Romania Pharmaceuticals and Healthcare Report Q1 2013
Business Monitor International, January 2013, Pages: 93
BMI View:
While it is clear that drugmakers operating in Romania are far from happy with the latest revisions to the pharmaceutical claw-back tax, and the tax remains unfairly punitive, all things considered, the August 2012 amendments are a small improvement, though definitely not what producers would have wanted ideally. With part of the objective of the claw-back tax to improve the timeliness of payments for reimbursed medicines, which has been a major difficulty for drug producers and distributors over the last four years, there are some upsides to this mechanism working effectively. The tax remains most punitive for generic drugmakers with lower-value medicines and could lead to these cheaper medicines exiting the market. The tax continues to weigh on BMI's assessment of Romania's Pharmaceutical and Healthcare Risk/Reward ratings.
Headline Expenditure Projections:
- Pharmaceuticals: RON12.76bn (US$4.18bn) in 2011 to RON13.52bn (US$3.78bn) in 2012;
+6.0% in local currency terms and -9.7% in US dollar terms. Local currency forecast slightly down from Q412 on account of macroeconomic factors; US dollar forecast further impacted by exchange rate factors.
- Healthcare: RON30.17bn (US$9.90bn) in 2011 to RON32.07bn (US$9.86bn) in 2012; +6.3
%in local currency terms and -9.5% in US dollar terms. Local currency forecast slightly down from Q412 on account of macroeconomic factors; US dollar forecast further impacted by exchange rate factors.
- Medical devices: RON1.61bn (US$527mn) in 2011 to RON1.69bn (US$471mn) in 2012;
+5.0% in local currency terms and -10.6% in US dollar terms. Local currency forecast slightly down from Q412 on account of macroeconomic factors; US dollar forecast further impacted by exchange rate factors.
Risk/Reward Rating:
Our Risk/Reward rating score for Romania's pharmaceutical market remains unchanged in Q113, at 55.3 out of the maximum 100 points. Despite operational improvements in recent years, Romania remains a challenging market, largely on account of low per capita incomes and spending on medicines, while the US dollar forecast for its pharmaceutical market continues to be negatively impacted by leu weakness. Regionally, Romania is again ranked sixth out of the 20 key markets surveyed in the Emerging Europe region.
Key Trends And Developments
- An estimated EUR85mn (US$110mn) is expected to be collected by the Romanian health ministry through the claw-back tax in 2012, supplementing the EUR33mn (US$43mn) recently allocated to the ministry by the government. The tax revenue, which will be transferred to the single health insurance fund, will be spent on hospitals, with priority given to regional network and emergency hospitals. Newly-launched drugs and medical supplies supervision programmes in Romania will reportedly also be allocated EUR880,000 (US$1.14mn).
- In October 2012, it was revealed that medicines and sanitary materials for emergency care units will be procured centrally in Romania from 2013, according to statements made by the interim health minister Raed Arafat. The government is to issue tenders for all medicines and sanitary materials that are used in the 63 state-funded emergency care centres in the country. The tenders will help to control cost in emergency care, thereby reducing healthcare expenditure. The public health departments and health units have also been asked by Arafat to spend all available funds so that none remains at the end of the year.
- A new proposal related to patient co-payment rules in Romania stipulates that patients with a compulsory health insurance policy might pay less in patient co-payments, reported PMR in September 2012. The proposal suggests RON2-RON4 (US$0.57-1.15) patient co-payment tariffs for a consultation, subject to the professional qualifications of the doctor. The proposal also recommends RON10-30 (US$2.87-8.63) patient tariffs for one day in hospital and RON20-40
(US$5.75-11.51) for an extended hospital stay.
- Around 88.5% of Romanians prefer innovative drugs for the treatment of serious illnesses,
Business Review reported in October 2012, citing a survey conducted by the IMAS Marketing
& Sondaje Institute. Almost 80% of respondents feel that it is imperative to buy innovative drugs; however, only 19.5% were able to distinguish between generic drugs and original drugs.
Of the total 1,036 Romanians surveyed, 45% stated that they wanted access to innovative drugs and 17% preferred generic drugs.
BMI Economic View:
Romanian consumer price inflation ticked up significantly in September, rising to 5.3
%year-on-year (y-o-y) from just 3.5% the previous month. While this puts the inflation rate well above the central bank's target range (2.5% +/- 1 percentage point), we do not anticipate monetary policymakers to hike rates anytime soon, as price pressures appear to be mainly supply-side driven. Nevertheless, while we agree with Central Bank Governor Mugur Isarescu that the price spike is transitory, we are revising up our end-2012 inflation forecast, from 3.3% to 4.3%, to reflect the impact of higher food prices.
