Hospital sector flourishes in Hungary but pharma market value edges down in 2012

Hungarian pharma market value drops 3.67% y/y in 2012

The value of Hungary's pharmaceutical market in 2012 fell by 3.67% year-on-year (y/y) to reach HUF573 billion (USD2.435 billion), according to data from IMS Health, as reported by Hungarian pharmaceutical news provider Marketing Pirula. The market's overall volume also fell, by 1.5% y/y, to 305 million packages. The market sector with the largest reduction in value terms was the community pharmacy sector, which suffered a 9.95% y/y drop in sales value to HUF442 billion, according to the IMS Health data. In contrast, the hospital sector experienced a 25.96% y/y increase in value terms in 2012, reaching a reported HUF131 billion. At the same time, the volume of the hospital-drug sector is reported to have suffered a 2.6% y/y decline.

Generic share boosted

On the basis of IMS Health data, Marketing Pirula reports that 2012 saw a considerable increase in the proportion of the volume of the Hungarian market – measured in terms of treatment days – accounted for by generics, rising to as much as 60%. Thus, the Hungarian government's pro-generics policies are having their effect on the market, alongside other general cost-containment policies.

Only Roche increased sales

As the source reports, both pharmaceutical producers and other groups in the supply chain (i.e. pharmacists and distributors) felt the unfavourable effects of these policies. Of all the top 10 pharmaceutical companies on the Hungarian market in 2012, only one – Swiss major Roche – was able to increase its revenue, by a reported 10.7% y/y, raising its position from eighth in 2011 to fourth in 2012. The top three remained unchanged, with Swiss firm Novartis in first place, its sales falling a reported 4.3% y/y to HUF53 billion, followed by Sanofi (France) in second and Teva (Israel) in third. Novartis benefited from the positive performance of its Sandoz generics unit, from which a number of its products continued to perform well in Hungary, including oncology drug Glivec/Gleevec (imatinib), which was the fifth largest selling drug in the country during 2012. Following Roche in fourth came the largest Hungarian drug maker, Gedeon Richter; Merck, Sharp & Dohme (MSD, the European representative company of US major Merck & Co); Pfizer (US); and Hungary's Egis in fifth, sixth, seventh, and eighth, respectively. The last two places were occupied by GlaxoSmithKline (GSK, UK) in ninth and Bayer Healthcare (Germany) in 10th. The source reports that Sanofi, GSK, Richter, and Egis all experienced double-digit declines on the Hungarian market in 2012.

Anti-cancer drugs with highest sales

The therapeutic areas that were associated with the largest sales value for pharmaceutical products in Hungary during 2012 underwent some changes compared with the previous year. On the basis of anatomic therapeutic chemical (ATC) level 3 definitions, the therapeutic group with the largest sales was anticancer agents (L01X), while insulins (A10C) are reported to have risen one place in comparison with the previous year. In terms of therapeutic areas that lost the most value in 2012, the source reports that there was a double-digit reduction in the value of the sales of cholesterol-lowering drugs, proton-pump inhibitors (PPIs), and antipsychotics. This is principally related to the blind-bid off-patent drug tenders. It is reported, for example, that the average prices of PPIs have gone down by 26%, while prices of cholesterol-lowering drugs have fallen by 25% on average.

As a result, the companies that are best placed on the Hungarian market are producers of speciality products. This is shown in the top 10 pharmaceutical products by sales value in Hungary during 2012. The leading product was Sanofi's Clexane (enoxaparin), with sales of HUF8.9 billion, an increase of 13.3% y/y; in second place is Roche's Avastin (bevacizumab), sales of which grew a reported 23.4% y/y to HUF8.6 billion; and In third was Humira (adalimumab; Abbott, US), which saw sales growth of 24.3% y/y to HUF6.8 billion.

Outlook and implications

Among the reasons for the improvement in the hospital sector in Hungary during 2012 was the fact that the distribution of a number of drugs previously distributed through pharmacies was moved to hospitals only (see Hungary: 20 January 2012: Nine Reimbursed Biotech Drugs to Be Made Available Only from Hospitals in Hungary to Improve Monitoring). This will have added to the actual organic growth of the sector to push the growth in its value to such an impressive figure.

Looking at the community pharmacy sector, the fact that there was only a 1.4% y/y decline in the volume of this sector, while it fell in value by as much as 9.95% y/y, shows the real impact of the blind-bid off-patent tenders, which have resulted in the decline in prices mentioned above, and thus a lower profitability for pharmacists. This promises to become a more serious issue for both pharmacists and wholesalers in due course; already during the course of 2012, leading Hungarian pharmaceutical wholesaler Hungaropharma announced a programme of downsizing.

The year 2012 could have been even worse for the pharmaceutical industry in Hungary, but the country's government intervened in the latter half of the year to boost the drug reimbursement budget of the National Health Insurance Fund Administration (OEP), and even then, it managed to overshoot the increased budget (see Hungary: 12 February 2013: Hungary's public drug reimbursement spending overshoots target by 13.5% in 2012).

In 2013, there are reports that the government intends to maintain the OEP's budget at about the same level as in 2012, thus averting the crash that would have ensued had it decided to persevere with the previously planned cuts.