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Georgia: An emerging and promising healthcare market!

It is evi­dent that gaining access to any country’s health­care market requires aware­ness of its cul­tural, finan­cial and eco­nomic fac­tors as well as fac­ing the local polit­i­cal changes and laws. For every tar­geted coun­try in the CIS region, these factors are always very specific.

With its charm­ing cap­i­tal, Tbil­isi, a robust wine culture (it was the birth­place of the beverage!), the Black Sea and the Cau­ca­sus moun­tains, Georgia is a unique country—and it’s also a main gate­way for land trans­porta­tion from Europe to Turkey and Cen­tral Asia, making it an attrac­tive hub for doing busi­ness in the region. More­over, the Geor­gian mar­ket, with its attractive tax and customs regulations, rep­re­sents one of the world’s most lib­eral free economic zones. That’s why the country was ranked twelfth of 175 coun­tries in the World Bank’s 2011 Ease of Doing Busi­ness report. All these fac­tors have attracted the atten­tion of for­eign investors.

In order to get an accurate picture of the Geor­gian health­care mar­ket, the fol­low­ing indi­ca­tors should be con­sid­ered:

  • Sta­tis­ti­cal data to ana­lyse mar­ket growth
  • Potential competitors
  • Reg­u­la­tory arrange­ments

The Georgian health­care mar­ket is very promis­ing due to low per capita drugstore expen­di­tures, ris­ing incomes and strong pro­jected growth for the GDP. The cur­rent size of the Geor­gian market is US $350 million, with a growth rate of 24%.

In Georgia, we expect to see more and more smaller, local sales and mar­ket­ing com­pa­nies that will perform new OTC and Rx launches within the country’s rel­a­tively lax reg­u­la­tory envi­ron­ment. The OTC and Rx split is 40% to 60%, and the out-of-pocket sec­tor of the Geor­gian health­care mar­ket accounts for between 25% and 30% of the market.

The local man­u­fac­tur­er share is 14% in terms of value, and the other 86% belongs to west­ern com­pa­nies.

There are no doubts that the busi­ness envi­ron­ment in the phar­ma­ceu­ti­cal sec­tor in Geor­gia is very pos­i­tive, espe­cially for west­ern OTC and health­care companies. Georgian phar­ma­ceu­ti­cal reg­u­la­tions are much sim­pler and more open than those in both the West and in Rus­sia. What’s more, there are no strict price reg­u­la­tions or con­trols as there are in Russia, and all OTC and Rx prod­ucts are free from VAT or cus­toms taxes in Georgia.

Espe­cially for medium-sized OTC and health­care play­ers, easy market access makes the Geor­gian mar­ket a very attrac­tive tar­get coun­try.