Report from: Romania - Pharmaceutical Technology

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PharmTech Europe

Report from: Romania
The Romanian pharmacetuical market has grown significantly in recent years, but with stagnation on the horizon, a path forward is needed.


Pharmaceutical Technology
Volume 33, Issue 2, pp. 18-25

Other challenges

Aside from regulatory issues, one major challenge facing the Romanian drug producers is fierce competition from multinational companies. Although local firms such as Sicomed–Zentiva Romania, Terapia (the largest independent generic drug player in Romania now owned by India's Ranbaxy Laboratories), and Antibiotice, have achieved a larger global presence, they are constantly battling companies such as GlaxoSmithKline (London) and Pfizer (New York), which have established a strong foothold in the area.

Cost is also a problem. Increasing manufacturing costs, rules against including research and development (R&D) costs in production budgets, and a lack of finances for product development have left local companies with no option but to focus on generic drugs. Even though the generic drug market seems to be more stable in terms of value, real growth is likely to be recorded only for innovator drugs.

Looking forward

Romania has several things going for it such as low-cost production, low drug prices, and a large generics market. These benefits have helped the country to expand its pharmaceutical manufacturing sector and welcome in multinational companies. To avoid stagnation, however, the market still has a long way to go. Local manufacturers may be forced to sign in-licensing deals with multinational companies to keep afoot financially. Others may need to seek investment in R&D as well as partnerships with academia and research institutes in search of new innovator drugs.

In addition, the Romanian government must continue to invest in quality and productivity to become a real competitor within the European Union market, especially as competition from China and India mounts. These investments will also be key for Romanian companies who wish to enter the US market, where regulations and costs are significantly higher.

Sources

1. Ruxandra Ciulu, "Diversification Strategy in the Pharmaceutical Industry," Social Science Research Network, available at http://ssrn.com/abstract–1283129/.

2. PMR, Pharmaceutical Market in Romania 2008: Development Forecasts 2008–2010 (Krakow, Poland), Oct. 2008.

3. Ioana Filipescu for Raiffeisen Investment Romania, "Romanian Pharmaceutical Market," Romanian Business Digest, Sept. 2008.

Campos-Seijo is the editor of Pharmaceutical Technology Europe.


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