BMI's Executive Summary

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Romania has benefited from the recent membership of the European Union (EU) in terms of both a rise of foreign direct investment (FDI) ahead of EU accession as well as its increased attractiveness in the longer term. Given the improved operating environment for foreign firms, the share of locally made generics is likely to decrease to around 35% by the end of the forecast period, from the current 38%. However, their quality will be improved by compliance with EU legislation and foreign direction, which will allow for a rise in exports.

Overall, the Romanian pharmaceutical market is expected to record strong annual growth over the coming five years. By the end of forecast period, pharmaceutical expenditure at consumer prices is predicted to top US$3.2bn, up from an estimated US$2.16bn in 2007. Patented medicines will reap the benefits of an improvement in regulatory and intellectual property (IP) environments. In the meantime, the need to deal with accumulated hospital debts will prompt the government to shift more costs onto the consumer, which will in the longer term result in the development of an over-the-counter (OTC) market from its currently low base.

In BMI's adjusted Business Environment Rankings for Central & Eastern Europe (CEE) for Q108, Romania is placed firmly in the middle of the table, below Bulgaria, the other EU entrant in 2007, but above some of the more established regional markets, such as Poland and Slovenia. While disadvantaged by certain deficiencies of its intellectual property (IP) protection regime, Romania's wider operating environment offers considerable opportunities for foreign players. International presence is increasingly evident, with domestic sector threat consequently decreasing. In addition, the recent EU membership has pushed Romanian to improve its political and economic risk, in the face of strong competition from more developed local markets.

Imported drugs have increased market share in from 45% in the mid-1990s to between 70% and 75% at present in value terms, despite accounting for only a fifth of the sales by volume. However, a marked increase in foreign ownership will somewhat shift the balance back into the hands of local production, some of which is targeting exports. To this end, local subsidiaries of Icelandic Actavis and Czech Zentiva are planning substantial sales and investment increase over the coming years. In the meantime, the pending privatisation of Antibiotice continues to receive much attention from a number of prominent European and overseas companies.

Contents

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Chapter 1 - Executive Summary

Romania Pharmaceuticals & Healthcare Industry SWOT

Romania Political SWOT

Romania Economic SWOT

Romania Business Environment SWOT

Chapter 2 - Business Environment Rankings

Central & Eastern Europe 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 Summary

Chapter 4 - Regulatory Regime

Recent Regulatory Developments

Intellectual Property Issues

IP Deficiencies

Pricing and Reimbursement

Pricing and Reimbursement Developments

EU Accession

Chapter 5 - Industry Developments

Epidemiology

Table: HIV Prevalence in Romania

Healthcare Sector Developments

Healthcare Sector Funding Crisis

Pharmaceutical Industry

Manufacturing

Table: Ownership of Local Companies

Wholesale Sector

Retail Sector

Table: Pharmacies & Pharmacy Market Ratios

Domestic Industry Developments

Table: Sindan Q206 Product Launches

Foreign Industry Developments

Chapter 6 - Industry Forecast Scenario

Overall Market Forecast

Table: Drug Market Indicators

Key Growth Factors - Industry

Table: Health Expenditure Indicators

Key Growth Factors - Macroeconomic

Table: GDP Output & Population

Prescription Market Forecast

Table: Prescription Drug Market Indicators

OTC Market Forecast

Table: OTC Market Indicators

Generics and Branded 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 7 - Competitive Landscape

Chapter 8 - Company Monitor

Foreign Companies

GlaxoSmithKline (Europharm)

Sanofi-Aventis

Novartis

Pfizer

Merck & Co

Roche

Krka

Lek

Indigenous Companies

Antibiotice Iasi

Terapia-Ranbaxy

Zentiva (incorporating Sicomed)

Sindan

LaborMed Pharma

Chapter 9 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Technical Process

Pharmaceutical Industry

Sources

Chapter 10 - Appendix: Regional Demographic Data

Wages (ave labour force per annum), US$ PPP

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Chapter 11 - Country Snapshot: Romania Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

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: