IHS Global Insight Perspective | |
Significance | The value of the Bulgarian pharmaceutical market jumped by 10% year-on-year in the first half of 2010, with major Swiss innovative pharmaceutical producer Roche overtaking the long-standing market leader, Icelandic generics producer Actavis. |
Implications | Greater access to expensive medicines for serious diseases due to inclusion on the national health insurance fund's list, and new regulations enabling general practitioners to prescribe drugs for certain diagnoses, helped boost their sales in this period. |
Outlook | Given the ongoing financial turmoil of the Bulgarian healthcare system, there are doubts over whether such a dynamic growth rate can be sustained in the second half of 2010; however, as has been demonstrated already, Bulgarians are inclined to continue purchasing medicines, even though they have to bear a disproportionate burden of their costs. |
The Bulgarian pharmaceutical market—including sales of pharmacies and sales to hospitals—grew in value by 10% in the first half of 2010 in comparison with the first half of 2009, to reach a value of US$620.7 million, reports Bulgarian business news provider Capital, based on information from IMS Health. Growth was seen across all sectors, including over-the-counter (OTC) drugs and dietary supplements. An important factor in the growth of the market is reported to be the introduction of regulations permitting general practitioners (GPs) to prescribe certain medicines without the need for consultation with a specialist.
Roche Overtakes Actavis As Market Leader
During the first half of 2010, there was a significant shift in the top-ranking pharmaceutical companies in Bulgaria, in terms of sales, with the long-standing market leader, Icelandic generic producer Actavis, being overtaken by Swiss pharmaceutical major Roche. Another significant development has been the entry of U.K. pharma major AstraZeneca into the top 10. According to IMS Health data, the majority of leading pharma companies in Bulgaria recorded strong growth during the period. Medicines for serious diseases—principally cancer, hepatitis, and anaemia as a result of kidney disease—represented 85% of Roche's Bulgarian sales during this period, according to Roche Bulgaria's communications manager Victoria Kukova.
Changes in NZOK Drug List and GP Prescription Rules Boost Originator Drug Sales
The shift from generics to originator drugs on the Bulgarian market has been spurred by the inclusion of new expensive drugs on the list of the Bulgarian National Health Insurance Fund (NZOK). Additionally, a regulation introduced in 2009 that means GPs are able to write prescriptions for certain diagnoses without the patient having to consult a specialist has meant that access to these treatments has become easier.
Pharmacy Sales Up 15% Y/Y, OTC Sales Up 8.2% Y/Y
The total value of pharmacy sales in Bulgaria during the first half increased by 15% year-on-year (y/y) in value, to reach 623 million leva (US$405 million), in spite of reductions in the purchasing power of Bulgarians and the difficult situation surrounding the financing of public healthcare in Bulgaria. Even more surprising, in this context, is the increase of 8.2% y/y in the value of OTC sales in the first half, although in volume terms, the OTC market experienced no growth in Bulgaria during this period.
Originator Medicines Catching Up with Generics
Sales of originator medicines grew by 8.3% y/y in volume terms during the first half of 2010, while in value terms, they grew by 17.4% y/y. As a result, originator drugs are catching up with generics in terms of market share in Bulgaria; currently, generics account for 52% of the Bulgarian market by value, with originator drugs accounting for 48%, but they are now very close to parity. However, the source reports that generics producers have to sell around four times the volume of the medicines sold by innovative pharma producers in order to reach their equivalent in value.
Number of Pharmacies Declines
According to statistics from the Bulgarian ministry of health, reported by the source, there were around 4,302 pharmacies in Bulgaria at the end of the period, although only around 3,800 of these are active, reports Capital. The reason for the closures, according to Kuncho Trifonov of IMS Health Bulgaria, quoted by the source, is often because the pharmacies concerned do not meet standards for the storage of medicines, while economic reasons are also frequently to blame: some may be affected by the fact that they are too small and are squeezed out by larger competitors, while all are affected by the delayed payments for prescription drugs by the NZOK.
Outlook and Implications
The Bulgarian pharma market grew more dynamically in the first half of 2010 than in 2009, when its growth rate reached 8% y/y (see Bulgaria: 8 February 2010: Bulgarian Pharmaceutical Market Grows 8% Y/Y in 2009 as Novartis Ousts Sopharma from Second Position). Additionally, the trend for producers of more expensive medicines to improve their sales in the country had already begun last year, as Novartis ousted domestic generics producer Sopharma from second place.
The growth of sales of expensive originator medicines for the treatment of serious diseases is a phenomenon witnessed in many Central and Eastern European countries. Neighbouring Romania has seen a large boom in the sale of these medicines, putting their producers—including new Bulgarian market leader Roche—into the first position in the Romanian pharma market.
Nevertheless, it is a significant development, particularly at a time when Bulgaria's healthcare sector is struggling with major issues regarding funding, and there will be doubts over whether these will not have a sufficiently adverse affect to reverse the trend of growth in sales of expensive medicines for serious illnesses (see Bulgaria: 27 August 2010: Turmoil in Bulgarian Healthcare System Continues). Although access has been improved in practical terms, with patients able to obtain certain medicines from GPs that were previously only available with a specialist's prescription, there are questions over whether access will be restricted by the funding problems in the system again.
However, as Bulgarians have demonstrated in the first half of 2010, despite lower purchasing power resulting from the effects of the financial crisis, they are still willing to pay for medicines, even though these medicines are more expensive than previously, as the discrepancy between the volume growth and value growth of originator and OTC drug sales demonstrates.