Headcount reductions in drug distribution, falling revenues fordrugstores, temporary production halts by domestic producers andprice hikes for OTC drugs are the main estimates drug industryplayers are making for 2010.
In terms of dynamics, the pharmaceutical market will most likelyfollow this year's trend in 2010, namely it will post a slightincrease of as much as 10% in RON, a one-digit decline in value ineuros and in the number of units, and is set to return to growthboth in RON and euros starting 2011, companies say.
"It seems impossible that the pharmaceutical market should see anyfurther growth in euros, but it will be a great achievement if itgoes up in RON. The main factors due to influence the market in2010 are on the one hand the general shortage of funds, and on theother one, the healthcare system's arrears deepened by delayedpayment terms for drugs. These will have a deep impact on themarket dynamics in the following year," said Dan Ivan, country headof Sanofi-Aventis and chairman of Zentiva's board ofdirectors.
In the first nine months of this year, drug sales rose by 12.8% inRON, but fell by 3% in euros and by 10.5% in terms of the number ofunits, according to Cegedim Romania data. This trend may maintainby yearend. Cegedim expects the pharmaceutical market to slide by5-10% next year.
One of the upbeat managers is Dan Zamonea, general manager of RocheRomania, who sees "modest" growth next year.
Despite the divergent opinions on market growth, all players agreethat 2010 will be a difficult year.
"I expect system financing problems that emerged in 2009 to have animpact in 2010 as well, which will push industry operators to usetheir resources at the maximum to cover their floating capitalneeds and will obviously hurt investment budgets," believes DragosDinu, a partner with Link Resource consultancy. He adds that marketwill see a slight change in terms of retail and distributionbecause of the resource gap among players, with an "obvious"advantage for large players and vertically integrated ones.
Personnel cuts will be visible in drug distribution, whileproducers are likely to temporarily halt production and importerscould raise prices for OTC drugs. Drugstores will also suffer,after producers and distributors have significantly modified theircommercial strategy.
"Next year will certainly be a grey year and a year when companiesstart resetting their growth strategies (...)," Dragos Dinusays.
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