BMI's Executive Summary

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The rapid growth experienced in PolandÂ's drug market in recent years is beginning to slow with BMI estimating that expansion has slipped under 5% in 2007 and forecasting the same for 2008. By 2012, this figure should be below 4%, with BMI believing that the primary reason for the tapering in growth has been the government's policy of stocking the reimbursement list with low-cost generic drugs. As a result of this, however, we believe that the generic market share will increase from 39.2% to 45%, while the size of the sector in value terms will reach US$2.86bn. This will have a negative impact on the patented drug sector, with sales of these products – predominately sourced overseas – stagnating over the forecast period, hampered by the governmentÂ's preference for locally produced drugs.

In terms of company activity, the last quarter was a busy one for insurer Polska Grupa Farmaceutyczna (PGF). The firm acquired Lithuanian distributor Limedika and pharmacy chain Gintarine Vaistin, PGF is Poland's largest distributor, recording sales of PLN4.0bn (US$1.33bn) in 2006. In addition to the Lithuanian firms, PGF has made a number of moves in its home market. This has included the US$9.7mn purchase of distributor Apexim , while Apteki Polskie , one of the largest pharmacy chains, was bought by PGF from local venture capital group Enterprise Investments.

Meanwhile, the Civic Platform (PO) party, led by Donald Tusk, has scored a decisive electoral victory, which could have some upside for drugmakers, especially those operating on foreign markets. The EU, Russia and Germany anticipate a period of co-operation after the divisive approach of the previous Prime Minister Jaroslaw Kaczynski. Indeed, Tusk has pledged to improve foreign relations. EU officials believe Poland will move swiftly to ratify the EU treaty and adopt the euro. Russia is optimistic that relations with Poland can normalise and become more pragmatic. The PO is likely to continue the reform of PolandÂ's health services with an emphasis on liberalisation and the private sector. Until more definite plans are announced, however, BMI will be maintaining its forecast of solid growth for health expenditure, but with a declining role for the state sector.

In BMIÂ's all new Business Environment Rankings, Poland is placed 9th out of the 15 Central & Eastern European markets surveyed. The new rating criteria has resulted in a fall in the countryÂ's position due to a stronger emphasis on the regulatory environment, which we see as a major factor affecting the business environment for drugmakers

Contents

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Chapter 1 - Executive Summary

Poland Pharmaceuticals Industry SWOT

Poland Political SWOT

Poland Economic SWOT

Poland Business Environment SWOT

Chapter 2 - Poland: Business Environment Rankings

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

Chapter 3 - Market Summary

Chapter 4 - Regulatory Regime

Table: Upgrading Medicine Dossiers

Intellectual Property Developments

Pricing & Reimbursement Issues

Chapter 5 - Industry Forecast Scenario

Overall Market Forecast

Table: Drug Market Indicators

Key Growth Factors - Industry

Table: Health Expenditure Indicators

Key Growth Factors - Macroeconomic

Table: GDP

OTC Market Forecast

Table: OTC Market Indicators

Prescription Market Forecast

Table: Prescription Drug Market Indicators

Generics Market Forecast

Table: Generics and Branded Market Indicators

Export/Import Forecasts

Table: Sectoral Trade Indicators

Other Healthcare Data Forecasts

Table: Socio-Demographic Indicators

Key Risks To BMI's Forecast Scenario

Chapter 6 - Competitive Landscape

Biotechnology Sector

Manufacturing Sector

Table: Polfa Warszawa's Leading Prescription Products

Wholesale Sector

Retail Sector

Table: Pharmacies & Pharmacy Market Ratios

Chapter 7 - Company Monitor

GlaxoSmithKline

Eli Lilly

Gedeon Richter

Krka

Lek (Novartis/Sandoz)

Pliva

Polpharma

Chapter 8 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Technical Process

Pharmaceutical Industry

Sources

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

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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

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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: