Serbia’s pharmaceutical and medical-products sector recorded €925.1 million in exports in 2025, but imports of approximately €2.58 billion resulted in a €1.65 billion trade deficit, according to the Chamber of Commerce and Industry of Serbia (PKS). Exports covered just 35.9% of imports, highlighting the challenge of increasing domestic production and value added.
Investment continues, with Germany’s STADA approving an additional €20 million to expand manufacturing capacity at Hemofarm’s Vršac complex. The key question is whether new investment will increase output alone or also bring more advanced production and technical capabilities to Serbia.
Pharmaceutical Manufacturing and Export Growth
The wider export category includes pharmaceutical preparations, medical and dental instruments, electromedical equipment, and perfumes and toilet preparations. Basic pharmaceutical products and preparations accounted for 66.3% of exports. The narrower pharmaceutical manufacturing sector generated approximately €613 million in exports, up around 39%, while imports approached €1.9 billion. Across the broader product category, exports grew 30.2%, compared with 16% growth in imports.
The trade deficit does not automatically indicate that all imported products could be manufactured competitively in Serbia. Investment decisions need to account for production costs, customer demand, regulatory requirements and the domestic value retained after imported materials and services are paid for.
Hemofarm Investment and Galenika’s Expansion
STADA invested more than €50 million in Hemofarm during 2025, including machinery, equipment, registrations and licences. Its cumulative investment since acquiring the Serbian manufacturer in 2006 approached €530 million.
The additional €20 million Vršac investment is intended to expand capacity. STADA has identified Germany as the largest market for products manufactured in Serbia, with Serbian production supplying EU and other international markets.
Galenika, part of Brazil’s NC Group, has pursued regional expansion through the acquisition of 100% of Slovenia’s Sanofarm. The transaction strengthened its presence in Slovenia and Croatia and secured distribution rights for selected Italian manufacturers’ products. However, distribution expansion does not necessarily increase manufacturing in Serbia.
Imported Ingredients and Advanced Medicines
Serbia’s pharmaceutical production remains concentrated on generic medicines and relies on imported active pharmaceutical ingredients (APIs), particularly from China and India. PKS estimates that approximately 80% of pharmaceutical investment goes towards machinery and equipment.
Developing domestic ingredient production could strengthen supply security, but individual projects must demonstrate commercially viable costs, sufficient demand and appropriate technology. Opportunities may be more realistic in selected ingredients, specialised formulations, testing services and manufacturing stages where investors already have relevant expertise and customers.
Moving into advanced medicines also requires additional capabilities. STADA’s specialty pharmaceuticals segment, including biosimilars and innovative medicines, generated more than €1 billion in group-wide revenue in 2025, growing 17%. These figures are not specific to Serbian operations.
Biosimilars require extensive comparability studies addressing quality, safety and efficacy. Any Serbian project would need to establish access to technology, development expertise, regulatory approvals and commercial rights.
Regulatory Approval and Financing Risks
Manufacturers supplying medicines to the EU must comply with European Medicines Agency (EMA) requirements, including EU good manufacturing practice standards. Manufacturing authorisations, inspections and product-specific approvals can affect when a facility begins generating revenue. Lenders therefore need to assess more than construction costs and installed capacity. Product approvals, customer commitments, working capital, production ramp-up and potential regulatory delays all affect project viability.
For Serbia, the investment priority is to increase domestic production value, skilled employment, technical capabilities and supply reliability. Local engineering, laboratory services and equipment maintenance can also contribute value, provided procurement plans demonstrate that these activities will take place domestically. Reducing imports alone is not sufficient. Sustainable progress depends on manufacturing projects that can compete commercially, serve domestic and international markets, and generate earnings within Serbia.
