Hungary Pharmaceuticals and Healthcare Report Q1 2013
Business Monitor International, January 2013, Pages: 95
BMI View:
Our outlook for Hungary's pharmaceutical market remains negative, given the government's policies that shift the burden of the National Healthcare Fund (OEP) on to drug manufacturers. Pricing pressure and claw-back taxes have squeezed domestic manufacturers' margins and introduced insecurity to an already difficult economic environment, and we continue to expect a contraction in the size of the Hungarian pharmaceutical market in 2012 and 2013. Consequently, Hungarian drugmakers will have to become even more export-orientated. That said, a favourable tax regime for research and development should attract foreign investment, though these multinationals will focus most of their sales efforts on external markets, supporting our view that Hungary's status as a net exporter of pharmaceutical products will increase.
Headline Expenditure Projections:
- Pharmaceuticals: HUF691.61bn (US$3.44bn) in 2011 to HUF608.22bn (US$2.71bn) in 2012;
-12.1% in local currency terms and -21.2% in US dollar terms. Forecast down from Q412 due to cost-containment measures.
- Healthcare: HUF2,013bn (US$10.01bn) in 2011 to HUF2,003bn (US$8.92bn) in 2012; -0.5
%in local currency terms and -10.8% in US dollar terms. Forecast in line with Q412.
- Medical Devices: HUF117.09bn (US$582mn) in 2011 to HUF117.95bn (US$526mn) in 2012;
+0.7% in local currency terms and -9.7% in US dollar terms. Forecast in line with Q412.
Risk/Reward Rating: In our Risk/Rewards Rating (RRR) matrix for Q113, Hungary's composite score again stands at 53.1 out of the maximum 100 points, ranking the country 8th out of 20 markets surveyed in the emerging Europe region. We also retain our pessimistic outlook for its pharmaceutical market rewards, on account of government's cost-containment policies.
Key Trends & Developments
- In July 2012, the Pharmapolis Pharmaceutical Scientific Park was established in Debrecen,
following an investment of HUF 6bn (US$26.9mn). Of the total figure, HUF 3bn was allocated by the EU under the New Szechenyi Plan framework. The Park involves collaboration between Hungarian Gedeon Richter, the Chamber of Commerce and Industry of the county of Hajdu-
Bihar and the Debrecen city, which owns a 25% stake in the Park. The project features a 10,500 square metre modern research base that will act as a research and development as well as an innovation centre. The new project will create 120 new jobs for researchers.
- In September 2012, the Hungarian Chamber of Pharmacists (MGYK) published the list of medicines; the prices of which will be reduced due to the biannual price competition between drug manufacturers in the region. The producer prices of 485 different drugs included by the MGYK in the list will experience a cut of between 65.01% and 0.02%. The tentative drug list,
effective from October 1 2012, contains results only of the first round of the competition on August 21 2012. Companies that have been dropped out of the list of drugs available with reimbursement in Hungary in the first round can submit their request to MGYK to allow inclusion of their drugs with lower prices.
- In October 2012, Israeli generic drugmaker Teva Pharmaceutical Industries established a new sterile medicines plant in Gödöll?, Hungary. The company will invest US$110mn in the new facility, which will produce 160-200mn units of injectables when operating at full capacity. The plant, which will supply medicines to patients in more than 70 countries in North America,
Europe and Asia, is to mainly manufacture cytotoxics that are used in oncology therapeutics.
BMI Economic View: Continued deterioration in economic activity in the eurozone, and the failure of the government to thus far reach an external financing arrangement with the IMF/ EU continue to weigh on all areas of the economy. As it stands, net exports will provide some degree of support to headline growth this year given how weak import demand has been. However, risks to our medium-term growth forecasts lie firmly to the downside.
BMI Political View: The government's recent resistance to IMF conditions notwithstanding, we still expect Hungary to reach some form of external financing arrangement with the IMF and EU, most likely at some point in Q113. As it stands, we expect the domestic population to remain most concerned with the harsh economic situation at home, and as a result, we do not anticipate an improvement in the ruling Fidesz party's public support anytime soon. We see a lot of potential for extremist parties such as the farright Jobbik to benefit from an increasingly disillusioned electorate.
