Abstract
BMI has downgraded its forecast for Hungary’s US$3.28bn pharmaceutical
market after the
macroeconomic climate deteriorated further in Q209. The
country is experiencing its worst recession
since the removal of most
state subsidies in 1991, and recovery is not expected until 2011 at the
earliest.
Government and private spending on healthcare have both been
impacted significantly. Through to 2013,
we are forecasting pharmaceutical
expenditure compound annual growth rates (CAGRs) of -1.25% and -
15.49% in
local currency and US$ terms, respectively.
This dire situation is
reflected in our Q309 Business Environment Ratings. Hungary is now the 11th
most
attractive pharmaceutical market in Central and Eastern Europe (CEE),
dropping one place since the
previous quarter. What is more revealing is
that Hungary was the third highest-ranked market as recently
as Q308. The
country scores above the regional average for Country Structure and Country
Risk, but
below for Pharmaceutical Market and Market Risk.
Reduced
pharmaceutical spending over the next five years will invariably have an
effect on Hungary’s
health profile. BMI’s Burden of Disease
Database (BoDD) reveals that 1,311,940 disability-adjusted life
years
(DALYs) were lost to non-communicable diseases – such as diabetes,
cancer and cardiovascular
conditions – during 2008. This equates to
86.2% of the total disease burden. The impact of infectious
diseases over
the medium term will be reduced through continued uptake of vaccines, which
are the most
cost-effective healthcare intervention, and therefore most
likely to be purchased by the embattled state
sector.
Government
cost-containment measures form the bulk of the Pharmaceutical Research and
Manufacturers
of America (PhRMA)' s Special 301 Submission 2009 on Hungary.
As well as referring to EU calls for full
implementation of data
protection legislation, the PhRMA opposes a multitude of factors
restricting
innovation, including pharmaceutical sales taxes,
representative fees, the overspend claw-back
mechanism and reimbursement
factors – all key drawbacks previously highlighted by BMI.
Perhaps
the most significant company development during the previous quarter was the
deal between
Egis and the US-based multinational Merck Sharp & Dohme
(MSD). The Budapest-based drugmaker
will distribute MSD’s
blockbuster diabetes treatment Januvia (sitagliptin) in Hungary. This is a
significant endorsement of the local firm’s capabilities and will
provide a much needed revenue boost in
these challenging times.
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