The Polish pharmaceutical market is predicted to grow by 4.2% y/y in 2013, and to continue growing in the following two years; meanwhile, the Polish National Health Fund has revealed that in the first five months of 2013, only 35% of its drug budget for the year was spent, showing how effective recent policies have been in keeping drug spending under control.
IHS Global Insight perspective | |
Significance | It is being predicted that Poland's pharmaceutical market will bounce back in 2013 and grow by 4.2% year-on-year, continuing to grow in the subsequent years; at the same time, the Polish National Health Fund has revealed that in the first five months of 2013 it used only 35% of its drug budget. |
Implications | In the first three months of 2013, and particularly in January, the Polish retail pharmaceutical market grew strongly, due in the main to the very strong reduction in sales during the same months of the previous year. The current growth is being driven by all sectors other than reimbursed prescription drugs, even though this is still the largest sector. |
Outlook | This is encouraging for the pharmaceutical industry, considering the importance of Poland as a strategic market in the Central and Eastern Europe region, although it remains to be seen whether the Polish Ministry of Health will harness the efficiencies gained thanks to the Reimbursement Act and invest them in increasing access to innovative medicines. This has happened to a limited extent, but there is still a lot of room for improvement. |
Polish pharma market predicted to bounce back
The Polish pharmaceutical market is set to bounce back in 2013, having declined in value year-on-year (y/y) during 2012 for the first time in some years, according to market research consultancy PMR, which is predicting growth in the overall pharmaceutical market of 4.2% y/y in 2013, to PLN27.644 billion (USD8.398 billion). PMR estimates that the Polish pharmaceutical market declined by 5.7% y/y in 2012.
Long-lasting effects of Reimbursement Act
According to PMR, the main reason for the predicted growth in the market is the impact of the large-scale stockpiling of medicines in the last months of 2011 ahead of the implementation of the Reimbursement Act, and the subsequent dramatic reduction in sales in the early months of 2012. This is reflected in the very high growth in the retail pharmaceutical market in January 2013, and respectable growth rates in the months following: according to Polish pharmaceutical market information specialists PharmaExpert, the retail pharma market grew 28% y/y in January 2013, followed by 3.6% y/y in February, 3.1% y/y in March, and 3.8% y/y in April. According to PharmaExpert's data, the growth rate had already cooled to 1.3% y/y in May, which is consistent with the development of the market in 2012, when recovery started to appear in April after three months of significant declines.
Growth predicted to continue
Encouragingly, PMR does not expect the market to stop growing, despite regaining its equilibrium after the shock of the Reimbursement Act. Indeed, it is predicting a compound annual growth rate of 4.7% in 2013–15 and growth in the overall pharmaceutical market of 4.4% y/y in 2014 and 5.6% y/y in 2015, when its value is predicted to exceed PLN30 billion (to reach a predicted PLN30.470 billion).
NFZ notes low proportion of drug budget spent in January–May
Meanwhile, the Polish National Health Fund (NFZ) has revealed information on its drug reimbursement expenditure for the first five months of 2013, showing that only 35.22% of its budget for 2013 has been used. The total budget for the year stands at PLN10.901 billion, and of this, only PLN3.839 billion was spent in January–May. Just 36.12% of the budget for drugs reimbursed via pharmacies has been used, and when it comes to "standard" chemotherapy medicines, a mere 25.8% of the funds have been used. Some 34.48% of the budget for medicines included in drug programmes has been used.
Outlook and implications
In the months leading up to the introduction of the Reimbursement Act at the beginning of 2012, pharmaceutical companies had to negotiate new prices with the Ministry of Health (MoH) on the basis of a new system, which resulted in considerable price reductions and many producers simply opting not to apply for reimbursement under the new system. Reimbursement levels were also adjusted, resulting in the large level of stockpiling in the last months of 2011. The contracts for reimbursement negotiated at that time are due to expire at the end of 2013, but thanks to the so-called "small amendment" to the Reimbursement Act, the process of reapplying for reimbursement will be significantly simplified (see Poland: 27 June 2013: "Small" amendment to Poland's reimbursement act ratified, including restriction on price increases). However, at the same time, pharmaceutical companies will have to submit new applications and engage in price negotiations with the Polish MoH (see Poland: 8 July 2013: Pharma companies must submit simplified application to renew Polish reimbursement before end-2013). Even though the Polish MoH will want to restrict the number of medicines that are dropped by producers from the reimbursement system in Poland at the renegotiation stage, it will equally be looking to maintain its focus on lowering the prices of reimbursed medicines.
Thus, the likelihood is that the growth in the Polish market will be driven mainly by the sales of over-the-counter medicines, non-reimbursed prescription medicines, and hospital drugs, which, in contrast to reimbursed prescription drugs in the community sector, saw sales growth in 2012 (see Poland: 1 March 2013: Polish hospital-drug market grows 5.9% in value during 2012 to almost USD1 bil.).
Interestingly, the figures from the NFZ on the budget for 2013 are different from the last budget estimate for 2013, made in late 2012; significantly, the amount dedicated to the "chemotherapy" category, which includes high-cost modern cancer drugs such as MabThera (rituximab; Roche, Switzerland) and Erbitux (cetuximab; Merck Serono, Germany), is just PLN633.9 million, compared with PLN739.546 million in the previous budget. Contrastingly, the amount set to be spent on medicines used in drug programmes has been increased from PLN1.877 billion to PLN2.047 billion. It is likely that this is connected to the moving of medicines from the chemotherapy category to a drug programme.
The NFZ's underspend in the first five months of 2013 shows how effective the Reimbursement Act has been at calming drug spending in Poland; it remains to be seen whether the Polish MoH will see this as an opportunity to increase spending on and access to high-cost innovative medicines in the country, as was one of its main promises when the Reimbursement Act was originally drafted.