Abstract
Hungary' s recent history of slashing pharmaceutical prices, restricting
reimbursement and squeezing
manufacturers has made the market an
increasingly unattractive proposition for multinational
pharmaceutical
companies. Following consistent market growth up to 2006, restrictive
regulatory
modifications have reduced market spending in the last two
years. Over the next five years BMI forecasts
the compound annual growth
rate (CAGR) for Hungarian drug expenditure will be -0.23%, with spending
restrictions weighted towards the front end of the forecast period.
Limited optimism for market growth is one of the key reasons for Hungary' s
slip to 10th position in
BMI' s Pharmaceuticals & Healthcare Business
Environment Rankings for Q209. Despite a reasonable
absolute size, the
country has a negative outlook for growth, combined with a constrictive
regulatory
environment - including the ' claw-back' and medical
representative taxes - and below average country
risk scores.
Hungary' s pharmaceutical budget is set to face further downward pressure in
2009 as a result of the worst
recession since the country' s 1991
transition to market capitalism. In Q109 the government announced
that
healthcare spending would be cut by HUF30bn (US$135mn), with half the savings
coming from the
National Health Insurance Fund (OEP)' s drug subsidies
budget. In addition price increases - as a result of
a weakened forint -
are expected in April 2009. BMI believes the cuts will not only burden
pharmaceutical companies but provide further impetus for them to reduce their
presence in Hungary.
Negative currency fluctuations have also impacted
manufacturers, who have called for price adjustments
during Q209. In 2008
786 drugs were reduced by an average of 15%. Despite a further 4% reduction
for
355 drugs in January 2009, increases across 2009 may be inevitable as
a response to the devalued forint.
Domestic manufacturers Gedeon Richter
and Egis have demonstrated the ongoing struggles for
pharmaceutical
companies over the last year. Recent financial results show domestic sales
contraction,
while the current economic downturn has compounded issues.
Richter has announced it will not publish
forecasts for 2009 due to the
volatile economic environment. The CEO, Erik Bogsch, stated that while the
company' s Q408 results do not reflect the ongoing crisis, 2009 will prove to
be a difficult year for the
pharmaceutical sector. Both companies continue
to look to foreign markets as the prime opportunity for
growth.
| 
View Cart
