“Though we predicted a 0.3% decline for 2014, it seems that, especially owing to a more severe cold season than last year’s, we will end the year with growth, of between 1.5%-2%,” Petru Craciun, general manager of Cegedim Romania, told ZF.
The pharmaceutical market, worth almost 12 billion lei, had a weak performance this year, until the last quarter, when the cold weather brought some optimism among managers. The initial decline forecast issued by Cegedim came at the moment the company reported its last quarter results, much weaker than expected.
“Beyond the trend of treatment needs, still insufficiently covered, the problems that hurt the availability of some products, and Romania’s dwindling attractiveness in the region, the biggest impact (over the pharma market i.e.) came from the clawback tax, which forced companies to operate additional savings, through redundancies and curbed investments,” said Petru Craciun.
The clawback tax is paid by drug producers each quarter, being applied only to drugs that are subsidized by the state and have their price set by authorities. The tax got even as high as 15-20% of sales, which hurt the growth of the market and upset the commercial policy of the players that pay it.
Cegedim is a market research company specialized in the pharma industry that generated revenue worth EUR5.4 million in 2013 and now has around 70 employees.
Asked to characterize the trend of the drug market in 2014, Cegedim head answered: “stagnation, without too much enthusiasm and alternatives”.
“The biggest hope was related to the updating of compensated drugs, which happened late, in an abbreviated form that is not operational for the time being, which meant a disappointment for most companies. The fact that arrears were paid out is a big achievement, though there will still be fallouts related to these, insolvencies, bankruptcies,” said Petru Craciun.
“The rising clawback tax amid stalling sales raised a major question mark related to the relationship between authorities and companies. Toward yearend, there was further excitement related to the elimination of the demographic criterion, but the move was postponed for another two years for stability’s sake,” added Cegedim head.
(English version by Catalina Apostoiu)