The countries of Central and Eastern Europe

The countries of Central and Eastern Europe represent a total market of 285 million people and a combined GDP of US$3.0 trillion in 2008

The impact of EU accession on the pharmaceutical market
In May 2004, five of the CEE markets in question joined the European Union. Much of the pharmaceutical legislation within the region has therefore been harmonised with that of the EU, although countries such as Poland are still in the process of transposing EU directives into national law.

Romania and Bulgaria have also amended the relevant legislation and became full EU members in January 2007. The implementation of GMP is also taking place across most of the region and this will inevitably improve the quality of overall production and lead to a rise in market values.

Variations in the quality of IP protection
The level of IP protection offered by the CEE nations varies across the region, but the issue generally remains an international concern. Problems that are commonly raised include a lack of transparency in IP procedures and the lack of effective enforcement. Some countries, such as Bulgaria, have made a lot of progress in improving the legal climate by strengthening patent laws and extending the standard patent term to 20 years.

The dominance of the generics market
The demand for affordable drugs is the principal factor in the dominance of the generics in the region. Despite recent improvements in patent protection, legislation and effective enforcement are still needed in many countries where counterfeiting of Western drugs continues. Generics production has managed to remain strong in countries that are also home to the producers of branded drugs. In the former Czechoslovakia for example, the merger of Leciva with Slovakofarma enhanced generics production in 2003. However, as economies develop the trend to importing higher value branded products can be seen.

These reports analyse the issues which matter
That is why Espicom Business Intelligence has published these new management reports The Outlook for Pharmaceuticals in Central & Eastern Europe to 2013. Each report provides individual and highly-detailed analysis of each market, looking at the key regulatory, political, economic and corporate developments in the wider context of market structure, service and access. The reports are available individually, or as a discounted collection, and prices include 4 completely updated reports sent quarterly, plus a comprehensive report sent annually. There are over 60 markets covered in the worldwide series.

Executive Summary


11 Major Markets Covered!
Bulgaria Hungary Russia Slovenia
Croatia Poland Serbia Ukraine
Czech Republic Romania Slovakia

Highlights from the report
THE REGION
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 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 Serbia are also performing well. Other markets of the former Yugoslavia are exhibiting slower, yet respectable growth rates.

POLAND
Poland has one of the largest populations in Europe and therefore boasts a significant market of US$6.4 billion in 2008. 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).

CZECH REPUBLIC
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$3.7 billion in 2008 and its per capita expenditure of US$358 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.

HUNGARY
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 8.9%. Spending on drugs accounts for 28% of total health expenditure in 2008. The drugs budget has run at a deficit for years. This 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, compels pharmaceutical companies to relinquish a larger proportion of their profits to help cover overspending. So far, the new legislation has proved successful in reducing the deficit.

ROMANIA
At US$2,124 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.

The quality of drug production has risen since the enforcement of GMP on 1st January 2004, although the number of local drug producers fell as a result. Much of the region has been privatised; generics companies such as Actavis and Ranbaxy have recently acquired local companies.

BULGARIA
The Bulgarian pharmaceutical market is around ten times smaller than the Polish one, but possesses a high growth rate of 9.0%. 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 has harmonised its legislation with EU directives.

Improvements have also been made in other areas such as IPR enforcement and legislation; the United States Trade Representative removed Bulgaria from its Special 301 Watch List in 2007 as a result of this. However, the pricing and reimbursement of pharmaceuticals remains an issue. The US industry association, PhRMA, believes that the procedures used to determine the price and reimbursement status of a drug are non-transparent and cumbersome. It notes that arbitrary classification of newer drugs, which are more effective and have fewer side effects, make it more difficult for manufacturers to recover their research and development costs. ..... FOR EVERY MARKET,
SENT QUARTERLY

MARKET OUTLOOK
Current market size
Unique 5-Year market projections to 2013
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,
SENT ANNUALLY

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

HEALTHCARE SYSTEM
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

ACCESSING THE PHARMA MARKET
Regulatory environment
Distribution guide and trade fair information
Domestic production

CONTACT DETAILS
For healthcare organisations and trade associations