Life Sciences State of Play in Greece
The life sciences industry in Greece is considered one of the most crucial sectors for the economy, with significant economic output, contribution to employment, and gross added value to other industries.
VK PREMIUM has supported several Pharma, Biotech, Manufacturing & Tourism investments through investment incentive schemes. Some indicative projects include:
- €474M for a luxury sustainable tourism resort
- €32 mil. cash grant for a biotechnology R&D Joint Venture
- €25M cash grant for a pharmaceutical production and packaging facility
- €25M cash grant for a Greek paper mill company
- €16M cash grant for an innovative metal construction plant
- €12M tax relief for an ophthalmic products production facility
A Robust Investment Framework
Tendency towards Tax rationalization – recently Greece has decreased corporate income tax (from 24% to 22%), while social security contribu- tions were reduced by 3% (expected to further decrease).
Recent legislation has transformed the labor market, by adding flexibility, expanding allowed overtime, and governing teleworking (introduction of digital card) amongst others.
A series of incentives and mechanisms have been introduced in the past few years, in order to elevate the attractiveness of Greece as an investing destination, in respect to both the general economy (i.e. Development Law, Strategic Investments) as well as the specific industry (i.e. Clawback reduction, R&D Tax Superdeduction, Patent Box).
- Generous and competitive investment incentive schemes and funding programs
- Word of mouth – emblematic investments, like Pfizer’s recent CDI in Thessaloniki, put Greece at the centre of investment developments in disruptive innovation and R&D
- A well-established pharma industry consisting of strong domestic and international players
- An emerging hub for drug discovery and the development of personalized treatment plans through integrating computational biology and data analytics
- A significant increase in R&D spending as a % of GDP during the last 4 years
- A rapidly growing healthcare ecosystem driven by HBio, an experienced stakeholder, that connects businesses with academia and research
- A steady increase in the number of clinical trials, patent applications and grants during the last 7 years
- Increased penetration in both sales and productions of generics, allowing for enhanced profitability and increased sales
Key Trends / Opportunities
Focusing on pharmaceuticals, there are significant opportunities to invest in the following areas:
- Increased penetration in both sales and productions for generics, allowing for enhanced profitability and increased sales (both domestic and exports).
- Formulation of alliances in production, leveraging local manufacturing infrastructure and capabilities for outsourcing.
- Investing in R&D, either in pre-clinical research or clinical trials and data centers.
- Such investments are appealing due to the availability of highly specialized personnel and the maturing infrastructure of Greece.
Enhanced Generics Penetration
Low penetration of generics in the Greek market compared with EU benchmark, especially given the significantly increased price (+38% vs EU), indicates the potential for enhanced profitability for the industry, for both domestic sales, as well as increased exports.
Pharmaceutical Manufacturing
Pharmaceutical Manufacturing output has been steadily increasing, growing at a CAGR of 17.2% in order to support the increased domestic sales and exports.
In contrast, the number of the workforce in pharmaceutical manufacturing has been increasing with a slower rate (9.2%), indicating enhanced efficiency in production.
Finally, the increased % of workers with tertiary education (compared to other manufacturing activities) is testament to the high caliber workforce active in the industry.
Promoting Joint Ventures in Production
Currently, 13% of the consumed pharmaceutical products are manufactured locally, outsourced by international firms. Given the high contribution of imported products, combined with the future plan of domestic and international players to scale up production (more than 10 new production facilities have been announced), international firms could leverage domestic excess capacity to boost.
Opportunities in R&D
Given the efficient research output, supported by quality scientific and medical talent, as well as a maturing medical infrastructure and a vibrant innovation ecosystem, there are significant opportunities for R&D Investments.
Despite significant increase in recent years, R&D expenditure remains below EU benchmarks. However, the total number of new patent applications and grants is increasing at a faster rate, compared to the expenditure, indicating an efficient research output. At the same time, there is a notable increase of the conduct of clinical trials (key focus in Stage II & III) within the Greek healthcare system.
Recent initiatives and regulatory reforms have been further facilitating the case for investing in R&D. Greece is heavily promoting digitalization initiatives across the healthcare system (to be funded by the Greek RRP), further enhancing the potential for clinical trials. Furthermore, the country has set as a strategic priority the aim of becoming a regional hub for data storage and collocation, sparkling a strong investment cross-industry momentum with major domestic and international companies (incl. pharmaceutical) investing heavily in data centers and research hubs.
Finally, recent EU regulatory developments are focusing on harmonizing clinical trial regulations across EU countries and governance of secondary health data usage (European Health Data Space) with key objectives to streamline processes across countries, enabling cross-country collaboration, and further foster innovation.
The key segments of interest in Greece refer to the pharmaceutical and medical devices markets.
Pharmaceutical Sales
Testifying the dynamism of the industry, pharmaceutical sales have been steadily growing with a CAGR of 4.6%, reaching ~ € 7 b in 2020.
Medical Devices Sales
With the local industry operating in small scale, the country relies in imports (Trade balance deficit at € 590 m for 2018 according to 2020 MedTech Europe).
Greek Unique Benefits – Key Considerations
The RRP as the Economy’s Accelerator
Through the Recovery and Resilience Fund (RRF) of European Commission, Greece has secured a significant amount of funding to implement the proposed investment reforms from the National RRP (‘Greece 2.0’) in selected sectors. The Greek RRP is constituted by ~€ 17.8 b in the form of grants, to be invested in upgrading public infrastructure and reforming the Greek economy, and by ~€ 12.5 b in the form of loans, to be invested in the private sector.
Overall, the Greek RRP is expected to enhance the Greek GDP by 7% by 2026, create 180,000 new jobs and increase private investments by 20%.
Nevertheless, the market overall is growing by a CAGR of 8.8%, driven primarily by increased Orthopedics & Prosthetics and Other Segments penetration.
Focusing on the Healthcare & Life Sciences Sector (Component 3.3 – Improve resilience, accessibility and sustainability of healthcare, Pillar: Employment, Skills and Social Cohesion: Health, Education, Social Protection)., the industry will benefit by a total grant budget of ~€ 1.5 b.
A Highly Skilled & Cost-efficient Workforce
Greece is scoring overall in 16th place (out of 132 countries) in the Human Capital & Research dimension of the Global Innovation Index for 2021, backed by the almost universal enrollment of the population in tertiary education, high % of graduates from science and engineering fields (~23% – ranking in 21st position), which is eventually translated in a high number of researchers per capita (ranking in 34th position). More specifically, there were approximately ~120k enrollments for BSc, ~41k for MSc, and ~20k for PhD in 2019 (Source: Hellenic Statistics Authority), in relevant to life sciences operations field (varying from medical and scientific areas to engineering, computer science and business studies).
Furthermore, Greece is offering competitive labor rates compared with EU peers, as a result of the adverse effects of the 2010 debt crisis. Specifically, the minimum monthly wage in Greece is at € 831.8, which is 17% less than EU average (€ 1,002.6). At the same time, the difference between the average wage in Greece and in EU is demonstrating a constant upward trend. Forecasts indicate a similar future trend that is expected to slow down due to the late effect of unemployment reduction.
Contact us
* Required fields
