Brussels, 23 Feb 2005
The pharmaceutical and biotechnology industries in the 'new' EU countries are growing rapidly and present considerable potential, is the verdict of a new report.
The report by Frost & Sullivan shows that while the pharmaceutical market in the former EU15 has been growing at eight per cent annually, in the enlarged EU, growth has been at the rate of 16.5 per cent over the past five years. Although recognising that this offers 'exciting growth opportunities to pharmaceutical and biotechnology companies', the report warns that parallel imports remain a problem.
The EU healthcare industry is the second largest after the US. Estimated at some 5.3 billion euro, the pharmaceutical market in 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 respectively of the accession countries' total pharmaceutical market value, have been growing by almost 20 per cent since 1998, according to the report. As the new EU countries are expected to make considerable, long-term investments to achieve sustainable changes to their healthcare systems and match EU regulatory standards, so growth prospects in the region are expected to become significant.
'Propelled by the twin advantages of low costs and easy patient recruitment, the 'new' EU also offers tremendous scope for conducting clinical trials. Already, large multi-national pharmaceutical and biotechnology companies from Western Europe and from the United States are carrying out clinical trials on rare diseases and diseases relevant to large worldwide markets,' notes the Frost & Sullivan report.
'Coordination 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. An additional advantage has been the availability of highly qualified investigators with lower pay scales than their western counterparts,' the report continues.
Furthermore, states the report, with hourly wages in Eastern European countries gauged at a quarter of those in western countries, pharmaceutical companies have been able to avoid their single most important cost: the cost of a delay in getting a drug to the market. This is especially significant as delays often work out to a daily loss of 750,000 euro.
Asked to identify the potential growth segments in the new EU markets, one of the report's authors, Dr Raju Adhikari stated: 'Mirroring the changing disease burden of the west, the anti-infectives market share has declined, whereas cardiovascular, central nervous system (CNS) and metabolic disease categories have taken over. Huge growth opportunities in asthma and oncology also exist and companies with products in these diverse areas are likely to be more successful in the 'new' EU markets.'
However, states the report, even as the new EU countries offer exciting prospects for biopharmaceutical and biotechnology companies, parallel trade is expected to remain the key concern. Currently, parallel trade is estimated at 2.8 billion euro and is projected to last for a minimum of another five years. This practice is expected to decrease when price differences narrow sufficiently within the EU25.