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Bulgaria Pharmaceuticals and Healthcare Report Q4 2011
Business Monitor International, Sep 2011, Pages: 104
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.
While certain aspects of Bulgaria's law on medicinal products in human medicine have negative implications for drugmakers operating in the country, we maintain our view that the pharmaceutical market looks set for high single-figure growth over the long term. The market's attractiveness is somewhat limited by its size and low per-capita expenditure, but BMI believes elevated growth rates, including demand for innovative medicines, makes the country an appealing target for multinational drugmakers.
Headline Expenditure Projections
- Pharmaceuticals: BGN1.88bn (US$1.32bn) in 2010 to BGN2.03bn (US$1.37bn) in 2011; +8.0% in local currency terms and +3.7% in US dollar terms. Forecast unchanged from Q311.
- Healthcare: BGN4.56bn (US$3.22bn) in 2010 to BGN4.77bn (US$3.23bn) in 2011; +4.5% in local currency terms and +0.3% in US dollar terms. Historic data revised, forecast up marginally from Q311.
- Medical devices: BGN257mn (US$181mn) in 2010 to BGN269mn (US$183mn) in 2011; +4.9% in local currency terms and +0.7% in US dollar terms. 2010 growth revised, 2011 forecast lowered from Q311.
Business Environment Rating: Bulgaria’s Pharmaceutical and Healthcare Business Environment Ratings (BERs) remains stable in our latest analysis. Its score is relatively unchanged at 50.3 in Q411, down from 50.4 in Q311, due to a minimal revision to the Country Risk subcomponent score. Although in BMI’s BER ranking matrix, Bulgaria has recovered somewhat and is now ranked 13th, up from its previous position of 14th, as a result of a downward revision to Serbia.
Key Trends & Developments
- On July 29 2011, Bulgaria introduced amendments to the Law of Medicinal Products in Human Medicine through Decree Number 186, published in the official gazette. The measure was adopted on the second reading. Broadly speaking, the industry and its representatives have been critical of reforms, exacerbated by the lack of consultation, either with representatives of the industry or the public.
- Among other reforms in the legislation, the Bulgarian parliament decided to freeze the prices of fully or partially reimbursed medicines until the end of 2012. This measure applies to all pharmaceuticals on the positive reimbursement list. The price freeze has been broadly welcomed by pharmacists and patient groups. However, pharmacists have called on the National Health Insurance Fund (NHIF) to define the reimbursement level, which has been criticised as it varies too often and by too much.
- In June 2011, it emerged that Bulgaria's NHIF would sign a new deal with pharmaceutical companies to negotiate discounts on drugs covered by the insurance fund. The discounts will only be available on drugs that are 100% insured by the NHIF. The contract, which has yet to be made publicly available, will detail the amount of the discount and the new value of the medicines.
Economic View: Bulgaria's economic recovery will continue to be primarily export-led, driving economic expansion to our forecast of 2.7% this year. As such, revised data released by the statistics institute that shows Q111 real GDP grew 3.4% over Q110, with exports increasing by 56.2% year-onyear (y-o-y) over the same period, is supportive of our forecast. We forecast domestic demand staging only a moderate recovery in line with the improving economic situation facing the consumer.
Political View: We maintain our view that Bulgaria's Citizens for European Development of Bulgaria (GERB) party will maintain strong popular support in 2011 and may receive a slight boost from recent anti-Islamist incidents involving the National Union Attack Party. Moreover, our expectation of a sustained economic recovery and improvement in the labour market will further bolster popular support for GERB.
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