life expectancy in Greece (2017)
estimated expenditure on healthcare (2018)
privately run diagnostic centres in Greece (2019)
2019 government projections for incoming investments in the pharma space
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The sea and the sun. This age-old formula has served Greece’s hospitality sector well for decades. Now, it’s helping boost another industry: private healthcare.
Τhe country’s mild climate and year-round sunny conditions are providing the right mix for patients recovering from medical treatments in Greece.
Post-treatment stays among foreign patients in Greece are very common in an industry drawing tens of thousands of foreigners per year, according to estimates.
Along with its weather conditions, Greece offers a wealth of highly qualified medical staff and relatively low-priced medical services. This bodes well for European citizens, who often face long queues in their own public health services and very high private health care costs.
Greece’s booming start-up scene has also entered the business.
Innovative ideas are helping the sector extend beyond national boundaries and develop health services for a global market, while low labour costs are drawing high-tech investments looking for a home.
Vassilis Kontozamanis, Deputy Minister for Health, says greater private-public sector cooperation and a digital transformation of Greece’s health sector will result in a more efficient and effective healthcare system, bolstering access to new markets such as medical tourism and silver-economy healthcare services.
Worth $10 billion, global health tourism is booming, and Greece is starting to claim a piece of the action. Its slice consists of two parts: those who visit a country for medical reasons – whether it be essential or elective – and those who visit a country for wellness, such as seeking treatment at a beauty spa or wellness resort.
Healthcare group Bioiatriki has been doing a lot of business in the first category, offering specialist medical services ranging from anaesthesiology through to vascular surgery.
In 2013, the company set up CrossBorderMedCare, a service catering to international patients. Since then, Bioiatriki has created a network of more than 700 doctors to meet the needs of its global clientele.
“The health and wellness tourism market is significant and rapidly growing,” says Vice President and CEO of Bioiatriki George Spanos. He expects private healthcare spending to rise by an average of 6% between 2018-2022.
Health tourism to Greece encompasses several areas with dialysis centres, rehabilitation, thalassotherapy, cosmetic surgery, and IVF being some of the most popular.
IVF clinics in particular are becoming increasingly popular thanks to their competitive pricing, high-quality services, and favourable legislation.
Operating within the framework of EU guidelines offers patients extra peace of mind compared with regional destinations falling outside of the EU framework.
Bioiatriki invests heavily to better serve international patients and expand abroad, says Vice President and CEO George Spanos.
Greece currently has over 40 licensed assisted reproduction units, spanning private hospitals, medical centres, and private practices. An IVF cycle can start from as little as €3,000 in Greece – an estimated fifth of what it costs in the U.S. according to Dr Kostas Pantos, Scientific Director and Founder of Genesis Athens Clinic – and the process moves at a faster pace than elsewhere, allowing patients to pursue treatment without significant time commitments away from their home countries.
Greece’s private healthcare business is growing in importance for the recovering economy, drawing significant amounts of capital and creating jobs.
In recent years, the country’s private healthcare sector has been characterised by two major deals.
In 2017, CVC Capital Partners entered the market aiming to consolidate it through Hellenic Healthcare Group, which currently owns five hospitals in Athens (Metropolitan Hospital, Metropolitan General, Hygeia Hospital, Mitera, and Leto). The deals give CVC a market share of more than 35%.
Another significant agreement materialised when Oaktree Capital submitted an offer for the acquisition of Iaso Group in 2019 – a €180 million deal currently in progress.
“All healthcare sector areas are deemed attractive and allow for growth opportunities. However, private hospitals provide the critical mass and the market for foreign investors to enter the Greek market, also supported by the recent activity in the sector,” says Thanassis Panopoulos, a partner and deals leader at PwC Greece.
More merger and buyout activity is on the horizon, some officials say. But this time around it could focus on primary healthcare – the first contact a person has with the healthcare system when a problem arises.
Bioiatriki’s Spanos points out that there has been significant consolidation in the secondary
healthcare sector, where there are now fewer opportunities for further consolidation in the future.
“On the other hand, there are significant opportunities for consolidation in the primary healthcare segment, as there are about 300 large diagnostic centres and close to 3,000 small independent microbiologists and labs, some of which lack in the quality of services offered,” he adds.
Although Greece’s economy – and the purchasing power of households – is on the up, there are still risks to the healthcare sector.
Any downward moves in the economy may adversely impact the spending power of Greek patients, ultimately affecting the operating performance of hospital providers.
Meanwhile, the government is keen to pave the way for further investments in Greece’s healthcare system. A ministerial decision is expected in early 2020, on the so-called ‘clawback system’, which offsets the cash that pharmaceutical industries have to return to the Greek state with investments made in research and development plus clinical studies.
Development and Investments Minister Adonis Georgiadis said that the aim of this measure was for drug industries to be further incentivised to invest in Greece.
The move is part of a number of measures set out by the Greek state and showcased in Prime Minister Kyriakos Mitsotakis’ speech at the Thessaloniki International Fair, soon after he took the country’s helm.
