1. Sale of Regina Maria private healthcare provider to buyout investor Mid Europa Partners
Private medical service provider Regina Maria was acquired by buyout investor Mid Europa Partners this summer in the most important deal on the private medical service market. The seller, Advent International, had 80% in Regina Maria, which it had bought in 2010, while founder Wargha Enayati held the remaining 20%.
The deal was put at EUR100 million. Regina Maria is the second largest private medical service provider in Romania by revenue (EUR55 million in 2014), while market leader is MedLife (EUR80 million revenue in 2014).
Rumors about Advent planning to exit Regina Maria that first surfaced last year, spread early this year when names of potential buyers were mentioned, as well: Mid Europa, Turkey’s private medical service operator Acibadem, Germany’s Fresenius and private equity firm Warburg Pincus.
2. GSK sold pharmaceutical distributor Europharm, officially closes the drug plant by the same name in Brasov
UK’s GlaxoSmithKline (GSK) sold the pharmaceutical distribution unit Europharm Holding to fast moving consumer goods distribution group Interbrands. The deal announced this fall was estimated at tens of millions of lei. GSK had been trying to sell its pharmaceutical distribution unit for ten years, as the Romanian market was one of the few where it had such operations.
Shortly afterwards GSK said its Europharm plant in Brasov would continue to make drugs until December, and then the operation would be relocated to other countries. The reason is the local production overcapacity. Europharm Holding, GSK’s largest company in Romania posted 870 million lei (EUR193 million) revenue last year, while net profit stood at merely RON1,200, according to Finance Ministry data.
3. Drug advertising on radio and TV on the verge of being banned
The Senate voted a bill in the second half of December banning explicit advertising of drugs on radio and TV. The only drugs whose promotion will be still be allowed will be the over the counter drugs and they, too, will have to be advertised on media channels other than radio and TV.
This bill coming from Democratic Alliance of Hungarians in Romania (UDMR) senator Alexandru Vegh caused uproar among advertising companies and drug producers and distributors, with the latter saying that if signed into law it may force them to stop selling certain drugs. The bill is still waiting for President Klaus Iohannis to sign it into law.
The talk about banning drug advertising came up this summer, when the Romanian government sent a memo to Romania’s National Audiovisual Council suggesting the Advertising Law be amended so as to remove drug advertising from radio and TV. The Council dismissed it at the time.
4. Polisano made a new investment in a plant
The Polisano group held by the Vonica family invested EUR67 million in a pharmaceutical plant in Sibiu. Once the plant reaches peak capacity in the second half of next year, it should generate EUR40 million to EUR60 million revenue. The investors used EU funds for the new plant, Polisano Pharmaceuticals.
The group’s most important business is pharmaceutical distributor Polisano SRL, whose annual revenue stands at RON1.3 billion. The group also includes the retail pharmacy chain by the same name and the Polisano clinic and hospital.
Polisano Pharmaceuticals has been making nutritional supplements since last year and production will be expanded to include other OTCs and Rx (prescription) drugs.
5. Medical service providers and pharmacy chains continued expansion
Both Regina Maria and the leader of the private medical service market MedLife continued to expand this year, opening a number of clinics in various cities of the country. The latest such city was Timisoara, where Regina Maria opened its first center in the west of the country in Iulius Mall and MedLife opened a large clinic at the beginning of December, so it now has two clinics in the area.
Retail pharmacy chains developed, as well. One such example is Sensiblu, which launched a new brand, Farmacia Punkt at the beginning of the year, targeting crowded districts in Bucharest. This was the first notable move of Sensiblu, part of the A&D Pharma group, since 2012, when it bought 90 pharmacies of rival City Pharma.
6. Help Net bought 19 Centrofarm pharmacies
Centrofarm retail pharmacy chain, controlled by businessman Alain Bonte, sold 19 of its 50 pharmacies to Help Net, one of the largest local pharmaceutical retail networks in Romania, part of Ovidiu Buluc’s Farmexim group.
Out of 19, 11 operate in malls or hypermarket shopping galleries.
The 19 Centrofarms generate more than EUR4 million revenue, according to Competition Council data. The first four of them became available for sale in October-December 2014, while the rest in January-June this year.
The takeover has not been completed officially, merely approved by the Competition Council, according to the latest information supplied by Help Net representatives. Almost half of the pharmacies Help Net will buy operate in Bucharest.
Help Net had 170 pharmacies last year, so the acquisition will take it closer to 200. Centrofarm has been in the red since 2011, posting EUR2.4 million losses in 2014. Revenue stood at almost EUR21 million last year, down about EUR3 million on 2013, according to Finance Ministry data.
7. Affidea grows to 18 clinics in Romania after buying four in one go
Medical service operator Affidea (formerly Euromedic), which specializes in medical imaging, has grown to 18 clinics in Romania, following takeover of four Phoenix diagnostic imaging centers from five local entrepreneurs.
Clinica de diagnostic Phoenix, the company that sold the four centers, posted RON8.5 million lei revenue in 2014, up 14% on 2013, while net profit stood at RON1.5 million.
8. Change at the top of Medicover Romania
Swedish-owned medical service provider Medicover appointed a new chief executive officer for its Romanian operations in mid this year. The new CEO, Briton Adrian Peake, an accountant by trade, took the job after the former CEO, Adrian Purcarea, moved to the US with his family to attend the MIT Sloan Fellows for a year.
Adrian Peake started out in the private medical sector as chief executive of a BMI Healthcare clinic, one of the main private medical service operators in the UK, in 2009.
Medicover, held by businessmen Jonas and Robert af Jochnick, posted about EUR50 million revenue in Romania last year.
9. Health card became mandatory in 2015
Health cards became mandatory as of September 1, 2015, which theoretically means Romanians may no longer go to a doctor and receive free services unless they have this card. Still, there are still many people who have not yet received theirs or have not picked it up. The card is required in private clinics and hospitals, as well, as proof of insurance for the services reimbursed by the National Health Insurance House and has to be activated by the family physician first.
10. Higher salaries for medical staff in public healthcare sector
More than 200,000 employees in the public healthcare sector got a 25% raise as of October 1. The money, taken from the savings of the National Health Insurance House, started being transferred as of October so all the more than 200,000 people entitled to the raise should get it by the end of December, according to the latest information available.
(English version by Loredana Fratila-Cristescu)