BMI View: Hungary's pharmaceuticals and healthcare market will remain a limited prospect for investment due to the systemic underfunding of the healthcare sector. While improvements to healthcare provision and accessibility are likely to increase demand for medicines, the country's revenue earning opportunities remain modest in comparison to neighbouring markets.
Headline Expenditure Projections
Pharmaceuticals: HUF660.8bn (USD2.4bn) in 2015 to HUF667.6bn (USD2.3bn) in 2016; +1.0% in local currency terms and -2.3% in US dollar terms. Forecast in local currency terms revised slightly downwards from last quarter.
Healthcare: HUF2.5trn (USD9.0bn) in 2015 to HUF2.6trn (USD9.1bn) in 2016; +5.0% in local currency terms and 1.6% in US dollar terms. Forecast revised upwards from last quarter.
|f = BMI forecast. Source: WHO, National Sources, BMI|
|Pharmaceutical sales, USDbn||2.780||2.370||2.310||2.450||2.690||2.940||3.040|
|Pharmaceutical sales, % of GDP||2.01||1.96||1.95||1.89||1.84||1.79||1.76|
|Pharmaceutical sales, % of health expenditure||27.2||26.4||25.4||24.6||24.1||23.6||23.3|
|Health spending, USDbn||10.230||8.960||9.100||9.980||11.180||12.440||13.040|
Hungary currently ranks fourth (down from the third position in the previous quarter) out of the 20 regional markets profiled in the Central and Eastern Europe (CEE) region, with a score of 57.9. 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.
In March 2016, Gedeon Richter announced an investment of HUF15bn (USD5.4mn) in a project to expand its biotechnology plant in Debrecen. The plant was founded in 2012 and the expansion will allow for the firm to manufacture biosimilars with the first in-house developed products expected to be launched during 2017.
As announced in May 2016, the Hungarian government plans to introduce a so-called chancellor system in the public healthcare sector by the end of 2016, which would allow for an improvement in state oversight of health institutions' finances. According to plans, the government would appoint chancellors to oversee how healthcare institutions manage their cash flows and optimize spending.
In May 2016, the Central Statistical Office said in its annual report that the average Hungarian household spent 4.9% of their income, or HUF44,771 (EUR143) per person, on healthcare services and drugs in 2014. However, this varied significantly across different income levels.
BMI Economic View
The Hungarian government's expansive fiscal policy plans for 2017 are a significant reversal from previous pledges, and may put an investment grade upgrade this year out of reach. Fiscal loosening only reinforces our relatively hawkish inflation and interest rate forecasts for 2017.
BMI Political View
While a former member of the ruling Fidesz party has been implicated in the Panama papers scandal, we do not believe this will have a tangibly negative impact on Fidesz' high level of public support. The party's strong stance on immigration will continue to be a key factor underpinning the government's popularity, and with the Brussels attacks in Marc boosting further anti-migration fears across the EU, we believe the Fidesz party will remain the most popular party in Hungary for the duration of its term in power.
The Hungary Pharmaceuticals & Healthcare Report features BMI Research's forecasts for drugs and healthcare expenditure and imports and exports, focusing on the growth outlook for the prescription, OTC, patented drugs and generics market segments.
BMI's Hungary Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the Hungary pharmaceutical and healthcare industry.
- Benchmark BMI's pharmaceutical and healthcare market forecasts for Hungary, to test other views - a key input for successful budgeting and strategic business planning in the Hungarian pharmaceutical and healthcare market.
- Target business opportunities and risks in the Hungarian pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Hungary.
- Assess the activities, strategy and market position of your competitors using our company profiles (including SWOTs, KPIs and latest activity) and competitive landscape tables.
BMI Industry View
An at-a-glance perspective on the latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The pharmaceuticals and healthcare SWOT outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.
BMI Industry Forecast Scenario
Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Healthcare: Total healthcare expenditure (USDbn), healthcare expenditure (% of GDP), healthcare expenditure per capita (USD), hospital beds, doctors, and birth & mortality rates (all per ‘000 population).
- Pharmaceutical Market: Drug expenditure in USDbn, % of GDP and per capita (USD).
- Patented Drug Market: Prescription drug sales (USDbn & % of total sales).
- Generic Drug Market: Generic product sales (USDbn), generic sales (% of total sales).
- OTC Drug Market: OTC sales (USDbn & % of total sales).
- Macroeconomic Forecasts: Nominal and real GDP, % real GDP growth, % private consumption growth, % industrial output growth, % consumer price index, % GDP price deflator, exports, imports, trade balance, current account balance, foreign direct investment, exchange rate against USD, government expenditure and external debt.
BMI’s Pharmaceuticals and Healthcare Risk Reward Index
BMI’s Risk Reward Index provides investors (both national and multinational) looking for opportunities in the region with a clear country-comparative assessment of the market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
A snapshot of key market characteristics, including total size of the pharmaceuticals and healthcare segments, growth drivers, leading therapeutic areas and the competitive landscape
A focus on government healthcare reforms, epidemiological trends, mergers and acquisitions, product launches, market entries, FDI activity, R&D, biotechnology, clinical trials and supply chain issues.
Details of the industry regulatory framework and key legislation covering the licensing of new products/services, pricing and reimbursements, intellectual property, taxation and advertising, as well as analysis of the overall regulatory burden.
The competitive landscape section provides comparative company analyses and index by USD sales and % share of total sales – for the total pharmaceutical sector, as well as the OTC, generics and distribution sub-sectors.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.