Speaking at the event, he said: “New investments worth €460 million will be made by 17 pharmaceutical companies in the rest of Greece. Investment plans are already in the hands of the Ministries of Finance and Development.”
He added that these moves concern both R&D investment and the modernisation of production facilities, as well as the upgrading of processes leading to the development and production of innovative products.
Greece offers some unique advantages over other countries in terms of medical services, with IVF treatments in Greece costing just one fifth of what they would in the United States, says Dr Kostas Pantos, Scientific Director and Founder, Genesis Athens Clinic.
In the broader arena of health, encompassing pharmaceutical companies, life sciences, medical trials, and cosmetics, there have been some impressive results.
The poster child for innovation and global expansion in Greece is cosmetics firm Korres.
Pharmacist Giorgos Korres, who founded the company in 1996, says that 2018 marked a particularly successful year for the group and included an investment agreement with Morgan Stanley and Profex – a Shanghai-based cosmetics distribution company. “This strategic agreement equals growth and global expansion into dynamic markets of great size and prospects. Having onboard a strong global financial partner such as Morgan Stanley and a strong operational partner in China – Profex – is quite a rare combination to achieve,” he says.
In pharmaceuticals, there have also been some significant moves, such as Pharmathen hooking up with private equity firm BC partners.
Data from the Hellenic Association of Pharmaceutical Companies (SFEE) shows that the industry is Greece’s fourth largest exporter, and that the impact from the industry reaches €7.5 billion every year. This works out to €2.9 being created in the Greek economy for each euro of value added by pharmaceutical companies.
The sector, which directly employs 13,500 people, is set to play a growing role in the economy. Greece ranks among the EU’s biggest private sector spenders on pharmaceutical expenses, data shows.
Estimates show that the industry in Greece is expected to contribute an additional €2 billion to the economy by 2021, creating an additional 25,000 job positions.
During Greece’s crisis, the country’s start-up scene experienced a boom which made its way to biotech – that’s technology based on biology aimed at improving people’s lives, often by combatting debilitating and rare diseases.
These start-ups are increasingly attracting attention on a global stage, such as Vivante Health, a health monitoring start-up based in Texas and Athens, and which is currently being watched with great interest by pharmaceutical giant Johnson and Johnson.
Another promising start-up is Purposeful, a Greek venture that was launched in September 2018. Almost immediately, the company attracted the attention of Metavallon VC, a venture capital firm founded and run by two female partners – which in itself represents a first for Greece.
Headed by George Drakakis, Purposeful focuses on looking for compounds in existing pharmaceuticals and matching them for treatment in other conditions, their target being rare diseases. Drakakis explains that the results of this computational drug repurposing are validated through their external partnerships or labs.
He notes that Greece’s strongest cards to play in terms of biotech are the highly skilled and dedicated workforce armed with ideas and the relatively low costs of labour.
“It’s a low-cost investment compared to elsewhere, and you have a plethora of options plus interdisciplinary ventures and ideas,” says Drakakis.
Accessing the capital needed, however, is key in propelling ideas forward as lending in Greece remains tight.
“Greece has lots of creative people with ideas that need investment to move them forward. Such investments would also be very lucrative for the investor because there are a lot of people with ideas that are waiting to take off, but they haven’t been given the opportunity yet,” he says.
Despite the tight fiscal policy Greece has implemented in recent years, the country has managed to up the money invested in research and development (R&D) in relation to the pharmaceutical and healthcare business.
According to government officials, Greece has increased the amount of money allocated
to R&D to nearly 1.2% of GDP (or more than €2 billion) versus 0.8% of GDP (€1.45 billion) in 2015.
Among those benefitting from state funding is the Demokritos research centre – the largest multidisciplinary research centre in Greece, with a wide-ranging approach covering research, biotech, development, AI, and more. Its projects are also funded by EU grants, together with private industry.
Demokritos is also associated with the Hellenic Biocluster, the first biosciences cluster in Greece bringing together the innovation leaders in pharmaceuticals, biotechnology, diagnostics, medical devices, and specialist services. The centre is home to the Lefkippos technological park, which hosts about 40 companies.
“These are very innovation-driven companies, some start-ups, and some more established,” says George Nounesis, Director of
Demokritos. The Lefkippos park also houses the R&D departments of larger companies such as Tesla.
Several highly promising biotech innovations are being fostered at
Demokritos. One example is a company called Nanoplasmas, a spin-off that specialises in plasma etching. The company is already developing products for the detection of bacteria and other compounds.
Mixing health research with AI also holds enormous promise for Greece.
“One of the most interesting things we are looking at is the interface of AI with health. This involves bioinformatics, big data analysis, machine learning, diagnostics, imaging, genetic sequencing and the interpretation of genetic results, and the association of these applications with possible targets. For Greece, I think this AI interface with medical research and health holds incredible promise and great opportunities,” adds Nounesis.
With Greece’s private healthcare sector increasingly appealing to both investors and patients from around the world, the sector looks well positioned to gain from the country’s improving economic fortunes.
Pascal Apostolides, General Manager of AbbVie, says that further development of the clinical trials landscape in Greece, especially regarding the legislation for approval timelines, will help the company expand its footprint in the coming years.
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