Feb 01, 2010
By Pharmaceutical Technology Editors
Volume 22, Issue 2

Generics dominate Central and Eastern European pharma

Generics will dominate the pharma market in Central and Eastern Europe until 2011, according to a report from PMR Publications (Poland).

Generic and innovative drugs market in Central and Eastern Europe 2009, states that generics were worth €17.2billion in Central and Eastern Europe in 2008, giving them an approximate market share of 58%. Between 2009 and 2011, their value is expected to increase by as much as 14%. In contrast, the market for innovative drugs in 2008 was worth only €12.4 billion and future growth is expected to be slow for the coming years because of cost containment policies in Central and Eastern European countries, which are becoming more demanding as the global financial crisis continues.

The slow growth of innovative medicines and the reign of generics can be attributed to the fact that the majority of players in the region are generic drug manufacturers. The larger players, such as Gedeon Richter (Hungary) and Zentiva (Czech Republic), have a wellestablished presence in most Central and Eastern European countries and the region also represents the main area of their activities.

A number of international generic players are also very active in the region, particularly in Russia. Russia is one of Indiabased Dr Reddy's key markets, as well as an important market for Stada (Germany), which has recently acquired Russian companies Nizhpharm and Makiz-Pharma. Actavis (Iceland) also has a strong presence in Russia, as well as in Bulgaria, while Ranbaxy's (India) key markets include Romania and the Commonwealth of Independent States countries.

Consolidation within the pharma industry has also given more generic manufacturers a foothold in the region. Teva (Israel) now has a strong presence in the region after acquiring Barr in July 2008, which includes Pliva (Croatia) – one of the largest local generic drug producers. Also in 2008, US generic manufacturer Mylan acquired the Central and Eastern European generics businesses of Merck KGaA (Germany), which includes operations across the region. More recently, in 2009, sanofi aventis acquired Zentiva, a leading generic business for the region, and Novartis has acquired EBEWE Pharma's (Austria) generic cancer drug production unit.

Although the region is home to many representative offices of multinational companies, it is not, in most cases, considered their main market. Many of them do, however, choose to conduct clinical trials locally because of the low costs, high population and limited access to innovative therapies in the region.

Although growth for innovative medicines will be slow for the time being, PMR does expect to see some improvement in the medium-term. Improvements in the region's health awareness and the modernisation of healthcare systems, including the development of private health insurance and the establishment of health insurance and drug reimbursement systems, are expected to drive the market for innovative drugs. The ageing population of the region may also exert some influence over the market as the demand for medicines increases. As a result, sales of innovative drugs are expected to increase steadily in the coming years.

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