Most leading pharma companies in Romania see sales drop in 2013

Romanian market stagnates in 2013

The Romanian pharmaceutical market's growth in terms of sales value dipped to just 0.3% year on year (y/y) in 2013, according to the Romanian branch of French pharmaceutical market research organisation Cegedim, quoted by Central Europe Pharma News. The market's value was estimated to have reached RON11.75 billion (USD3.62 billion). By contrast, the total market is estimated to have grown by 8.3% y/y in 2012 and 12.4% y/y in 2011. Breaking it down by segment, the value of sales of reimbursed drugs in the retail sector is reported to have declined by 0.8% y/y last year to RON8.39 billion; this contrasts with growth in this sector of 7.0% y/y and 8.1% y/y, respectively, in 2012 and 2011. Only the over-the-counter (OTC) sector of the market saw meaningful growth in sales value terms, with a sales increase in value of 6.5% y/y to RON1.78 billion. However, even in this sector, the growth dynamic was markedly lower than in the previous two years – in 2012, the value of OTC sales grew 12.0% y/y and, in 2011, by 15.2% y/y. The market's overall volume is estimated to have reduced by 1.1% y/y.

Fourth quarter sees 2.4% y/y decline in the market's value

In the fourth quarter of 2013, the total pharmaceutical market in Romania is reported to have declined by 2.4% y/y to RON3.1 billion. This includes a 2.8% y/y reduction in the sales of reimbursed medicines and a 0.3% y/y decrease in the sales value of hospital medicines. Sales of OTCs in the fourth quarter is reported to have increased by 4% y/y. Petru Craicun, Cegedim Romania's general manager, is reported by Central Europe Pharma News as saying that among the reasons for the market's deterioration are the shortage of state reimbursement funds, the continuing growth of parallel exports, and the disappearance from the market of many low-priced medicines.

Most producers in top 10 see reduced sales in 2013

Looking at the top-10 pharmaceutical companies by sales value in Romania last year, as estimated by Cegedim, there are several important changes compared with the year before. The most significant among these is the fact that the majority of companies in the top 10 saw a reduction – in some cases a significant one – in their sales in 2013 compared with the previous year. Only French group Servier, Indian generics major Ranbaxy (which owns Romanian producer Terapia), and Slovenian generics major Krka managed to increase their sales value, according to Cegedim's data. Furthermore, Swiss pharma major Roche moved up to the first position and the former market leader, major French pharma group Sanofi, receded to second place. GlaxoSmithKline (GSK, UK), whose sales include those of local subsidiary Europharm, fell from fourth to sixth position.

Much-awaited reimbursement list update delayed again

Meanwhile, the much-awaited update to the reimbursement list in Romania, which is set to add approximately 130 previously unreimbursed molecules to the list – which has not been properly updated since 2008 – is reported to have been put on hold again (see Romania: 20 February 2014: Romania's long-awaited reimbursement list update out to public consultation until 27 March and Romania: 24 December 2013: Romanian MoH reveals list of innovative drugs approved and rejected for major new reimbursement list update in 2014). As reports Romanian newspaper Puterea, the list update was supposed to be ready for implementation on 1 April, but Nicolae Banicioiu, the new Romanian health minister who has succeeded Eugen Nicolaescu following his resignation, has decided to put all draft legislation prepared under his predecessor on hold for re-assessment. The source reports that the update of the list has been postponed on several occasions – from 1 July 2013, to 1 January 2014, and then to 1 April 2014. Currently, it is entirely unclear when it might be brought into effect. In connection with this, Dragos Damian, the president of the Romanian Association for Generic Medicine Producers (APMGR), is reported by Romanian pharmaceutical news provider Pagina Farmacistilor as stating that the update can only happen when the drug reimbursement budget is sufficiently supplemented, estimating that the addition of the new drugs to the list will increase the cost of reimbursed drugs in the country by approximately RON2 billion per year.

Outlook and implications

The fact that the Romanian government has been required to use a significant amount of the money that it set aside for pharmaceutical reimbursement in 2013 to pay off historical debts of the National Health Insurance House (CNAS) for reimbursed drugs has certainly had an impact on the pharmaceutical market. The reduction in the market's volume – which can be related back to the withdrawal of many low-priced products, the marketing of which was considered uneconomical by producers, as well as removals of products resulting from the clawback system – is also clearly an important factor. In addition, the fact that larger standalone generics producers have seen their sales increase in Romania last year means that there has been progress in increasing the share of the market accounted for by generics, thanks to electronic prescriptions and closer supervision of doctors' prescribing behaviour. Furthermore, joint hospital tenders are likely to have brought down the costs of procuring medicines in hospitals, simultaneously reducing the sales values of pharmaceutical companies.

Meanwhile, sales of OTCs continue to increase, in a similar way to many other Central and Eastern European countries, where there is a similar decline in the sales of reimbursed drugs due to more restrictive regulatory conditions, resulting in producers dedicating more resources to selling OTC products, which are subject to considerably less regulation.

Cegedim is predicting a 2.7% y/y increase in the value of the Romanian pharmaceutical market this year, although it has based this prediction mainly on the updating of the reimbursement list. However, with this now being placed under review, there is no guarantee that the update will take place anytime soon.