Hungary Pharmaceuticals & Healthcare Report Q3 2014

Apr 29, 2014 - Business Monitor International - 106 pages
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We expect 2014 to be yet another challenging year for the industry, as a harsh business environment and regulatory burden weigh on market growth. Pricing pressures and slow uptake of new medicines will continue to present near-term headwinds to pharmaceutical sales, as will patent expiries. We anticipate growth will return to the market in 2014 in local currency terms, but this will still represent a decline in real terms.

Headline Expenditure Projections
  • Pharmaceuticals: HUF566.71bn (USD2.54bn) in 2013 to HUF570.61bn (USD2.49bn) in 2014; +0.7% in local currency terms and -2.0% in US dollar terms.
  • Healthcare: HUF2,140bn (USD9.57bn) in 2013 to HUF2,086 (USD9.1bn) in 2014; -2.5% in local currency terms and -5.1% in US dollar terms.
Risk/Reward Rating: Our proprietary Risk/Reward assessment tool has been gradually adjusted to be increasingly transparent and sensitive to potential Rewards. Therefore, as its market opportunities have been constrained, Hungary has slipped down the regional table, and currently ranks ninth out of the 20 regional markets profiled in the Central and Eastern Europe (CEE) region. For Q314, its ranking has fallen by one position from eighth to ninth owing to improvements in other markets relative to Hungary. While its Risks profile is generally predictable, its Rewards have worsened over the past years, and we envisage slow but gradual change in the long term.

Key Trends & Developments
  • The Association of Innovative Pharmaceutical Manufacturers (IGYE) called on the Hungarian government to increase funding for innovative drugs, describing the current system for gaining reimbursement as among the most bureaucratic and complex in the world.
  • A draft ordinance by the Ministry of Human Resources is set to ease the blind-bidding auction rules for establishing reimbursement, allowing more loose drug prices with respect to the reference prices set by the Ministry of Health.
  • A new law passed in December 2013 by the Hungarian parliament allows the OEP to grant beneficiary status to drugs that significantly improve outcomes and are irreplaceable.
BMI Economic View: Hungary's economic recovery remains at risk due to its reliance on government current and capital spending, rather than the promotion of private sector fixed investment. Hungary's debt burden is already high by regional standards, and with the poor business environment continuing to deter businesses from investing, we remain reluctant to forecast a stronger recovery.

BMI Political View: Following the re-election of the governing Fidesz party on April 6, Hungary's policy programme will remain centred around supporting government revenues via punitive taxes on business, and populist rhetoric railing against the EU. With radical nationalist Jobbik now the main opposition, we expect a more overtly nationalist agenda from the government in order to mitigate right-wing dissent.

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Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including Daily Alerts, monthly regional Insights, and in-depth quarterly Country Forecast Reports.