Today we’ll be taking a look at the medicine market in Romania.
After July 1st, when medicine prices were slashed by 20%, Romania boasts the lowest prices in the European Union. Health Minister Nicolae Banicioiu says the whole price-cutting procedure has been finalized after talks with representatives of the European Commission and the International Monetary Fund as well as representatives of medicine producers and retailers. “Prices could not remain like those in countries with higher GDPs.”, the Minister said. Banicioiu said that medicine of all kinds would be found on the market even after the price cut came into effect, while parallel exports would be kept at bay through strict measures; in some cases producers can even have their licenses removed unless they comply with the latest measures.
The Ministry has given assurances that cure alternatives will be made available in the case of generic medicine that are not on the market and patients will not have to pay more money. As we still lack data about how the medicine market will fare in the third quarter of the year, we can say that in the second quarter, sales dropped by 4.1% as compared to the same period last year; as a whole, the sales of prescribed drugs in pharmacies went down and the sales of drugs without prescription and of those prescribed in hospitals went up. Let’s find out more from Dan Zaharescu, director of the Romanian Association of the International Medicine Producers.
“Theoretically speaking, there were two major factors. The first is the hostile environment created in Romania in recent years, which lowered the foreign investors’ appetite for the Romanian pharmaceutical market. The second aspect is related to the announcements repeatedly made by the authorities that medicine prices would be slashed. As medicine prices are regulated by the Health Ministry, when such a price is cut through a decision by that Ministry, all the pharmacies must come in line with the new prices. Pharmacies have incurred losses due to that measure and that has made pharmacists show reluctance to order larger quantities of medicine, which they had no guarantee they can sell before the price-adjusting time.”
Dan Zaharescu has also made a forecast on how this market will be faring in the last months of the year.
"We expect the market to undergo further changes in the third quarter, while the fourth quarter will show us the real impact that measure has had upon the whole year. Let’s say that will be the first quarter of a stabilized medicine market. So 2015 is a year with a great deal of changes on the pharmaceutical market, and such changes are not meant to comfort patients. The dramatic drop in the medicine prices does not always work for the benefit of patients, given that medicines are a commodity enjoying free movement in Europe. The prescription of medicines for patients is made observing rules which are specific to each EU member state and situations are likely to occur when, although the price in Romania is very low, the products are brought by medicine producers on the Romanian market, trade and distribution structures would rather take those products from the Romanian market, reselling them on other EU markets, where prices are much higher.”
According to representatives of medicine producers’ associations, more than 1,000 medicines may run the risk to disappear from the Romanian market, with cardiology being the worst hit therapeutic area. The reason for that is the plummeting of the prices in pharmacies below the production price, so that certain medicines become unprofitable for producers. The president of the Generic Medicine Producers’ Association of Romania Dragos Damian spoke about the impact the cut in the medicine prices has had on the market.
”The authorities bragged that as a result of the cut in the medicine prices, medicine would become by 20% cheaper. The calculations we made revealed that on average the decrease stands somewhere around 10 %, while for the cheap, generic medicines, such a slump accounts for almost 50%, and that happens because what we’ve got is an insidious reaction, cheap medicines had already been cheap medicines. The moment this rule took effect, a rule that should not have applied in every case, it was uniformly enforced and the medicine price got even lower. The thing is that, for their most part, medicines below 50 lei, that is less than 12 Euro, are unprofitable for producers. The latter are now revising all their medicine portfolios. Some of them are likely to withdraw such medicines which do have their alternative, but those alternative drugs are more expensive. So the patients will indicate the drop in price but actually, they will take more money out of their pocket for their medicines. Some of them will have their alternatives, others will have no alternative for the same type of medicine, another medicine will be used, having the same effect, but then again, that medicine is more expensive. So, according to specialists, medicines in 2016 are likely to be by 10 % more expensive.”