Recently published research from Business Monitor International, "Romania Pharmaceuticals & Healthcare Report Q1 2014", is now available at Fast Market Research
Boston, MA -- (SBWIRE) -- 12/25/2013 -- We forecast sluggish growth in Romania's pharmaceutical market over the short term due to greater private contributions to the cost of healthcare and stubbornly high unemployment levels. This is moderating health insurance revenues for the state insurer. The partial removal of elements of the clawback tax will undoubtedly provide the industry with a slight boost this year, as will pressure from creditors to repay debts and companies on time. However, the delaying of changes to the reimbursement list to January 2014 and a low ceiling for pharmaceutical expenditure will moderate pharmaceutical growth of patented and prescription medicines in 2014. These issues continue to weigh down BMI's assessment of Romania's Pharmaceutical and Healthcare Risk/Reward Ratings into Q114.
Headline Expenditure Projections
- Pharmaceuticals: RON13.55bn (US$3.91bn) in 2012 to RON13.96bn (US$4.20bn) in 2013; +3.0% in local currency terms and +7.5% in US dollar terms. US dollar forecast down from Q413 due to leu appreciation.
- Healthcare: RON34.02bn (US$9.81bn) in 2012 to RON36.36bn (US$10.94bn) in 2013; +6.9% in local currency terms and +11.5% in US dollar terms. Forecast changed from Q413 due to appreciation in leu.
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Romania has a RRR score of 55.0 out of 100, making it the eighth-most attractive pharmaceutical market in the Central and Eastern Europe region. Romania's RRR score has fallen from Q413 due to a worsening outlook for 2013 pharmaceutical sales. Although over the long term Romania promises a positive growth story, punitive taxes, pricing controls and a lack of funding by the state for reimbursing patients will moderate the market's attractiveness to drugmakers.
Key Trends And Development
- In January 2014, the reimbursement list will finally be updated, although we believe generic drugs will primarily see inclusion on the new list at the expense of patented medicines.
- Having secured IMF funding, as part of its credit deal, Romania will have to pay off its debts to drugmakers and suppliers to its healthcare system. The IMF is also pushing for Romania to increase its tax base, reform its healthcare system and increase its healthcare expenditure to meet its demographic changes.
- In February 2013 the Romanian Constitutional Court ruled that part of the claw-back tax was unconstitutional. The calculation method for determining the amount the industry had to pay the Romanian government used the post-VAT price of medicines, thereby inflating the amount due back to the government. The court ruled that drugmakers had been unfairly double-taxed by the provision. BMI Economic View: We forecast real GDP in Romania to expand by an above-consensus 2.4% in 2013 and 2.8% in 2014, driven by robust exports and a moderate recovery in private consumption through H213.
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