The Romanian drug market continued to go down during the second quarter of this year, although most players had expected a rebound in the wake of the clarification of the problems experienced by the health care system. The problems were not cleared up, however, and the drug consumption amounted to 589.6 million euros throughout July 2002 – June 2003, 2.2% lower as compared to April 2002-March 2003, according to the data supplied by Cegedim Bucharest, a market research company.
The overall market slump, occurring for the first time after four years during which drug consumption redoubled, came amid one of the most hectic periods in the history of the Romanian health care system: the State’s debts to drug producers continue to exceed 250 million euros and there are no signals the situation will soon improve.
“A market decline was the natural thing to happen. This year, new problems came up and joined the usual financial crisis: hospitals and pharmacies were late in concluding contracts with county insurance companies, while the caps on compensated drugs set for pharmacies put a damper on sales,” stated Ioan Nani, general manager of Antibiotice Iasi, the third Romanian drug maker.
Lower sales to hospitals, as a result of their reluctance to buy (due to a lack of money and to controls imposed over acquisition policies) was the main cause behind the overall decline of the market. During the July 2002-June 2003 period, sales to hospitals -177.6 million euros, were 5.1% lower as compared to April 2002-March 2003 period.
The retail segment did not report any significant progress, either, despite upbeat expectations, going 1% down over the above-mentioned period.
“This year we have witnessed the first effects of the price liberalisation on the OTC drug (drugs without prescription) segment. Many pharmacies and distribution companies upped their margins on this segment, a decision that was not welcomed by consumers because of their low purchasing power. The decrease of the retail segment was also due to the almost two-month delay in the application of the new list of benchmark prices for compensated drugs,” Dragos Damian, general director for Romania with Menarini-Berlin Chemie Italian group believes.
Damian says that the overall market decline is specific for a year of transition, where drug suppliers had a cautious sales strategy amid the difficult financial situation.
“The situation will become stable during the third and fourth quarter, when we expect half of the debts to be paid. I think, however, that the market will still register a yearend slump,” Damian estimates.
The first signals of a decline this year, occurred at the very beginning of 2003, when the over 300 million euro receivables held over the system resulted in part of the major drug makers coming close to or even freezing supplies to hospitals. laurentiu.ispir@zf.ro