BMI's Executive Summary

[TOP]

Hungary's parliament has passed the controversial health reform bill in December 2007, which will allow private business into the health insurance market for the first time. Protests from tens of thousands of workers, teachers and health employees ultimately went unheeded, as the parliament voted 204-168 in favour of the bill.

The laws will see 22 new health funds set up nationwide. Private investors will be allowed to purchase up to 49% of the shares in these entities. The minimum prices of shares in the new funds will be HUF12,000 (US$67.92) , with a total of HUF120bn (US$679.18mn) being raised for the state. In order to prevent monopolies forming the funds will be capped at a maximum of 1.5mn members, while profits will be restricted. In order to ensure equitable access, the funds will also be prohibited from members.

The reforms have been so controversial that there were fears that the ruling coalition of the Socialists and the Alliance of Free Democrats would split. These seem to have been allayed for the time being, although members of the Socialists are still thought to be unhappy about involving the private sector in the health sector, amid concerns that it will impact vulnerable groups such as the elderly, however, they concede that reform is necessary in order to reduce Hungary's budget deficit.

BMI has considered the country's health reforms when calculating its forecasts for the Hungarian pharmaceutical market. We expect drug sales to grow moderately reaching a total of US$3.46bn, with the private sector providing much of the impetus for expansion. However, we are unsure how long-lasting the new initiatives will be considering that the opposition Fidesz Party, which fiercely opposes the measures, are heavy favourites to win the next election in 2010.

Elsewhere, Hungarian drugmakers are continuing to experience difficulties due to price cuts on the domestic market. Partly with this in mind many are choosing to intensify their efforts on foreign markets with Gideon Richter acquiring Romanian pharmacy operator Pharmapharm. In BMI's all new Business Environment Rankings, Hungary is placed 4th out of the 15 Central & Eastern European markets surveyed. The new rating criteria has cemented the country's strong position due to a stronger emphasis on the larger pharmaceutical markets. Hungary despite its small overall size, has a high per-capita spend on drugs relative to its regional peers.

Contents

[TOP]

Chapter 1 - Executive Summary

Hungary Pharmaceuticals & Healthcare Industry SWOT

Hungary Political SWOT

Hungary Economic SWOT

Hungary Business Environment SWOT

Chapter 2 - Business Environment Rankings

Central & Eastern European Region

Table: Central & Eastern Europe Pharmaceuticals Business Environment Ranking

Business Environment Ranking

Economics - Long-Term Risk

Politics - Long-Term Risk

Regulatory Barriers

Domestic Sector Threat

Market Growth Potential

Market Size Ranking

Chapter 3 - Market Overview

Table: Leading Pharmaceutical Companies By Ownership

Chapter 4 - Regulatory Regime

Healthcare Reforms

Intellectual Property Regime

Pricing & Reimbursement Issues

Epidemiological Trends

Biotechnology Sector

Table: Hungarian Biotechnology At A Glance (FY05)

CRO Sector

Chapter 5 - Industry Forecast Scenario

Overall Market Forecast

Table: Drug Market Indicator Forecasts 2005-2011

Key Growth Factors - Industry

Table: Health Expenditure Indicator Forecasts 2005-2011

Key Growth Factors - Macroeconomic

Table: Nominal And Real GDP

OTC Market Forecast

Table: OTC Market Indicator Forecasts 2005-2011

Prescription Market Forecast

Table: Prescription Drug Market Forecasts 2005-2011

Generics & Branded Markets Forecast

Table: Generics And Branded Market Indicator Forecasts 2005-2011

Export/Import Forecasts

Table: Import/Export Market Forecasts 2005-2011

Key Risks To BMI's Forecast Scenario

Chapter 6 - Competitive Landscape

Company Monitor

Egis Pharmaceuticals (Servier)

Eli Lilly

Gedeon Richter

Krka

Chapter 7 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Technical Process

Pharmaceuticals Industry

Sources

Competitive Landscape for Europe Pharmaceuticals and Healthcare: Sample of Companies Ranked

[TOP]

Cross-border analysis of regulatory systems comparing the patenting environment, summarising regional pricing and reimbursement factors and monitoring the growth of the Pharmaceuticals sector across the region. Company SWOTs cover leading multinational and national drug companies operating in each market.

Network of European Pharmaceutical & Healthcare Sources

[TOP]

BMI's Pharmaceuticals & Healthcare Reports are based on an extensive network of multilateral organisations, government departments, pharmaceutical & healthcare industry associations, chambers of commerce and company reports. Information sources include: