Romania Pharmaceuticals and Healthcare Report

In BMI's Business Environment Ratings for Q409, Romania has moved up two places on the rankings table to reach fourth position among the 20 Central and Eastern European (CEE) key markets surveyed as a part of BMI's Pharmaceuticals & Healthcare Business Environment Rankings. Romania's current position reflects the robust nature of the country's pharmaceutical industry and the strong growth it has made in recent months. We envisage that sales of pharmaceutical products are set to increase over the next five years, with sales of prescription drugs and over-the-counter (OTC) medications expected to grow from US$3bn to US$5.46bn, thus representing a compound annual growth rate (CAGR) of 12.74%.

Recent data suggests that the Romanian pharmaceutical market has shown strong resilience to the economic downturn in 2009. Data released by market research firm IMS Health shows that pharmaceutical sales grew 20% year-on-year (y-o-y) to reach RON3.5bn (US$1.2bn) in the first five months of 2009, reinforcing data released by the Cegedim Consultancy Group which measured Q109 growth at 22.5% y-o-y. BMI believes that full-year growth rates will be less impressive, although we project that outside the Commonwealth of Independent States (CIS) countries, Romania should be the fastest-growing market in local currency terms during 2009.

In other developments, some of Romania's leading private healthcare providers have announced plans to invest EUR80mn (US$113mn) over the next three years in an attempt to expand their networks in the country. These include healthcare providers such as the Unirea Medical Centre, Romar Medical and MedLife.

Latest figures suggest that the market for medical equipment in Romania could reach a value of more than EUR200mn (US$282mn) by 2012, up 50% from the EUR139mn (US$196mn) estimated for 2009.

Growth in this area will be supported by the private sector, which has gained considerable momentum in recent years, as well as by the public sector, where efforts towards de-centralisation, (expected to begin next year), will open the pathway for tenders being made for hospital equipment. Firms most likely to compete in the medical equipment market that supplies big hospitals are leading US manufacturer GE Healthcare (currently with 40% of the total market), the German conglomerate Siemens, also with 40% of market share, and leading Dutch multinational Philips, with the remaining market share of 20%.

Meanwhile, GSK Europharm announced that it will produce a drug used to treat HIV-AIDS in Brasov, north-west of Bucharest by the end of the year. The drug will be scheduled for export as of the first quarter of 2011 after the conclusion of all registration procedures. The medicine is the second product to have its production transferred from other GSK manufacturing plants to the facilities based in Romania.