In contrast to subdued growth in the pharmaceutical markets of the former 15-state European Union (EU), pharmaceutical markets in the anew’ EU accession markets are expanding vibrantly.
In contrast to subdued growth in the pharmaceutical markets of the former 15-state European Union (EU), pharmaceutical markets in the anew’ EU accession markets are expanding vibrantly.
While the former has been increasing at eight per cent annually, the latter has been growing at the rate of 16.5 per cent over the past five years, offering growth opportunities to pharmaceutical and biotechnology companies.
Globally, the EU healthcare industry is the second largest after North America. Estimated at nearly US$ 7.0 billion, the pharmaceutical market in the anew’ EU countries’ Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia represents about eight per cent of the EU 15 market.
Both Poland and Hungary, which contribute 45 per cent and 23 per cent of the accession countries’ total pharmaceutical market value respectively, have been growing by almost 20 per cent since 1998. With new EU countries expected to make significant, long-term investments in order to achieve sustainable systematic changes to their healthcare systems and match EU regulatory standards, growth prospects in the region are expected to be considerable.
Propelled by the twin advantages of low costs and easy patient recruitment, the new EU also offers tremendous scope for conducting clinical trials.
Co-ordination and swift completion of clinical trials in the new EU have been facilitated by easily accessible, large and relatively under medicated patient populations as well as more structured healthcare systems.
However, says Frost & Sullivan, even as the new EU countries offer exciting prospects for biopharmaceutical and biotechnology companies, parallel trade is expected to remain the key concern. Typically, parallel trade activity occurs in inverse proportion to drug prices with the EU encouraging parallel importers in the belief that parallel trade promotes competition, thereby lowering prices.
With new EU countries having lower average drug prices than Europe’s western markets, parallel imports principally follow an east-west channel (with south-north channel to a lesser extent). The east-west parallel trade axis originates from the Czech Republic, Hungary and Poland whose domestic producers meet EU standards and criteria.
Parallel trade is currently estimated at US$ 3.8 billion and is projected to last for a minimum of another five years. Several international drug companies have attempted to tackle parallel trade by applying restrictions to wholesalers, seeking to prevent export using legal loopholes, or removing or reducing the ex-manufacture price differentials of their products across the various EU states.
biotech.frost.com
