Report from Hungary - Pharmaceutical Technology

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Report from Hungary
Eastern Europe's pharmaceutical leader, Hungary, is working to maintain its number-one status while also pursuing new avenues, especially in biopharmaceuticals.


Pharmaceutical Technology
Volume 35, Issue 5, pp. 16-18


PHOTO CREDIT, STUART WESTMORLAND/GETTY IMAGES
Analysts have recently downgraded the short- to medium-term outlook of the $3.5-billion pharmaceuticals market in Hungary because of slow domestic economic growth, high unemployment, and, above all, government plans for a 30% cut in state-subsidized drug reimbursements. Prospects for the country as a center for pharmaceutical research and production, however, remain bright.

As Eastern Europe's most advanced pharmaceuticals industry, the Hungarian market has been able to take advantage of relatively high economic growth rates and a strong demand for medicines throughout most of the region, particularly in Russia, which is enjoying the benefits of high oil prices. Hungary began manufacturing drugs more than 100 years ago, and by the time World War II began, the country had created a large drug-manufacturing capacity. During 40 years of Communist rule, leading up to the late 1980s, the country formed a nucleus of pharmaceutical production for the entire Comecon trade bloc in Eastern Europe. (Comecon stood for the Council for Mutual Economic Assistance and existed from 1949 to 1991.)

Hungary's infrastructure and science base has since attracted multinational drug manufacturers, which have been investing heavily in the expansion of the country's production facilities, particularly in the areas of active pharmaceutical ingredients (APIs) and generic drugs. Among the global players with production facilities in the country are Roche, AstraZeneca, GlaxoSmithKline, Pfizer, Teva, and Novartis.

Around 75% of the turnover of the industry stems from exports, much of it from generic products. In 2010, total pharmaceutical exports amounted to €2.9 billion ($4.2 billion), that's a 250% increase from 2005. During the same five-year period, imports rose 188% percent to €2.6 billion ($3.7 billion).

Today, the sector is shifting more toward biopharmaceuticals and other higher value products, particularly follow-on biologics. The strategic change, and resulting innovative products, should help Hungary to be less reliant on Eastern European sales by enabling it to make inroads into the wealthier Western European market.


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