The Romanian pharmaceutical market grew by 4.3% year-on-year in the first quarter, with over-the-counter medicines taking up the slack from prescription drugs, which saw a drop in their sales growth dynamic.
IHS Global Insight perspective | |
Significance | Over-the-counter medicines saw the fastest sales growth rate in Romania's pharmaceutical market during the first quarter, as the market grew overall by 4.3% year-on-year; there was a decline in the sales growth rate for prescription pharmaceuticals sold via community pharmacies. |
Implications | Regulatory restrictiveness, mainly associated with the clawback system, was the main reason for the decline in the growth dynamic of the prescription-drug segment, which was in turn the main reason for the slower growth of the market overall. |
Outlook | Cegedim predicts growth of just 1.4% y/y for the Romanian pharma market in 2013, mainly due to this ongoing restrictiveness; it is unlikely that the boom in the sales of over-the-counter medicines will be sufficient to counter-balance declining sales of prescription medicines, so the industry will be hoping for a change in regulatory direction in this volatile market. |
Romanian pharma market grows 4.3% y/y in Q1
Romania's pharmaceutical market grew by 4.3% year-on-year (y/y) in wholesale price terms during the first quarter, to RON3.05 billion (USD904.577 million), according to data from the Romanian branch of pharmaceutical industry research organisation Cegedim, reported by Romanian news agency Mediafax. In quarter-on-quarter terms, however, the market dipped by 2.5%. In euro terms, the market grew in the first quarter by 3.6% y/y. The largest segment of the market – prescription drugs sold via community pharmacies – grew the most slowly, with a rise of just 2.5% y/y, reaching a total value of RON2.17 billion. The performance of the retail pharmaceutical sector was boosted by a 10.3% y/y rise in sales of over-the-counter (OTC) medicines to RON480 million. Along with OTCs, sales of hospital drugs also grew faster than the market as a whole, rising 7.9% y/y to RON406.5 million.
Romanian pharmaceutical market value by segment, Q1 2013 | ||
Q1 2013 (RON mil.) | % change y/y | |
Retail sector | 2,640.0 | 3.1 |
-prescription drugs | 2,170.0 | 2.5 |
-OTC drugs | 480.0 | 10.3 |
Hospital medicines | 406.5 | 7.9 |
Total | 3,050.0 | 4.3 |
Source: Cegedim, Mediafax | ||
Market stagnates in April 2012–March 2013 in euro terms
Looking at the year from the beginning of April 2012 to the end of March 2013, the value of the Romanian pharmaceutical market grew in RON terms during this period by 4.5% y/y, according to Cegedim's data, reaching RON11.84 billion. However, in euro terms it stagnated, remaining at EUR2.65 billion (USD3.42 billion). Over this period, OTC drugs was also the most dynamically growing market segment, with sales up by 8.4% y/y in RON terms, while sales of prescription drugs via community pharmacies were up by 3.8% y/y and sales of hospital drugs by 4.2% y/y (both in RON terms).
Little change in market rankings
The top three pharmaceutical companies in Romania remained unchanged in the first quarter, with France's Sanofi still in the top position, which it has occupied for several years now; Sanofi's sales in Romania also include those of its generic arm Zentiva, which is a major player in the Romanian market. Swiss majors Roche and Novartis remain in the second and third places, as they were in 2012, while there has been a small adjustment in the next three places, with France's Servier pulling ahead of GlaxoSmithKline (GSK, UK), which descended into sixth, while Pfizer (US) moved up one place to fifth. The only generic producer to appear in the top 10 is Ranbaxy (India), which owns Romanian producer Terapia, while the highest-placed Romanian-owned company in the rankings is Antibiotice, the state-owned generics producer, which remains just outside the top 10, in 11th place.
Top 5 pharmaceutical companies in Romana by sales value, Q1 2013 | ||||
Rank | Company | Sales, Q1, (RON mil.) | Sales, April 2012–March 2013 | Market share |
1 | Sanofi (France) | 239.0 | 975.7 | 8.2 |
2 | Roche (Switzerland) | 219.5 | 876.2 | 7.4 |
3 | Novartis (Switzerland) | 186.3 | 741.2 | 6.3 |
4 | Servier (France) | Not available | 655.8 | 5.5 |
5 | Pfizer (US) | Not available | 624.3 | 5.3 |
Source: Cegedim, Mediafax. | ||||
Outlook and implications
Cegedim is maintaining its cautious growth forecast of just 1.4% y/y for 2013 (in RON terms), due to the various constraints placed on the market, particularly with the imposition of the clawback system. This system has had a visible impact on the sales of reimbursed medicines via community pharmacies, which grew by 7% y/y in 2012 as a whole, while in the first quarter of 2013, their sales grew by just 2.5% y/y (see Romania: 15 February 2013: Romanian pharma market grows 8.3% y/y in 2012, growth dynamic slows to 3.9% y/y in Q4). Pharmaceutical companies are being cautious about their portfolios and seeking to avoid situations in which they will be liable to pay back significant amounts under the clawback system if the reimbursement paid out for their drugs is much higher than forecast. This is an automatic dampener on the prospects for the growth of this market segment.
Thus, the OTC sector has become the area in which the market's growth is concentrated, mirroring a pattern that can be seen throughout the Central and Eastern Europe region as governments seek to rein in booming pharmaceutical reimbursement expenditure. Additionally, there has been an increase in the growth dynamic in the hospital medicines segment, which is also a positive sign; spending in this segment in Romania is still very low in relative terms, and there remain prospects for considerable growth in this segment during the coming years.