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Overview of the Bulgarian and Romanian Pharmaceutical Markets
Decision Resources, Inc., June 2005, Pages: 11
In 2007, Bulgaria and Romania are scheduled to join 25 other countries as member states of the European Union (EU). Before doing so, however, Bulgaria and Romania must implement wide-ranging political, economic, and legal reforms, including modernization of their health care and pharmaceutical industries. Eight other Eastern and Central European nations underwent the same process before their accession to the EU in 2004, but both Bulgaria and Romania face their own specific challenges.
In this report, we provide an overview of the health care system, pharmaceutical market, intellectual property protection, drug registration, pricing and reimbursement and other cost-containment methods, and pharmaceutical distribution in both Bulgaria and Romania. We conclude with a brief assessment of the implications for the pharmaceutical industry.
Business Implications
- In January 2007, Bulgaria and Romania are scheduled to become the newest members of the European Union (EU). The two nations rank among the poorest in Europe, but their economies—and their pharmaceutical markets—are growing fast. In both countries, foreign drugs account for less than one-third of prescriptions but have a market share of at least two-thirds in monetary terms. Consumers reportedly have a high opinion of imported medicines and frequently favor these products if they can afford them. Sales of imported medicines have grown steadily in recent years, and this trend is likely to accelerate as the Bulgarian and Romanian economies continue to grow.
- Strong intellectual property protection is a relatively recent innovation in Bulgaria and Romania, and further progress will be needed to meet EU standards. In 2003, the Bulgarian government introduced a Roche-Bolar provision to enable generics manufacturers to begin developing generic versions of a drug two years before its patent expires. The Romanian government did not introduce data exclusivity for regulatory dossiers until April 2004. The research-based industry has criticized the fact that data exclusivity in Romania begins when a drug gains its first marketing authorization in any EU member state, not when it is approved in Romania. Furthermore, the Romanian government curtails data exclusivity when a product’s patent expires.
- Fears that EU enlargement will open the floodgates to parallel trade appear to be unfounded. Like the eight Central and Eastern European countries that joined the EU in 2004, Bulgaria and Romania will be subject to the 'specific mechanism' that severely restricts parallel exportation to established member states. This mechanism will operate on a case-by-case basis as long as differences in intellectual property protection remain between these accession countries and older EU member states. A further obstacle to parallel trade is the fact that some international pharmaceutical brands are more expensive in Bulgaria and Romania than in Western European countries.
- In December 2003, the Bulgarian government introduced a new positive list—a catalogue of drugs that may be eligible for reimbursement but are not automatically covered. Research-based companies complain that this measure creates additional bureaucracy, requires the submission of a huge amount of largely unnecessary data, seriously delays market access, is subjective (even to the extent that it had a pro-generics bias), and offers no right of appeal. Foreign companies may lose sales of BGN 50 million ($31.7 million) per year from the exclusion of their products from the positive list.
- The Romanian government has angered the research-based pharmaceutical industry by introducing different reimbursement rates for patent-protected branded medicines and generics (50% and 65%, respectively). The recent imposition of reference pricing has intensified manufacturers’ criticisms and reinforced the belief that the government discriminates against imported medicines.
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