End of Spectacular Growth on the Rx Market in Poland

According to PMR, the Polish prescription drug market will expand by 5.1% in 2006. In the following year, the increase will be slightly less marked. The implemented cuts in prices of refunded medications will be most painful for foreign companies, whose pharmacy sales are expected to fall in 2007 by 4%, while domestic producers should generate 12% revenue growth on sales of prescription drugs next year.

(PRWEB) October 13, 2006 -- According to “Rx market in Poland 2006”, a report prepared by PMR, a research and consulting firm, the Polish Rx market was worth PLN 13.3bn in 2005, as calculated at retail prices, which corresponds to a 6.5% growth year on year. In part, the year-on-year increase resulted from a low comparison base from the previous year, when the Rx market had expanded by only 1.6%.

“Additionally, in 2005 patients purchased more antibiotics (as a result of the greater incidence of the flu in the season) and refunded drugs (2005 saw more “medications for a grosz” promotional campaigns aimed primarily at augmenting sales of refunded drugs)” Monika Stefanczyk, the author of the report, explained. The market also grew thanks to patients’ better financial standing and the resulting capacity to purchase all the physician-prescribed drugs.

According to PMR’s forecasts, the Polish Rx market will be worth PLN 14bn by the end of 2006, expanding at an annual rate of 5%. In the subsequent year, it will exceed PLN 14bn, increasing by approximately 4%. PMR does not expect to see any spectacular growth on the Rx market in the upcoming years. The prediction has been formulated in view of the Ministry of Health implementing a policy of lowering drug prices (by, for example, introducing stiff sales margins and prices) and an increasingly common trend among patients, of preferring cheaper substitute preparations," Ms Stefanczyk remarked.

Domestic producers win market share

As a result of the government’s drug policy, which has actively promoted the placement of cheaper Polish medications on drug reimbursement lists; since 2003 the market share of domestic preparations in the value of the entire Polish Rx market has risen steadily. In 2003 sales of domestically manufactured Rx preparations accounted for 29% of total prescription sales; by the end of 2005 their percentage share had risen to 35%. Notably, last year domestic drugs accounted for an even greater share of total pharmacy (Rx and OTC combined) sales – 41%.

Last year, sales of prescription drugs manufactured by domestic pharma companies grew by approx. 14% relative to a year earlier. At the same time, pharmacies sold only 3% more imports, in value terms.

The greater importance of domestic medications is even clearer when considered from the perspective of pharmacy sales of refunded drugs. Between 2003 and 2005, the percentage share of domestic preparations in sales of refunded drugs grew by 8 p.p., from 25% to 33%. The jump was primarily fuelled by changes on reimbursement lists introduced at the end of 2003 and in 2004, which aimed to substitute more expensive foreign preparations with much cheaper, local pharmaceuticals. In 2006 the Ministry of Health has continued in its policy of giving preference to domestic producers and in the amended reimbursement list, which came into force on 1 July 2006, it lowered the prices of imported preparations by, on average, 13%.

Less foreign innovative drugs on the market

A few foreign makers of innovative (original) pharmaceuticals have decided to withdraw their products from trade in Poland as a reaction to the changes introduced by the Ministry of Health. They are the ones most hard hit by the mentioned changes in the reimbursement lists. According to PMR’s forecasts, sales of innovative preparations might well drop by as much as 11% in 2007 while the value of the generics (cheaper counterparts of innovative drugs) market is set to expand by around 7%.

Eli Lilly has decided, as on 1 July 2005, to suspend the distribution in Poland of its Zyprexa, a drug used to treat schizophrenia. According to the concern’s management, on the reimbursements lists, the preparation’s price has been lowered as to make its sales unfeasible for its maker. The government moves have also been officially criticised by Novartis which has said that the Polish government’s actions exemplify the tide of nationalism rising in Polish health care, which might well damage the market’s economic efficiency. Foreign innovative concerns, such as Pfizer and Eli Lilly, had as early as in 2005 announced that they would curtail their activities related to, for example, clinical testing in Poland. As a result, their rankings on the Polish Rx market fell in 2005. Eli Lilly is not even among the first 20 concerns in terms of the value of Rx pharmacy sales (in 2003 it had ranked 8th). Pfizer is among the largest companies active on the Polish Rx market, that in 2005 posted the steepest declines in sales revenue, in its case of 25%. Meanwhile, manufacturers of generic preparations are slowly gaining greater shares of the Rx market; among them, the Slovenian Krka which has advanced from the 14th position in 2002 to 8th in 2005, posting a 20% y-o-y increase in the value of Rx sales realised through pharmacies.

Other interesting information presented in the report:

The main source of pharmacy sales data in the report was PharmaExpert.

You are welcome to contact the author of the report:

Monika Stefanczyk

Pharmaceutical Market Analyst

Tel. /+48 12/ 618 90 57

More information on the report:

Marketing Department:

Tel. /+48 12/ 618 90 20

www: www.pmrpublications.com

About PMR:

PMR www.pmrcorporate.com is a publishing, consulting and market research company providing information, advice and services to international businesses interested in Central and Eastern Europe. With highly skilled staff, top ranked web sites and over ten years of experience, PMR is one of the largest companies of its type in the region.

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