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Bulgaria Pharmaceuticals and Healthcare Report Q1 2010
Business Monitor International, Nov 2009, Pages: 92
Bulgaria Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Bulgaria's pharmaceuticals and healthcare industry.
The value of Bulgaria’s pharmaceutical market in 2008 was BGN1.704bn (US$1.19bn), and it is forecast to grow by 10.5% in local currency terms in 2009 as the pharmaceutical sector holds up well during recessions. According to the Sofia News Agency, Bulgaria’s National Statistical Institute data indicate that domestic trade in the country reduced by 19.1% year-on-year (y-o-y) in August 2009, though trade of pharmaceuticals and medical products registered the smallest decline of just 1.9% y-o-y. Still, the authors have slightly downgraded our projections. Over the five-year period to 2014, this report forecasts the market to grow at a CAGR of 7.77% in local currency terms. A return to economic expansion should help support spending, although pressure on public finances could impact the market. Using our new 10-year forecast model, this report projects that the pharmaceutical market will be worth BGN3.25bn (US$1.69bn) in 2019, representing a CAGR of 5.5% in local currency terms for the 2014-2019 period.
In October 2009, Bulgarian Health Minister Bozhidar Nanev announced that funding for health will be reduced in 2010, as widely expected. The total health budget for 2010 will be 10% lower than it was for 2009. However, Nanev has stressed that were Bulgaria’s financial situation to stabilise there would be a chance that health spending could be increased. In order to cut costs, the government is planning to shut a number of hospitals. There are currently 400 hospitals in the country, which together have debts of around BGN330mn (US$249.7mn). Meanwhile, the government is planning to raise extra funds for the healthcare system through an increase in excise for both alcohol and cigarettes, which will raise an estimated BGN60mn (US$45.43mn) and BGN130mn (US$98.4mn) respectively.
The authors believe that the newly elected centre-right party Citizens for European Development of Bulgaria (GERB)’s budgetary assumptions are more realistic than its predecessors (the Bulgarian Socialist Party ([BSP]), which will improve the ability of the new administration to prevent the fiscal deficit spiralling out of control. The authors view positively the ability of the new GERB government to get to grips with the public finances, especially following the appointment of former World Bank economist Simeon Djankov as finance minister. However we are also unsurprised that the government has been forced to cut healthcare funding, especially considering the recent implementation of a positive list for pharmaceuticals which would allow greater access to expensive new drugs.
In the Business Environment Ratings matrix, Bulgaria has improved its score in Q1 2010 and now ranks equal 9th out of the 20 regional markets surveyed in Central and Eastern Europe (CEE). However, Bulgaria’s score for the pharmaceutical sector remains at the regional average. This is because of the relatively limited size of the market due to the population size, as well as limited potential for high value products due to low per-capita consumption in comparison to other markets in the region.
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