“I am not considering scenarios of a turnover decline because we are a distributor in full consolidation process. I am aware that the latest legislative modifications on the opening of the drugstore market, the clawback tax, the management of the national healthcare budget according to a decentralized model add to the existing problems to do with the lack of cash on the market and the devaluation of the national currency,” said Octavian Iacob, executive manager of ADM Farm.
ADM Farm is controlled by Dragos Pop (who is also general manager) and Alin Iosep, and in October 2011 it ranked 7th among drug distributors, with a 7.07% market share, according to the data provided by the company.
For 2011 ADM Farm had set an original budget of EUR200 million, which could be exceeded.
“ADM Farm posted a 10% turnover growth [in the first nine months of the year], above the average market growth of 6.9%. For the end of 2011 we expect the 10% growth to be retained, which will take us to a turnover of over EUR200 million,” Iacob said.
He added that the nine-month results were 4% higher than the original plan.
As for the 2012 budget, the executive manager of ADM Farm says “there are only a few details to sort out” and that the exchange rate they generally use is the one used for calculating Romania’s national budget.
He believes 2012 will bring a reconfiguration of the drug market, which will affect some of the players. He is talking about the clawback system – a tax on manufacturers’ sales, about the late repayments by the authorities and the turmoil in the banking sector.
The end of this year came with a new clawback system, which levies tax on drug manufacturers, and which in its current form reduces companies’ growth prospects and puts pressure on the entire system.
But the system will most likely be changed.
At the same time, players in the industry recoup their money for subsidized and free drugs after 300 days, which creates major liquidity problems.
However, the drug market saw a significant rise in the third quarter, by 13.7 percent against the third quarter of 2010, to 2.74 billion (EUR629 billion), the best evolution this year, according to Cegedim Romania data.
But industry players say this growth is largely generated by drugs bought in Romania and resold in other countries, where prices are higher (the so-called parallel exports).
Three months after joining the company, Octavian Iacob says his main objective is to retain the stability of the team and of work processes and to increase the market share from year to year.