BMI View: In line with Romania's economic outperformance in Europe, the country's pharmaceutical and healthcare markets will see strong growth given increased consumer spending power and higher healthcare contributions. However, aggressive drug pricing regulations, including the imminent joint drug procurement agreement with Bulgaria will limit revenue earning opportunities.
Headline Expenditure Projections
Pharmaceuticals: RON14.94bn (USD3.73bn) in 2015 to RON16.55bn (USD4.01bn) in 2016; 10.7% in local currency terms and 7.4% in US dollar terms. Forecast revised upwards from last quarter.
Healthcare: RON37.91bn (USD9.46bn) in 2015 to RON40.08bn (USD9.70bn) in 2016; 5.7% in local currency terms and 2.6% in US dollar terms. Forecast revised upwards from last quarter.
|f = BMI forecast. Source: WHO, National Sources, BMI|
|Pharmaceutical sales, USDbn||4.240||3.730||4.010||4.370||4.750||5.180||5.430|
|Pharmaceutical sales, % of GDP||2.13||2.10||2.28||2.31||2.29||2.26||2.23|
|Pharmaceutical sales, % of health expenditure||38.2||39.4||41.3||41.3||40.7||40.4||40.0|
|Health spending, USDbn||11.090||9.460||9.700||10.590||11.690||12.820||13.570|
In our Q316 Pharmaceutical Risk/Reward Index (RRI), Romania has risen two places to third out of the 20 markets in the Central and Eastern European (CEE) matrix despite a slightly worse score of 58.5 compared with the previous quarter (58.7). Romania scores considerably above the regional average score of 52.2 in Q316. While an improved outlook for growth in the country's pharmaceutical market has led to an increased Industry Reward score (up to 38.9 out of 65, from 37.7), the country's continued presence on PhRMA's Special 301 Report highlights the challenging environment faced by innovative drugmakers in the country. Romania's Risk score has been reduced from 21.0 out of 35 in Q216 to 19.6 in Q316 due to the issues of poor intellectual property protection, clawback taxes and delays in reimbursement mentioned in the 301 Special Report.
In May 2016, the Minister of Health resigned after it had been shown that state funding had been used to purchase overpriced disinfectant that had been diluted to a degree that made it ineffective.
In May 2016, a German pharmaceutical distributor entered exclusive negotiations for the acquisition of Romanian pharmacy and medicine wholesaler Farmexim for an estimated EUR120-150mn (USD134-168mn).
In March 2016, the Association of Generic Drug Producers in Romania called for the formation of a working group to create a new method of calculating drug prices.
BMI Economic View
Romania will be the fastest growing economy in CEE in 2016, and the second fastest in the wider EU behind Ireland. Growth will mainly be driven by household spending, which stands to benefit from public sector wage increases, successive VAT cuts, and improving labour market conditions. Structural bottlenecks will ultimately prevent Romania from converging more quickly with Western EU counterparts, and the country will remain amongst the poorest in the EU for some time to come.
BMI Political View
Trust in politicians will remain low in 2016, as the country's anti-corruption drive accelerates. This will dent potential investment over the short term, while the quality of institutions in the country will be a hindrance to the anti-graft push. Romania's improving anticorruption profile will eventually be accompanied by better institutions and a government less tarnished than the previous Social Democratic Union-led one.
The Romania 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 Romania Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the Romania pharmaceutical and healthcare industry.
- Benchmark BMI's pharmaceutical and healthcare market forecasts for Romania, to test other views - a key input for successful budgeting and strategic business planning in the Romanian pharmaceutical and healthcare market.
- Target business opportunities and risks in the Romanian pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Romania.
- 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.