Boston, MA -- (ReleaseWire) -- 03/15/2013 -- BMI View: The recent measures proposed by the Czech Republic's Ministry of Health will, in all likelihood, negatively affect the Czech pharmaceutical market. The introduction of reimbursement ceilings, blind bidding auctions and preferential prescribing will squeeze drugmakers' margins and shift some of the burden of healthcare spending onto the private sector. The outcome of similar measures in Hungary and Poland strongly supports our view that the business environment for drugmakers will worsen if these proposals are adopted. It is patients who, ultimately, will suffer.
Headline Expenditure Projections
- Pharmaceuticals: CZK80.71bn (US$4.56bn) in 2011 to CZK79.76bn (US$4.2bn) in 2012; - 1.2% in local currency terms and -7.1% in US dollar terms.
- Healthcare: CZK298.49bn (US$16.88bn) in 2011 to CZK297.87bn (US$15.831bn) in 2012; +0.4% in local currency terms and -8.4% in US dollar terms.
- Medical Devices: CZK26.51n (US$1.50bn) in 2011 to CZK26.91bn (US$1.43bn) in 2012; +1.5% in local currency terms and -4.6% in US dollar terms. Forecast moderately down due to macroeconomic factors.
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Risk/Reward Rating: The Czech Republic retains its leading position in the CEE RRRs in Q113, after displacing Poland in our Q412 assessment. Despite leading in our regional RRR table, the outlook for growth for the Czech pharmaceutical market is not particularly robust, as a result of pricing pressure, impeded market entry and increasing generic substitution. An increase in VAT and a stringent reference pricing system have affected sales and hit manufacturers' margins respectively.
Key Trends And Developments
- In November 02012, a new centre for research in biotechnology and biomedicine officially started operations near Prague, Czech Republic. The Biotechnology and Biomedicine Centre of the Academy of Sciences and Charles University in Vestec (BIOCEV), whose research complex is expected to be constructed by 2014, started its first project on functional genomics. BIOCEV is seeking researchers from abroad to participate in the project and is anticipated to involve 600 people for its full operations. BIOCEV receives most of its CZK2.8bn (US$144.7mn) budget from EU funds, with the rest coming from the state budget. The scientific centre is a joint initiative by the Czech Academy of Science and Prague's Charles University.
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