BMI View: Hungary's attractiveness to multinational drugmakers will be impeded by onerous regulatory burden, pricing pressures and punitive taxes on pharmaceutical companies. Combined, these factors will impede growth in phar maceutical sales over the short- term. 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 .
Headline Expenditure Projections
Pharmaceuticals: HUF618.0bn (USD2.66bn) in 2014 to HUF624.09bn (USD2.30bn) in 2015; +1.0% in local currency terms and -13.2% in US dollar terms.
Healthcare: HUF2,366.20bn (USD10.17bn) in 2014 to HUF2,411.07bn (USD8.90bn) in 2015; +1.9% in local currency terms and -12.4% in US dollar terms.
Our proprietary Risk/Reward assessment tool has been gradually adjusted to be increasingly transparent and sensitive in relation to potential Rewards. Therefore, as Hungary's market opportunity has worsened, it has slipped down our regional table. Hungary currently ranks ninth out of the 20 regional markets profiled in the Central and Eastern Europe region, with a score of 51.2. While its Risks profile is generally predictable, Hungary's Rewards score continues to reflect its challenging pharmaceutical market outlook.
Key Trends & Developments
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.
In March 2015, Judit Bidlo, the head of the reimbursement department of the National Health Insurance Fund (OEP), said at a conference organised by Medicalonline.hu, that the bi-annual blind bid competition would be employed for the foreseeable future.
In March 2015, prices of 130 drugs in Hungary were reduced beginning April 1 2015, with the most substantial price cut reserved for Q Pharma's Azithromycin 500 mg film-coated tablets, according to a list published on the website of the Hungarian Chamber of Pharmacists. These changes in prices will mirror the bi-annual blind-bid competitions in which marketing authorisation holders make bids for their products which are reimbursed.
In January 2015, the Hungarian minister for Human Resources stated that the Hungarian government wanted to offer tax advantages to private healthcare providers. The Hungarian state is looking at the private sector to reduce some of the burden on the public healthcare system's finances.
BMI Economic View
We have revised up our Hungarian real GDP growth forecasts for 2015 and 2016 to 2.7% and 2.4% respectively, from 2.2% and 2.3% previously, on the back of better eurozone growth prospects and our expectation for stronger household spending. Nevertheless, this represents a significant slowdown from the 3.6% real GDP growth recorded in 2014, which was driven by public fixed investment that will slow considerably in both 2015 and 2016.
BMI Political View
Hungary's ruling Fidesz party has suffered a series of setbacks in recent months that will necessitate a shift in its policy agenda to stem the rapid loss of its popular support base. The rise of the far-right Jobbik party and fragmented centre-left opposition suggests that any shift is unlikely to be towards a much more centrist or liberal policy stance.