and seminars for professionals. • The insurance system covers all standard services (basic filling, basic endodontic treatment, etc.) but patients must completely pay for all the other procedures (cosmetic fillings, implants, non-basic treatments) • In 2007, there were 3,266 registered dentists. 82% of dentists work in private practice.

13. Laboratory equipment • The Slovak laboratory equipment market is relatively small and most of the companies in the laboratory sector are small and medium-sized companies. • The Slovak medical equipment market is extremely competitive. The European Union holds around half of the market for imported products. Slovakia has harmonized its device legislation with that of the EU, driven by EU membership. Renewed economic growth and political direction should make the Slovak market an increasingly attractive one in the next few years.

14. Biotechnology market • Slovak research & development is lacking capital and support, although there are more than 35,000 graduates each year from Slovak universities. • Legislative changes regarding the financing of R&D will create an attractive environment for international companies that want to invest in Slovakia. • Slovakia presents a huge potential base of operations for major biotech players, since currently there is very little activity in the market .

15. Thank you Jiri Trapl & Lucia Maskova Commercial Service US Commercial Service, US Embassy Panska 14, 814 99 Bratislava, Slovakia Phone: +421 2 5920 5317, -15, Fax: +421 2 5920 5333 E-mail: Jiri.Trapl@mail.doc.gov, Lucia.Maskova@mail.doc.gov www.buyusa.gov/slovakia