BMI View: A positive economic outlook and strong pharmacy sales data for Poland in the first quarter of the year reaffirms our outlook for a pickup in pharmaceutical sales growth in 2015. With the National Health Fund expanding its reimbursement expenditure and Polish consumer confidence rising, we see Poland's pharmaceutical market as being one of the most promising within the Central and Eastern Europe region.
Headline Expenditure Projections
Pharmaceuticals: PLN32.04bn (USD10.15bn) in 2014 to PLN33.39bn (USD8.91bn) in 2015; +4.2% in local currency terms and -12.2% in US dollar terms. Forecast unchanged from last quarter.
Healthcare: PLN111.52bn (USD35.35bn) in 2014 to PLN115.73bn (USD30.90bn) in 2015; +3.8% in local currency terms and -12.6% in US dollar terms. Forecast in line with last quarter .
Poland's Q415 RRI score of 61.5 out of 100 remains unchanged from last quarter. The Country is ranked the 2nd the most attractive pharmaceutical market in Central and Eastern Europe, just behind the Czech Republic (63.2).
Key Trends And Developments
US-based Epirus Biopharmaceuticals and Polish generics firm Polpharma have entered a commercialisation deal for several biosimilar products. Polpharma has recently secured a EUR45mn (USD49mn) loan from the European Investment Bank in a bid to support biosimilar development and improve access to medicines across Europe. Under the deal, Polpharma will spend nearly USD30mn on clinical development costs and costs associated with the launch of biosimilar products in selected countries in the EU, the Middle-East, CIS, Russia and Turkey.
The Polish government approved the Public Health Act during a cabinet meeting on July 7, reports PMR. The legislation, which was prepared by the health ministry, will now be submitted to the lower house of the Polish parliament, Sejm. The ministry expects the legislation to be presented before the end of the parliament, which is in the autumn, and come into effect on January 1 2016. The new act seeks to coordinate and improve central and local government efforts in the field of public health, and establishes the National Health Programme (NPZ) as the basis for public health initiatives in Poland.
The Health Ministry revealed a proposal for the distribution of the PLN603mn (USD146mn) increase in the 2016 drug reimbursement budget that the National Health Fund (NFZ) is projecting in its financial plan. The majority PLN338mn (USD82mn) is to be spent on the reimbursement of medicines, foods for particular nutritional uses and medical devices available upon prescription in the pharmacy channel. Crucially, PLN238mn (USD58mn) is expected to go towards new medicines that are not currently reimbursed and which have no reimbursed equivalents in a given indication. Finally, the ministry proposed that the remaining PLN27mn (USD6.5mn) be allocated to cover an anticipated increase in reimbursement costs in selected limit groups caused by changes in Summaries of Product Characteristics or in clinical practice.
Pharmacy sales in Q115 grew by 7.9% year-on-year (y-o-y) in local currency terms to PLN 7.67bn (USD2.10bn), driven by prescription drug sales growth (10% y-o-y). Reimbursed medicines showed particularly strong growth as the National Health Fund (NFZ) loosened reimbursement expenditure. Indeed, in Q115, NFZ data shows that the fund spent a total of PLN2.63bn (USD720mn) on drug reimbursement; a rise of 9.2% compared to Q114.
BMI Economic View: We have upgraded our real GDP growth forecasts for Poland. Domestic demand is improving rapidly, underpinned by an improving labour market, low interest rates and robust real wage growth.
BMI Political View : Poland's opposition Law and Justice party leader Piotr Glinkski backed a special tax on foreign-owned banks and retail chains. The announcement confirms our earlier warnings that the upcoming election poses a threat to investors as we regard Law and Justice as more likely to implement populist policies.