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Hungary Pharmaceuticals and Healthcare Report Q1 2012
Business Monitor International, Nov 2011, Pages: 100
Business Monitor International's Hungary 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 Hungary's pharmaceuticals and healthcare industry.
BMI View: While BMI lowered its projections for Hungary's pharmaceutical market in response to the government's structural reform programme at the start of 2011, it continues to believe the reported magnitude of the cuts to drug subsidies will not be achievable. BMI's scepticism over the credibility of these reforms was reinforced in October 2011, when the government released its 2012 budget plan, which, while seemingly maintaining the longer term saving targets, included smaller than expected planned cuts to drug reimbursement expenditure in 2012 and yet again failed to underpin exactly how the cuts would be achieved.
Headline Expenditure Projections:
- Pharmaceuticals: HUF678bn (US$3.27bn) in 2010 to HUF696bn (US$3.74bn) in 2011; +2.6% in local currency terms and +14.3% in US dollar terms. Forecast moderately up in local currency terms, from Q411 due to stronger than expected H111 sales.
- Healthcare: HUF1,942bn (US$9.38bn) in 2010 to HUF1,994bn (US$10.73bn) in 2011; +2.7% in local currency terms and +14.4% in US dollar terms. Forecast broadly unchanged in local currency terms, from Q411.
- Medical devices: HUF112.23bn (US$542mn) in 2010 to HUF115.4bn (US$621mn) in 2011; +2.8% in local currency terms and +14.6% in US dollar terms. Forecast down moderately due to analyst modification.
Business Environment Rating
In Q112, Hungary remains well below its historically high rating but unchanged on the quarter at eighth place. Hungary's structural and budget reforms have emerged, which led to a reduction in BMI's projections and outlook earlier in 2011. Hungary's score of 56.1 is unchanged for the quarter and is 35th globally.
Key Trends & Developments
The level of savings to be achieved from the drug subsidy budget has been reduced in 2012, according to the latest reading of Hungary's budget plan. The original March 2011 Széll Kálmán plan included savings from the prescription drug subsidy system reaching HUF83bn (US$382mn) in 2012. The latest available data suggest this figure has been reduced to a slightly less ambitious HUF67bn (US$309mn).
In August 2011, it emerged that Gedeon Richter and Germany-based Stada have announced the signing of two separate licence and collaboration agreements regarding the development and marketing of two biosimilar products for the two monoclonal antibodies rituximab and trastuzumab, both used as cancer treatments.
In August, the International Court of Arbitration of the International Chamber of Commerce (ICC) has ordered Netherlands-based Genefar to pay US$40mn to Hungarian drugmaker Gedeon Richter as compensation for violating the takeover of Genefar's Polish pharmaceutical unit Polpharma. In November 2007, Richter revealed its merger with Polpharma through a share swap agreement. However, in July 2008, the takeover was cancelled as Genefar raised demands away from the original agreement declared by Richter shareholders.
BMI Economic View
Hungary's economy will display marked weakness over the coming quarters as all components of GDP by expenditure come under pressure on the back of a slowing global macroeconomic backdrop. In turn, owing to a fragile domestic economy, the current account is set to remain in surplus until 2013.
BMI Political View
According to the polling agency Median, support for the ruling Fidesz party has been weakening of late. In a poll carried in September, support for Prime Minister Viktor Orban's party fell to 31%, down from 35% in July. This decline has not, however, been accompanied by a concurrent increase in support for the opposition socialist MSZP party, which has similarly seen its popularity fall to 12% in September from 16% in July. Instead, the far-right Jobbik party has seen its support push back into double figures. Were elections held in September, Jobbik would receive 12% of the public vote, up from 9% in July and 8% in June.
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