The market also struggled with changes of general managers, while the clawback tax, a controversial tax charged on the sales of drug producers, was nerve-racking for managers. Until the end of the year, Ziarul Financiar will review ten key moments that marked the local healthcare industry in 2011.
1. The first draft of the healthcare law
A new method of functioning of the health system is set to be regulated by law, but a draft of the law was obtained and published by ZF in November.
The law has yet to be finalized, but the ideas behind it have been made public over the course of the year by the initiators of the law. Private insurance houses will be created, breaking the monopoly of the state and of private insurance and bringing additional money into the healthcare system.
Towards the end of the year, the law on co-payment was published in the Official Journal, in completely different version than the original draft. Co-payment entails the payment of a percentage of the overall cost of treatment.
2. Resignation of minister Cseke Attila
In August, Health Minister Cseke Attila submitted his resignation, unhappy with the sums assigned to the ministry at the budget revision. Of the EUR1 billion he had asked for, he only got EUR80 million. He had promised a tough restructuring of the health system, by closing down several hospitals and by turning them into nursing homes. The details of the “co-payment” system were also put together during his tenure. Cseke also wanted to subordinate the National Health Insurance House (CNAS) to the ministry, but did not succeed in doing so.
3. Hospital classification
As of June 1, 347 hospitals, both state-held and private, have been ranked into five categories. A quarter of them were provisionally included in one category and had to make certain investments by the end of the year to stay in that category. Hospitals in the top category are the best performing ones and include the Bucharest Emergency University Hospital and the Bucharest Floreasca Hospital. Hospitals in this category provide medical assistance on a regional level and have the highest-standard equipment.
4. Record-high investments in private hospitals
2011 has been a record year in terms of openings of private hospitals, totaling over EUR100 million in investments. Hospitals opened this year are the Sanador hospital (100% held by Doris Andronescu), Sf. Constantin (a hospital in Brasov, whose shareholders include businessman Mihai Miron with 33% of the shares), eye hospital Europe Eye (with Turkish shareholders), Delta Hospital (held by eight Romanians, six of whom are doctors), Muntenia Hospital (controlled by investment fund SIF Muntenia).
MedLife has inaugurated several units, among which a pediatrics and an orthopedics hospital in Bucharest. Another investment was made in the opening of a private hospital with 60 beds and in the acquisition of Eva clinic, which, according to the company, is the largest maternity facility in the region.
Private operators continued to open clinics, but the investments are smaller in the case of these medical facilities.
5. 70 state-held hospitals closed down
While the private sector saw openings, several state hospitals have been shut down. Sixty-seven of the over 400 state hospitals in Romania have been closed. They employed 626 doctors and 1,906 nurses. Of them, 19 were reorganized as nursing homes by government decision and two had their activity suspended. The remaining 46 are left outside the public heath network, and authorities have yet to decide on the form of reorganization. Subsequently, two hospitals, the one in Codlea (Brasov county) and the one in Comanesti (Bacau county) obtained a court ruling allowing them to reopen.
6. Leader of pharmaceutical market gets new manager
The departure of Dan Ivan from Sanofi, the leader of the Romanian pharmaceutical market, brought to ten the number of companies that changed their management this year. Ivan’s decision came as a surprise to the drug market, since he had worked for 16 years within the company. Now he is general manager of Actavis. Alina Cucea, who had been general manager until recently, is now deputy general manager. The companies with a new management this year are Sanofi, GSK, Sandoz, Novartis, MSD, Eli Lily, Boehringer Ingelheim, Farmexpert, Novo Nordisk and Actavis.
7. A&D Pharma’s unlisting from London Stock Exchange
A&D Pharma, the largest Romanian medicine group, left the London Stock Exchange in March, where it was listed since 2006.
In the last day of trading, its GDRs (Global Depositary Receipts – certificates backed by shares in the company) had a price of EUR4.3, which brought the company’s market value at EUR137.7 million.
At the time of the listing in 2006, one GDR of A&D Pharma cost EUR12, and the company was valued at EUR400 million.
A&D Pharma is controlled by Walid Abboud, Roger Akoury, Ludovic Robert and Michel Eid.
Another major event for the company took place this summer, when Ludovic Robert, one of the four founders of A&D Pharma, gave up his position in the company board, according to ZF sources.
8. Drugs “made in Romania” reach increasingly more markets
Romanian drug makers have intensified their exports this year, seeking to escape cash flow problems on the Romanian market.
For instance, Europharm, held by UK’s GlaxoSmithKline (GFK), exports 60% of its output (by volume) while last year it exported 43%.
9. Clawback tax – troublesome for producers
October came with a new form of the clawback tax, a controversial tax that first emerged as a piece of legislation in 2009, but had not produced effects because of unclear legal issues. Producers contested this form of the law because it charged any increase in drug consumption above the level allocated by the state. The tax will be changed again in the coming period.
10. Expansion of large drugstore chains
The largest drugstore chains on the local market, Sensiblu, Catena, Dona, Ropharma, Help Net, have resumed strong expansion this year and opened around 100 drugstores in the first half of the year alone, according to ZF calculations based on data supplied by the companies. According to the data, the five chains currently operate nearly 1,000 units, accounting for 17% of the total number of drugstores.
(English version by Daniela Stoican)