Poland Pharmaceuticals and Healthcare Report Q2 2009

Top line data for pharmaceutical sales in Poland suggest that the market holds significant potential for drugmakers. Healthy levels of growth, coupled with an already substantial market size, saw per capita spending rise to US$215 in 2008. Through to 2013, sales of pharmaceuticals, which include prescription drugs and over-the-counter medicines, will increase from US$8.2bn, to US$10.9bn, representing a compound annual growth rate (CAGR) of 5.9%. This rate remains higher than the majority of Western European countries.

Despite market expansion, negative market risks are a major drawback for innovative firms and a key reason for the country's fourth place in the rankings among the 20 countries in BMI's Pharmaceutical Business Environment Rankings for Central and Eastern Europe (CEE) in Q209. The regulatory environment is characterised by long delays for reimbursement approval and a heavily pro-generic and pro-domestic regime. In addition, high levels of patient co-payments mean that more expensive products are out of many patients' reach.

Recent developments have provided for some positive progress, however. In late 2008, the Ministry of Health took an encouraging step towards improving access to patented treatments, with the release of a new reimbursement list. While the list consisted mainly of generic drugs, a number of new molecules and orphan products were also included. Changes to the list are estimated to add around EUR200mn a year to government pharmaceutical expenditure. Meanwhile, in early 2009, the drawn-out process of updating regulations took a step forward. By harmonising drug documentation, the Ministry of Health reduced the number of authorised drugs on the market by over 2,500.

While there has been some improvements in patient access to modern and effective treatments, pharmaceutical marketing has become significantly more restricted in 2009. Under new regulations, doctors may only meet representatives at specified times outside working hours. In addition, doctors must seek approval from the head of the clinic or hospital where they work. In addition negotiations between company representatives and government officials must also now be recorded, as the state seeks to increase transparency.

The operating environment is likely to remain challenging for pharmaceutical companies over the medium-term, however upsides exist for foreign drugmakers. Generics companies will see significant benefit from market growth and state policies. In recognition of this, US-based Mylan has announced it will add another 30 products to its portfolio in 2009. Meanwhile, in an effort to maximise returns, as many as seven pharmaceutical companies are following AstraZeneca's lead in considering direct-topharmacy (DTP) distribution in Poland.