Profitable and gainful for private businesses

Profitable and gainful for private businesses

Photo: LETA

Health care services, in brief:

  • although the medical system of Latvia is officially free of charge, out-of-pocket payments by patients amount to 40% of  total revenue;
  • in 2011, the state will finance health care in the amount of 692 million EUR;
  • health insurance is  voluntary service, and it is mainly available only to corporate customers;
  • the largest health care enterprise is Pauls Stradins Clinical University Hospital, which is owned by the state ( turnover in 2009 – 81.5 million EUR);
  • in 2009, the turnover of pharmaceutical industry in Latvia was 278.4 million EUR;
  • there are two major manufacturers of pharmaceuticals in LatviaGrindeks and Olainfarm (the turnover in 2010 – 92.6 million EUR and 35 millions EUR respectively).

The health care system in Latvia is currently experiencing significant difficulties. However, private business in this industry, as well as in pharmaceuticals, is profitable and gainful.

The medical system of Latvia is officially free-of-charge; however, the out-of-pocket payments from patients form a significant part (approx. 40% of all financing of the health care system) of the revenues of private, municipal, as well as state hospitals and clinics.

Although the state health care budget of Latvia as a part of GDP is one of the lowest in the EU, the total turnover of the health care industry is significantly higher. In the EU, the average financing of health care by the state, amounts to 6,6% of GDP.
In Latvia, however, this is the proportion of GDP reached by both state and private health care spending. The total annual percentage of the health care industry  of Latvian GDP is 6–7%. In 2010, this has amounted to about 1.2 billion EUR. The state budget spending amounted to approximately half of this figure.

The state owns three clinical university hospitals, which also provide the most complicated and expensive health care services and procedures not available elsewhere. In 2009, the turnover of the largest of these hospitals – Pauls Stradins Clinical University Hospital – amounted to 81.5 million EUR.

The state health care system is based on a network of family doctors. The state covers the expenses for consultation by the family doctor and the specialists, and the patient only needs to pay 1,4–2,8 EUR. However, in order to receive the necessary service, it is often necessary to wait in line, which sometimes last for weeks. For this reason, patients often choose to pay the significantly higher prices for private services.

In 2009, an average of 5,3% of a household budget in Latvia was spent on health care services and pharmaceuticals. This figure is higher than in previous years, when an average of 3,7–4,9% of family budgets was spent for  this purpose.

Private  health care business

The proportion of private health insurance in the financing of Latvian health care is 2–5% of the total financing of the sector.

Private clinics also perform the state-funded health care services, competing with public hospitals for state funds.

The private institutions mainly work in such area, as dentistry and gynecology; diversified out-patient care clinics work in Riga (the capital), as well as in some of the major cities in Latvia.

There are only a few private hospitals in Latvia. The largest of them is the Latvian Maritime Medicine Center, whose shares are quoted on the NASDAQ OMX stock exchange.

The pharmaceutical market

In 2009, the turnover of pharmaceutical business in Latvia amounted to 278,4 million EUR. Approximately one fifth of this turnover was over-the-counter medications, while 79% of the turnover was prescription  pharmaceuticals.

Vertical integration is typical for the pharmacy branch in Latvia.
For instance, Recipe Plus – the largest state wholesale dealer of pharmaceuticals in Latvia, with a turnover of 106 million EUR in 2010 – has formed a joint holding company with Sentor Farm, the largest retail pharmacy network.

The entry of new enterprises to the retail pharmaceutical business is complicated because the market is strictly regulated. In the major cities, the number of pharmacies has reached legally permitted limits. Approximately half of the more than 800 pharmacies in Latvia belong to five pharmacy chains: Sentor Farm, Hansa Pharma, A Aptiekas, Euroaptieka, and Ilmas aptieka.

There are two  large manufacturers of pharmaceuticals in Latvia - Grindeks and Olainfarm. The shares of both companies are quoted on  the stock exchange. These companies mainly sell their products on export markets. The proportion of pharmaceuticals, which are produced in Latvia, amounts to 6% of the total pharmaceutical market.

The financing of health branch from the state budget (in millions EUR)

Profitable and gainful for private businesses

Source: The Ministry of Health

Medicine market turnover, by manufacturer, in 2009 (in millions EUR)

GlaxoSmithKline

18,4

Pfizer

14,9

Roche

14,5

Les Laboratoires Servier

11,5

Sanofi-Aventis

11,2

Berlin-Chemie/Menarini Group

10,0

Astra Zaneca

9,5

Source: State Agency of Medicines

 Useful links:

Share

Comments

=

* Please fill in the amount verbally!

"Latvijas Tālrunis" Ltd. invites Internet users - readers of the portal, to comply with moral, ethical and decency standards, while writing comments on published articles and news, not to incite violence, hatred or discrimination, not to spread information that is offensive to person's dignity and honor, not to hide behind the name of another person, not to do advertising without editorial consent. In the event that the comment author fails to comply with the above rules, their comment may be deleted and "Latvijas Tālrunis" Ltd. has the right to inform the supervisory authorities of possible violations of the law.

Exhibitions

Christmas Days

Consumer Goods Exhibition
30.11 - 19.12.2018

Midwest Clinic

Int'l Band and Orchestra Conference and Exposition
19.12 - 22.12.2018

Ladya

Exhibition and Fair for Russian Arts and Crafts
19.12 - 23.12.2018

CMEH

China (Beijing) Int'l Medical Devices Exhibition
26.12 - 28.12.2018

New Year's Fair

Amateur sport competitions, audio-video game competition, ice skating ground, an amusement park, films, sales
14.12 - 30.12.2018

Global information partners

Estonian bussines support organizations

Kaliningrad's bussines support organizations