Forecasts valuing the potential of the Polish drug market have been lowered, according to a report from Research and Markets quoting Business Monitor International data, which says the value of the market at the end of 2006 is now expected to be US$4.9bn, a 5% year-on-year increase, but down on the previously predicted US$5bn-plus.
State-imposed cost-containment measures, such as caps on profit margins and price controls, are the key reasons for this lower projection, while the report also claims patient awareness of lower-priced generic equivalents is negatively impacting total sales. By 2010, the value of the pharmaceutical market is forecast to reach US$5.9bn.
The cooling down of this much-touted market has resulted in a number of drug companies that had previously pledged to invest in Poland failing to follow through with their plans, leading to concerns about the future of the local industry, and particularly its export capabilities. For example, UK firm GlaxoSmithKline revealed early last year that it would construct US$17.8m worth of plant and laboratory in the city of Poznan´, but it is yet to break ground because of the current unsatisfactory investment climate.
Last October, to the dismay of drugmakers, the Polish Ministry of Health negotiated a reduction in the prices of 270 medicinal products that are used in public hospitals, to further lower expenditure on healthcare. The prices are now 10% less than the market rates and 6% lower than the prices agreed with pharmaceutical companies last year.
The previous month, Poland’s Customs Chamber revealed that July 2006 exports of pharmaceuticals had nosedived 17% year on year. The total value of medicines manufactured in Poland for foreign markets was US$33m, significantly less than the US$40m exported in the same month in 2005. No explicit explanation was given for the decline, but BMI thinks that central and eastern European drugmakers are increasingly leveraging their low cost bases to undercut Polish pharmaceutical companies.
However, there are positive signs ahead. Poland’s Office for the Registration of Medicines, Medical Devices and Biocides is ramping up its efforts to bring the country’s drug registration process up to European standards by the end of 2008, though BMI believes the agency will experience difficulties in recruiting high-calibre staff due to the ongoing ‘brain drain’.
Finally, Poland is also reportedly taking steps to kickstart its nascent biotechnology sector. Compared to the rest of the European Union and the USA, Poland’s biotech sector is very underdeveloped, but it is growing, and the Polish Academy of Sciences has outlined a plan to develop it further. The BMI/Research and Markets report concludes that to achieve this, the country should invest in science parks, build platforms for closer co-operation between industry and academia, exploit EU funding to a greater extent and develop goals in the field of high technology for the various regions in Poland.