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Lithuania Pharmaceuticals and Healthcare Report Q2 2010
Business Monitor International, April 2010, Pages: 69
The Lithuania 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 Lithuania's pharmaceuticals and healthcare industry.
The fallout of a disastrous 2009 for the Lithuanian economy has and will continue to filter through to the pharmaceutical and healthcare industry, a scenario which has been as heavily felt in only a handful of other countries. Reflecting this, Lithuania has fallen to 17th position in BMI’s Q210 Pharmaceuticals and Healthcare Business Environment Ratings for Emerging Europe, with only smaller Commonwealth of Independent States (CIS) markets deemed less attractive to multinational companies.
The prime consideration for this low score is the dynamics of pharmaceutical sales. We calculate that total pharmaceutical sales fell by close to 10% in US dollar terms in 2009, which combined with Lithuania’s already-low total spending does not bode well for drugmakers. A return to low single-digit growth is projected over the medium term, but when balanced with worsening market access opportunities for multinationals seem, limited at best over the coming years.
Modifications to Lithuania’s pricing and reimbursement systems are set to place considerable pricing pressure on companies. Prices of non-reimbursed prescription and over-the-counter (OTC) medicines in Lithuania could decrease by 10-15% following alterations to the country’s pricing methodology to be introduced on April 1 2010.
Under the new regulations, non-reimbursed products will be subject to similar price controls as those subsidised by the state. Reference pricing will be implemented, with 14 EU states used to determine prescription products and six for OTC medicines. Manufacturers will then be required to declare centrally imported prices (CIPs). Digressive maximum wholesale and retail mark-ups will also be introduced, in line with those for reimbursed medicines. Worryingly for drugmakers, the legislation states that prices must not exceed those declared by parallel importers, which the analyst believes could place considerable pressures on prices.
Meanwhile, a Government of the Republic of Lithuania Decree has introduced two mechanisms through which it aims to reduce state expenditure on medicines: the use of therapeutics reference pricing; and the addition of Bulgaria and Romania to its reference pricing scheme. The analyst believes these changes will most heavily affect manufacturers of originator and high-priced branded generics (including originator products).
The report forecasts for the industry reflect the previously-anticipated introduction of price controls to the market. From 2009-2014 we project pharmaceutical sales to increase at a compound annual growth rate (CAGR) of just 2.7%.
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