BMI View: We expect growth in pharmaceutical sales in 2015 to be primarily driven by Romania's improving macroeconomic outlook and a positive consumer story. We note that local regulatory factors such as revenue taxes will continue to present obstacles to growth. Rising clawback taxes and continued price cuts will be negative for the prescription drugs, hurting Romania's attractiveness to multinational drugmakers.
Headline Expenditure Projections
Pharmaceuticals: RON14.17bn (USD4.28bn) in 2014 to RON14.75bn (USD3.62bn) in 2015; +4.1% in local currency terms and -15.3% in US dollar terms.
Healthcare: RON34.69bn (USD10.47bn) in 2014 to RON36.38bn (USD8.93bn) in 2015; +4.9% in local currency terms and -14.7% in US dollar terms.
Romania has a BMI Risk & Reward Index (RRI) score of 56.2 out of 100, making it the fourth-most attractive pharmaceutical market in the Central and Eastern Europe (CEE) region. Romania has risen two places on our RRI since Q215, but this has been primarily due to a deterioration in the outlook for other closely-ranked CEE countries than due to a significant improvement for the pharmaceutical sector in Romania.
Key Trends And Developments
In April 2015, Romania's National Agency for Medicines and Medical Devices President Marius Savu announced that prices of over 1,000 prescription medicines could be cut by 20% following an update of prices in the National Catalogue of Medicines. The new national catalogue, which is currently under public debate, could be effective from June 2015. About 40 new innovative drugs would be added to the updated catalogue. Further, the new list will update foreign exchange rate used for calculating drug prices.
In March 2015, the US industry body Pharmaceutical Research and Manufacturers Association of America released its Special 301 Report on global concerns, highlighting the chronic underfunding of the healthcare system, barriers to market access, pharmaceutical pricing and government reimbursement policies in Romania. This report is part of a submission that the industry association makes to the office of the US Trade Representative.
In March 2015, at a vaccine conference organised by the Romanian Society for Microbiology, the head of the Romanian WHO office Victor Olszavsky stated that Romania's vaccine coverage for certain diseases had declined over the past decade from 95% of the population, to just under 90%, in 2014. In some rural regions, vaccination coverage had declined to below 70% as Romania's crumbling and chronically underfunded healthcare system failed to deliver services to the population.
In January, a delegation led by Romania's Health Minister Nicolae Banicioiu stated that the country would collaborate with Indian pharmaceutical firms for the research and development of new medicines, and to acquire licences to sell India-manufactured drugs in Europe. Romania's state-owned drug producer Antibiotice Iasi will work together with Cipla Pharma for the development of cancer drugs, Aurobindo Pharma is to develop anti-viral medicines and Macleods Pharma those to treat tuberculosis. The collaborations will also see Romania's national drug agency inspecting Indian drug companies.
BMI Economic View
Romania's economy will outperform most of Emerging Europe in 2015, with private consumption and government spending set to play the main role driving real GDP growth.
BMI Political View
Romania's anti-corruption drive will boost the country's appeal to investors and the country's long-term growth potential. Although gains will take years to fully realise, we expect the drive will maintain momentum assignificant political gains are at stake.