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Bulgaria Pharmaceuticals and Healthcare Report Q1 2012
Business Monitor International, Dec 2011, Pages: 103
Business Monitor International's 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.
BMI View: Out-of-pocket spending will continue to be the main driver behind the growth of Bulgaria’s pharmaceutical market, though this feature also makes the market highly vulnerable to the wider economic situation. In terms of absolute values, government funding for healthcare is expected to improve marginally, although its relative contribution to the overall healthcare spending in the country will continue to decline, partly due to the difficulties regarding the collection of insurance contributions.
Headline Expenditure Projections
- Pharmaceuticals: BGN1.88bn (US$1.27bn) in 2010 to BGN2.04bn (US$1.49bn) in 2011; +9.0% in local currency terms and +17.4% in US dollar terms. Local currency forecast slightly up from Q411 due to analyst intervention.
- Healthcare: BGN4.56bn (US$3.09bn) in 2010 to BGN4.74bn (US$3.46bn) in 2011; +4.0% in local currency terms and +12.1% in US dollar terms. Local currency forecast down marginally from Q411 due to macroeconomic factors
- Medical devices: BGN268mn (US$181mn) in 2010 to BGN281mn (US$205mn) in 2011; +4.9% in local currency terms and +13.0% in US dollar terms. Local currency forecast unchanged from Q411.
Business Environment Rating: Despite its composite score being 1% lower on a quarter-on-quarter (qo- q) basis, Bulgaria remains 13th in BMI's latest Pharmaceutical and Healthcare Business Environment Ratings (BERs) for emerging Europe. The lower composite score is due to a slight downgrade in its rewards component, which is still well below the regional average. Bulgaria also has relatively pronounced risks, scoring 56 out of 100 for this category, although it is on par with the regional average.
Key Trends And Developments
- In October 2011, the Commission on the Protection of Competition (CPC) fined Adipharm BGN51,130 (US$36,170) for imitating German company Bayer’s aspirin product. Adipharm’s activities were found to be in violation of Article 35, paragraph 1, of the law on the protection of competition. While the value of the fine administered is quite small, the CPC’s decision is an encouraging sign of the level of consumer and trademark protection in Bulgaria and should act as a warning to other companies in the region that may try and promote their own products by imitating more well-known brands.
- According to amendments to the Law on Medicinal Products in Human Use effective since August 5 2011, Bulgarian drug manufacturers are not required to seek approval to advertise their products. However, permission will be needed in cases where it is addressed to medical professionals. The law stipulates that the contents of the advertisement must be registered with the Bulgarian Drug Agency (BDA).
BMI Economic View: BMI expects Bulgaria’s economic growth to be weighed down by slowing aggregate demand in the eurozone and persistent concern over the eurozone debt crisis. It believes the slowdown in external demand will weigh on Bulgarian exports, which when combined with only moderate growth in household spending will feed through to lower real GDP growth in 2012. BMI also expects a modest increase in fiscal expenditure for 2012, which will weigh on the growth of healthcare expenditure. About 55% of total healthcare spending is financed by the state (up from 53.9% in 2008), though the figure is expected to decrease. The risk remains for an expansion of government spending if growth slows more precipitously than BMI forecasts.
BMI Political View: Politically, it expects 2012 to be a difficult year for the governing Citizens for European Development of Bulgaria (GERB) party. A combination of high public dissatisfaction with the government’s apparent lack of progress in the fight against corruption and the failure to enter the Schengen visa-free travel zone, combined with a weaker economic growth outlook, will likely pose challenges to the government. That said, with the opposition unorganised and weak, BMI does not expect the government to lose its mandate in 2012.
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