Drug market coming down with a flu

The Romanian drug market is starting to feel the effects of the arrearage in the health care system more and more powerfully. After many years of sustained growth in a row, the drug consumption is showing signs of decline after Q1, 2003.

Drug sales throughout April 2002 – March 2003 amounted to 603.1 million euros, 1.3% less than the market level in 2002 (611.2 million euros), according to the data provided by market research company Cegedim Romania.

Sales of the drug producers totalled 146.8 million euros in the first quarter. Were a similar trend to maintain all through the year, the 2003 sales drop would be of more than 4%.

Are these bearish forecasts? No, they may be rather optimistic, market analysts say.

“The results in the first quarter look better than the reality out there, as the drug consumption was sustained to a certain extent by the drug stocks built at the end of last year, which have been paid only in part,” says Petru Craciun, Cegedim Romania general manager.

The first quarter of this year and the last few weeks of 2002 were the tensest moment for the relation between the State and the pharmaceutical companies in the last few years.

The State’s debts to producers and importers that had come to exceed 300 million euros last year made part of the companies halt or reduce deliveries to hospitals and drugstores.

The situation was somehow alleviated by a protocol concluded between the Health Ministry, the National Health Insurance House and companies early this year, yet the payment of part of the debts (many of which dating back to 2001) did not start until March.

The uncertainties about the payment of the 2002 debts and of the drugs sold to hospitals and drugstores (through the compensation system) this year, have made most of the companies embrace a more cautious sales policy in Q1. Subsequently, 2003 might be the first year of decline after a long time of growth.

“Considering the first signals in the second quarter, we estimate the growth prospects of the market over the next period are dim and think the money troubles of the companies – from producers to small retailers, involved in this system to maintain,” Petru Craciun concluded.

The first quarter of 2003 saw major changes in terms of hierarchy of players on the domestic market. Swiss Novartis Group moved up the ladder to second place, with 7.1% market share, following takeover of Slovenian Lek Company worldwide. Pfizer, world’s number one, in its turn climbed to the third place with 6.1% market share, after integrating Pharmacia’s operations. laurentiu.ispir@zf.ro