2013-12-08 18:00:23 - Recently published research from Business Monitor International, "Romania Pharmaceuticals & Healthcare Report Q1 2014", is now available at Fast Market Research
We forecast sluggish growth in Romania's pharmaceutical market over the short term due to greater private contributions to the cost of healthcare and stubbornly high unemployment levels. This is moderating health insurance revenues for the state insurer. The partial removal of elements of the clawback tax will undoubtedly provide the industry with a slight boost this year, as will pressure from creditors to repay debts and companies on time. However, the delaying of changes to the reimbursement list to January 2014 and a low ceiling for pharmaceutical expenditure will moderate pharmaceutical growth of patented and prescription medicines in 2014. These issues continue to weigh down BMI's assessment of Romania's Pharmaceutical and Healthcare Risk/Reward Ratings into Q114. www.fastmr.com/prod/752060_romania_pharmaceuticals_healthcare_re ..
Full Report Details at
Headline Expenditure Projections
* Pharmaceuticals: RON13.55bn (US$3.91bn) in 2012 to RON13.96bn (US$4.20bn) in 2013; +3.0% in local currency terms and +7.5% in US dollar terms. US dollar forecast down from Q413 due to leu appreciation.
* Healthcare: RON34.02bn (US$9.81bn) in 2012 to RON36.36bn (US$10.94bn) in 2013; +6.9% in local currency terms and +11.5% in US dollar terms. Forecast changed from Q413 due to appreciation in leu.
Romania has a RRR score of 55.0 out of 100, making it the eighth-most attractive pharmaceutical market in the Central and Eastern Europe region. Romania's RRR score has fallen from Q413 due to a worsening outlook for 2013 pharmaceutical sales. Although over the long term Romania promises a positive growth story, punitive taxes, pricing controls and a lack of funding by the state for reimbursing patients will moderate the market's attractiveness to drugmakers.
Key Trends And Development
* In January 2014, the reimbursement list will finally be updated, although we believe generic drugs will primarily see inclusion on the new list at the expense of patented medicines.
* Having secured IMF funding, as part of its credit deal, Romania will have to pay off its debts to drugmakers and suppliers to its healthcare system. The IMF is also pushing for Romania to increase its tax base, reform its healthcare system and increase its healthcare expenditure to meet its demographic changes.
* In February 2013 the Romanian Constitutional Court ruled that part of the claw-back tax was unconstitutional. The calculation method for determining the amount the industry had to pay the Romanian government used the post-VAT price of medicines, thereby inflating the amount due back to the government. The court ruled that drugmakers had been unfairly double-taxed by the provision. BMI Economic View: We forecast real GDP in Romania to expand by an above-consensus 2.4% in 2013 and 2.8% in 2014, driven by robust exports and a moderate recovery in private consumption through H213.
We also remain reasonably bullish towards the country's long-term growth prospects, on the back of competitive labour costs and the potential gains offered by the country's low base-level of development, although we caution that more significant growth will be restricted by weak fixed investment spending over the near term.
BMI Political View: Romania's Deputy Prime Minister Liviu Dragnea has been charged with abuse of influence during last year's referendum attempting to impeach President Traian Basescu, the country's anti-corruption prosecutors have revealed. Dragnea is alleged to have used his influence as head of Teleorman county in southern Romania to increase turnout in an attempt to validate the vote. Dragnea has called the allegations 'absurd and groundless' and Prime Minister Victor Ponta has pledged not to remove the minister. Nevertheless, the case is likely to draw attention to the country's poor corruption record, which could weigh modestly on investor sentiment going forward.
About Business Monitor International
Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
For more information about these or related research reports, please visit our website at www.fastmr.com
or call us at 1.800.844.8156.