The Outlook for Pharmaceuticals in Central & Eastern Europe

11 Major Markets Covered!

Bulgaria, Hungary, Russia, Slovenia, Croatia, Poland, Serbia, Ukraine, Czech Republic, Romania and Slovakia.

Highlights from the report:

Russia, Poland, the Czech Republic, Hungary and Ukraine represent the five largest markets in the CEE region. Russia has the potential to become one of the worlds largest pharmaceutical markets, due to its population of around 142 million people, but demand remains very low, due to small levels of household disposable income and insufficient public healthcare funding. The dominance of generics is a reflection of the poor economic situation; generic drugs account for 90% of the market by volume. The largest markets are also among the fastest-growing in the region, although Romania and Slovakia are also performing well, assisted by their improving economies. The Baltic markets are exhibiting slower, yet respectable growth rates.

Poland has one of the largest populations in Europe and therefore boasts a significant market of US$5.4 billion in 2007. Poland has a well established pharmaceutical industry and manufacturers tend to specialise in the production of generic drugs. Generics have a higher chance of entering the market as they are given priority over patented drugs in bioequivalence tests and are usually placed on the reimbursement list, making them a popular prescription choice. Much of the Polish pharmaceutical industry has now been privatised; many companies have been taken over by foreign investors such as GlaxoSmithKline and IVAX (now Teva).

The Czech Republic was one of the larger and richer former Soviet bloc countries to join the EU in May 2004. The market is valued at US$3 billion in 2007 and its per capita expenditure of US$298 is the second highest in the region. Generics are widely used in the Czech Republic but their share of the market is slowly being eroded by the constant growth of imported patented drugs. As with other recent EU entrants, the Czech Republic is forbidden by the accession treaty to parallel export low-priced branded drugs to the high-price EU markets such as Germany or the UK, if the drug in question has a patent in the target market.

Despite its modest population of around 10 million, Hungary is a significant central European market. Per capita expenditure on pharmaceuticals is the third highest in the region and annual growth is strong at 8.8%. Spending on drugs accounted for 31% of total government health expenditure in 2002. This high figure initially prompted the government to introduce price freezes and encourage companies to contribute a percentage of turnover to the Health Insurance Fund. The Pharma Economic Act, which came into force in January 2007, will compel pharmaceutical companies to relinquish a larger proportion of their profits to help cover overspending.

At US$1,430 million, the Romanian pharmaceutical market ranks as the sixth largest in the CEE region, although per capita expenditure only exceeds that of Russia and Ukraine. Romania joined the EU in January 2007 and has made much progress in adjusting its legislation.

Areas that require more attention include data exclusivity and bolar provision. The quality of drug production has risen however, since the enforcement of GMP on 1st January 2004, although the number of local drug producers fell as a result.

The Bulgarian pharmaceutical market is around ten times smaller than the Polish one, but possesses a high growth rate of 8.1%. This rate should be sustainable in view of the GMP enforcement of April 2002 and the subsequent improvements in domestic production, in terms of quality and capacity. Bulgaria became a member of the EU in January 2007 and is harmonising its legislation with EU directives.

According to the Association of Bulgarian Pharmaceutical Manufacturers, regulations controlling the production of drugs are EU-compliant. A lot of progress has also been made in the tightening of patent laws but the issue of effective IP enforcement, however, remains an issue.

FOR EVERY MARKET

• Current market size
• Unique 5-Year market projections to 2012
• Market outlook
• Comment & rating, covering 8 key areas such as use of generic drugs, intellectual property, pricing and the health systems
• Market structure
• Statistical data on imports and exports
• Market developments, covering recent and impending developments with respect to key issues such as regulation, health facilities, funding and government policy
• Key national data projections

FOR EVERY MARKET

• Population data, including growth trends and age structure
• Demographic indicators detailing principal causes of death and morbidity

• Organisation & administration
• Health expenditure
• - Expenditure by source of funding and type
• Hospital services
• - Hospital data such as beds by type, region, specialty, patient admissions and surgical procedures
• Outpatient care
• Medical personnel
• - Data on healthcare professionals covering such areas as doctors by specialty, nursing staff and dentists

• Regulatory environment
• Distribution guide and trade fair information
• Domestic production

For healthcare organisations and trade associations