BMI Political View:
According to recent polls released by GSS 2000, Romania's governing Social-Liberal Union (USL) coalition would win 51.2% of the vote in an election held now, with the opposition centre-right coalition gaining just 23.4%. This supports our long-held view that Prime Minister Victor Ponta is set to remain in power following the December 2012 election, which we expect to prompt ongoing tensions between the Romanian government and European Union (EU)/International Monetary Fund (IMF), as his anti-austerity rhetoric raises questions over his administration's commitment to fiscal consolidation.
Executive Summary 5
SWOT Analysis 7
Romania Pharmaceuticals And Healthcare Industry SWOT 7
Romania Political SWOT 8
Romania Economic SWOT 8
Romania Business Environment SWOT 8
Pharmaceutical Risk/Reward Ratings 9
Table: Emerging Europe Pharmaceutical Risk/Reward Ratings, Q113 9
Rewards 10
Risks 10
Romania - Market Summary 12
Regulatory Regime 13
Table: NMA Authorisation Activity, 2007-2008 13
Pharmaceutical Advertising 14
Intellectual Property Regime 14
Corruption 17
Pricing Regime 17
Reimbursement Regime 18
Co-Payments for Medical Services 19
Public Sector Procurement 20
Claw-Back Tax 21
Latest Claw-Back Tax Developments 22
Industry Developments 24
Epidemiology 24
Communicable Diseases 25
Healthcare System 25
Private Healthcare Provision 26
Private Healthcare Provision Developments 27
Healthcare Reform 28
Pharmaceutical Payment Delays 31
Research and Development (R&D) 31
Clinical Trials 32
Medical Devices 32
Industry Forecast Scenario 34
Pharmaceutical Market Forecast 34
Table: Romania Pharmaceutical Sales, Historical Data and Forecasts 35
Healthcare Market Forecast 37
Table: Romania Healthcare Expenditure Trends, Historical Data and Forecasts 38
Table: Romania Government Healthcare Expenditure Trends, Historical Data and Forecasts 39
Table: Romania Private Healthcare Expenditure Trends, Historical Data and Forecasts 39
Key Growth Factors - Macroeconomic 40
Prescription Drug Market Forecast 41
Table: Romania Prescription Drug Market Indicators, Historical Data and Forecasts 42
Patented Drug Market Forecast 43
Table: Romania Patented Drug Market Indicators, Historical Data and Forecasts 44
Generic Drug Market Forecast 45
Table: Romania Generics Drug Market Indicators, Historical Data and Forecasts 46
OTC Medicine Market Forecast 47
Table: OTC Medicine Sales By Subsector, 2007-2010 48
Table: Romania Over-The-Counter (OTC) Medicine Market Indicators, Historical Data and Forecasts 49
Pharmaceutical Trade Forecast 50
Table: Romania Pharmaceutical Trade Data And Forecasts (US$mn) 52
Table: Romania Pharmaceutical Trade Data And Forecasts (RONmn) 52
Medical Device Market Forecast 53
Table: Romania Medical Device Market Indicators, Historical Data and Forecasts 54
Other Healthcare Data 55
Key Risks To BMI's Forecast Scenario 56
Competitive Landscape 57
Pharmaceutical Industry 57
Domestic Pharmaceutical Sector 57
Foreign Pharmaceutical Sector 58
Table: Members of ARPIM, 2011 58
Pharmaceutical Company Developments 59
Pharmaceutical Wholesaling 60
Pharmaceutical Retail 62
Table: Pharmacies & Pharmaceutical Storehouses, 2000-2006 (000s) 62
Company Profiles 63
Local Companies 63
Zentiva Romania 63
Actavis Romania (Sindan) 65
Terapia Ranbaxy 67
Antibiotice Ia?i 69
LaborMed Pharma 73
Multinational Companies 75
GlaxoSmithKline (Europharm) 75
Roche 77
Sanofi 78
Novartis 79
Pfizer 80
Krka 81
Merck & Co 82
Demographic Outlook 83
Table: Romania's Population By Age Group, 1990-2020 ('000) 84
Table: Romania's Population By Age Group, 1990-2020 (% of total) 85
Table: Romania's Key Population Ratios, 1990-2020 86
Glossary 87
BMI Methodology 89
How We Generate Our Pharmaceutical Industry Forecasts 89
Pharmaceutical Risk/Reward Ratings Methodology 90
Ratings Overview 90
Table: Pharmaceutical Business Environment Indicators 91
Weighting 92
Table: Weighting Of Components 92
Sources 92
Company Profiles
Local Companies
Zentiva Romania
Actavis Romania (Sindan)
Terapia Ranbaxy
Antibiotice Ia?i
LaborMed Pharma
Multinational Companies
GlaxoSmithKline (Europharm)
Roche
Sanofi
Novartis
Pfizer
Krka
Merck & Co
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