Romania's pharmaceutical market has experienced rapid growth over the past four years, a trend which looks set to continue over the next five, although at a lower level. Despite the global economic downturn having major effects on foreign exchange rates - resulting in a marked decline in growth for imported medicines in euro or US dollar terms - year-on-year (y-o-y) growth in local currency remained very strong in 2008, highlighting continued demand for modern, effective treatments. Over the next five years BMI forecasts that the Romanian pharmaceutical market - which includes sales of prescription and overthe- counter (OTC) drugs - will expand at a compound annual growth rate (CAGR) of 9.75% in local currency, highlighting a prevailing attractiveness for multinationals.

BMI's Pharmaceuticals & Healthcare Business Environment Rankings for Q209 reinforce this fact, with Romania placing sixth out of a total 20 countries covered in Central and Eastern Europe (CEE). The country displays above-average scores in the pharmaceutical market and market risk sub-sectors, although it is let down by weaker country structure and country risk scores. Early 2009 saw the creation of a draft order for a new pricing system in Romania, which is likely to have a significant impact on prescription pharmaceuticals. The new system, which would expand the number of countries in the comparative basket, still equates prices to the lowest rather than the average prices in referenced countries. Nevertheless, a positive sign for drugmakers is the enforcement of a faster approvals system. Under the new order, decisions on price approval of a product would be adopted and communicated within 90 days of receipt of the application.

Price erosion in Romania's prescription margins, particularly in euro terms, has also raised Romania's profile as a parallel export source. According to the Romanian Association of Drug Manufacturers (ARPIM), the number of drugs approved for parallel exports increased to by 93% to 83 in 2008. However, OTC medicines in Romania increased in price by up to 50% over the first quarter of 2009 according to representatives of the Romanian pharmaceutical industry. Average pharmacy prices in March 2009 were reported as growing 20% against levels in December 2008. Q109 saw President Traian Basescu call for a reform of Romania's healthcare system. In a speech to a joint meeting of parliament, Basescu urged the government to urgently form a strategy followed by legislative framework, giving a six-month deadline for completion. He also voiced criticism over the administration of healthcare over the past two years and argued that the system was among the poorest performing in Europe, characterised by a lack of transparency in the allocation of funds as well as inefficient use of resources. 

Fastmr; BMI

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