Executive Summary 5
SWOT Analysis 7
Hungary Pharmaceuticals And Healthcare Industry SWOT 7
Hungary Political SWOT 8
Hungary Economic SWOT 8
Hungary Business Environment SWOT 9
Pharmaceuticals Risk/Reward Ratings 10
Table: Central And Eastern Europe Pharmaceutical Risk/Reward Ratings, Q113 10
Rewards 11
Hungary - Market Summary 13
Regulatory Regime 14
Table: Marketing Authorisation Fees, 2011 14
Pharmaceutical Advertising 15
Intellectual Property Regime 16
Pricing Regime 18
Pharmaceutical Mark-ups 20
Table: Hungary - Pharmaceutical Price Build-Up (%) 21
Reimbursement Regime 21
Pricing and Reimbursement Amendments In 2011 and 2012 23
Table: Additional Savings Outlined in Szell Kalman 2 Plan Incorporating All Public Expenditure 24
Industry Developments 26
Epidemiology 26
Table: Leading Causes of Death, 2009 26
Communicable Disease 28
Healthcare System 29
Healthcare Funding 30
Table: Health Insurance Fund Expenditure by Type, 2004-2009 (HUF mn) 31
Public Pharmaceutical Expenditure 31
Medical Tourism 32
Research and Development 32
Clinical Trials 34
Medical Devices 35
Industry Forecast Scenario 37
Overall Market Forecast 37
Table: Pharmaceutical Sales Indicators, 2008-2016 39
Healthcare Market Forecast 40
Table: Healthcare Expenditure Indicators, 2008-2016 41
Table: Healthcare Governmental Indicators, 2008-2016 42
Table: Healthcare Private Indicators, 2008-2016 42
Key Growth Factors - Macroeconomic 43
Table: Hungary Long-Term Macroeconomic Forecasts 44
Prescription Drug Market Forecast 45
Table: Prescription Drug Sales Indicators, 2008-2016 46
Patented Drug Market Forecast 47
Table: Patented Drug Market Indicators, 2008-2016 48
Generic Drug Market Forecast 49
Table: Generic Drug Sales Indicators, 2008-2016 50
OTC Medicine Market Forecast 51
Table: OTC Medicine Sales Indicators, 2008-2016 52
Table: OTC Medicine Sales Sub-Indicators, 2005-2010 53
Pharmaceutical Trade Forecast 54
Table: Exports and Imports Indicators, 2008-2016 55
Medical Device Market Forecast 56
Table: Medical Devices Sales Indicators, 2008-2016 57
Other Healthcare Data Forecasts 58
Key Risks to BMI's Forecast Scenario 58
Competitive Landscape 59
Pharmaceutical Industry 59
Table: Members of MAGYOSZ, 2011 60
Table: Members of AIPM, 2011 60
Domestic Players 61
Table: Hungarian Pharmaceutical Production, 1990-2008 (HUF billions) 61
Foreign Players 62
Recent Company Activities 62
Pharmaceutical Wholesale 63
Pharmaceutical Retail 64
Table: Pharmacies, 2000-2010 64
Company Monitor 66
Domestic Manufacturers 66
Gedeon Richter 66
Egis Pharmaceuticals (Servier) 70
Foreign Manufacturers 73
Pfizer 73
Novartis 75
Sanofi 76
GlaxoSmithKline 78
Merck & Co 80
Eli Lilly 81
Teva 83
Country Snapshot: Hungary Demographic Data 85
Table: Hungary - Population By Age Group, 1990-2020 86
Table: Hungary -Population By Age Group, 1990-2020 87
Table: Hungary - Key Population Ratios, 1990-2020 88
Table: Hungary - Rural and Urban Population, 1990-2020 88
Glossary 89
BMI Methodology 91
How we Generate our Pharmaceutical Industry Forecasts 91
Risk/Reward Ratings Methodology 92
Ratings Overview 92
Table: Pharmaceutical Business Environment Indicators 93
Weighting 94
Table: Weighting Of Components 94
Company Monitor
Domestic Manufacturers
Gedeon Richter
Egis Pharmaceuticals (Servier)
Foreign Manufacturers
Pfizer
Novartis
Sanofi
GlaxoSmithKline
Merck & Co
Eli Lilly
Teva
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