BMI View: Hungary's improving macroeconomic outlook and pledges by the government to raise healthcare expenditure will boost pharmaceutical sales in the coming years. Consumer demand for over-the-counter medicines and greater uptake of generic medicines will be the primary drivers of pharmaceutical sales growth, as uptake of innovative drugs will remain hindered by the pricing sensitivity and budgetary constraints of the OEP national healthcare fund. However, Hungary's attractiveness to multinational drugmakers will remain impeded by onerous regulatory burden, pricing pressures and punitive taxes on pharmaceutical companies.
Headline Expenditure Projections
Pharmaceuticals: HUF640.21bn (USD2.75bn) in 2014 to HUF652.76bn (USD2.31bn) in 2015; +2.8% in local currency terms and -15.9% in US dollar terms.
Healthcare: HUF2,382bn (USD10.23bn) in 2014 to HUF2,427bn (USD8.60bn) in 2015; +1.9% in local currency terms and -15.9% in US dollar terms.
Hungary currently ranks fourth out of the 20 regional markets profiled in the Central and Eastern Europe region, with a score of 56.0. While its Risks profile is generally predictable, Hungary's Rewards score has improved considerably due to favourable currency effects and our improving outlook for the country's pharmaceutical market.
Key Trends & Developments
In July 2015, the National Institute of Pharmacy and Nutrition (OGYEI) announced that all drugs containing codeine were to be transferred from the over-the-counter category to prescription-only category.
In July 2015, the Hungarian parliament passed the Act on Primary Healthcare, delegating the responsibility of primary care to municipal governments.
In June 2015, the Hungarian government submitted a bill to parliament designed to prevent the illegal parallel export of medicines. The bill stipulated that marketing authorisation holders were to be entitled to refuse to supply any medicines ordered if they believed that they were oversupplying the Hungarian market.
In May 2015, the Hungarian government proposed to increase the budget for the healthcare insurance fund to HUF1,963.7bn (USD7.13bn) for 2016, up from HUF1,912bn (USD6.95bn) in 2015.
In April 2015, Hungary's Association of Health Technology Suppliers and Medical Device Manufacturers (ETOSZ) and the Association of Medical Device Manufacturers (OSZ) called a crisis meeting to discuss hospital debt issues. The associations claimed that hospitals owed, with interest, more than HUF90bn (USD322mn) to their member companies at the end of March 2015, while the government had announced to allocate only HUF60bn (USD215mn) to service the debt.
BMI Economic View
Hungary's budget deficit will remain comfortably under 3.0% of GDP in the years ahead. Public debt will remain elevated by emerging market standards, but broad improvements in Hungary's sovereign risk profile and growth outlook imply that a return to investment grade status is imminent.
BMI Political View
Hungary's new anti-immigration measures will see the ruling Fidesz party recover political ground lost to far-right Jobbik, emphasising the shift rightward in the political centre ground in recent years. The decision to build a fence on the Serbian border will bring some international criticism but will be of little concern to the government in Budapest seeking to establish a legacy and maintain domestic support.