£5791 / $9259 / €7042
The pharmaceutical market of Central & Eastern Europe (CEE) is expected to reach US$104.2 billion at retail prices by 2016. The market is expected to expand by a moderate CAGR in US dollar terms, as the region’s economies recover from the global economic crisis.
Dominance of generic medicines
Generic medicines represent around half of the total CEE pharmaceutical market in value terms and almost three quarters in volume terms. Generics have retained their strong position in the region due to the demand for affordable drugs and the fact that some governments favour generics when selecting products for reimbursement, as they are usually cheaper than imported products and help to keep costs down. Although rising incomes have led to increased sales of branded products, recent financial difficulties are likely to have forced patients towards purchasing cheaper generics.
Central & Eastern Europe is home to a large number of generic companies, including Gedeon Richter, Krka, Polpharma and Zentiva, which have traditionally focused on the production of generics. Pharmstandard, Russia’s leading generic company, has a small number of original drugs in its portfolio, but many companies lack the funding that is required for extensive R&D. Branded generics are particularly common in CEE, especially in Russia, due to the tradition of self-medication, which has encouraged companies to produce pharmaceuticals with recognisable names and the erroneous belief that pure generics are unsafe.
Different IP protection levels
Much of the pharmaceutical legislation within the region has been harmonised with that of the EU. However, the level of IP protection remains an international concern. Problems that are commonly raised include a lack of transparency in IP procedures and the lack of effective enforcement.
11 KEY MARKETS COVERED
Highly detailed analysis providing comprehensive regularly updated reports for leading markets in the region:
Highlights from the report
Foreign investors have made a number of acquisitions in recent years. Gedeon Richter controls Polfa Grodzisk; GlaxoSmithKline controls Polfa Poznan; Nycomed, which acquired Altana Pharma in 2006, holds a majority share in Polfa Lyszkowice; Sanofi has acquired Nepentes; Sandoz operates via Lek Polska; Teva currently operates through Pliva Krakow and Teva Kutno; and Valeant, following the acquisitions of ICN Pharmaceuticals and Sanitas, is the majority shareholder of Polfa Rzeszˇw and Jelfa, respectively. The leading local producers are Adamed, which has bought a majority stake in Polfa Pabianice; Bioton, which specialises in biologic products; Polfa Tarchomin, which remains under state control; and Polpharma, which has acquired Polfa Warszawa.
The Romanian pharmaceutical market will rank fourth highest in Central & Eastern Europe in 2016. Romania’s market size is comparable to Hungary; in per capita terms, the market is similar to Bulgaria. The market is expected to expand by a considerably high CAGR over the 2011-2016 period. Imports represent a large proportion of the market. The expansion of the market is largely driven by import growth. The growth rate of the pharmaceutical market may be affected by slow economic recovery. Whilst the large population creates demand for pharmaceuticals, the low GDP per capita means that patients are unlikely to be able to afford the most expensive drugs and will settle for the cheaper alternatives.
Foreign companies increased their presence in the Russian pharmaceutical market in 2011. In September 2011, Russian Corporation of Nanotechnologies (Rusnano), Russia’s government investment company, entered into an agreement to provide funding for Cleveland BioLabs' new subsidiary, Panacela Labs, which will develop a portfolio of new preclinical drug candidates in Russia. In the same month, Pro Bono Bio (PBB) was launched as a new international pharmaceutical company that is the result of a three-year Anglo/Russian project, developed by Celtic Pharma Holdings. In June 2011, Pfizer and ChemRar High Technology Centre signed a memorandum of understanding (MoU) to explore a collaboration focused on the research, development and commercialisation of innovative drugs in Russia and other countries. In June 2011, Novartis announced the start of construction of a pharmaceutical manufacturing plant in St Petersburg. The facility is expected to be completed by 2014. In April 2011, AstraZeneca began construction of a new US$150 million manufacturing facility in the Kaluga region to supply Russia with innovative medicines that are locally-manufactured. The company also plans to establish a Predictive Science Centre in St Petersburg in 2012.
In per capita terms, Ukrainian pharmaceutical expenditure ranks the lowest in the CEE region, but growth is expected to be the strongest in the region over the next few years. The Ukraine pharmaceutical market is predicted to expand by a double-digit CAGR in US dollar terms. The market is driven by strong import growth; imports rose by a double-digit CAGR over 2006-2010. Import growth is expected to remain strong due to a lack of locally manufactured innovative products. The pharmaceutical market could also grow more rapidly if the government manages to implement an effective health insurance system.
THESE REPORTS ANALYSE THE ISSUES
The The Outlook for Pharmaceuticals in Central & Eastern Europe is a unique collection of management reports from Espicom Business Intelligence. 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, together with a comprehensive statistical appendix. There are over 60 markets covered in the worldwide series.
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