By 2010 the Value of the Pharmaceutical Market is Forecasted to Reach US$5.9bn.

DUBLIN, Ireland -- Research and Markets (http://www.researchandmarkets.com/reports/c57825) has announced the addition of "Poland Pharmaceuticals & Healthcare Report Q4 2006" to their offering.

In light of recently released data, BMI has reassessed its valuation of the Polish drug market and slightly lowered its forecasts accordingly. The value of the market at the end of 2006 is now expected to be US$4.9bn, a 5% year-on-year (y-o-y) increase. Previously, we had valued the market at just more than US$5bn by the end of this year. State-imposed cost-containment measures, such as caps on profit margins and price controls, are the key reasons for this lower projection. Additionally, patient awareness of lower priced generic equivalents is negatively impacting total sales. By 2010, the value of the pharmaceutical market is forecasted to reach US$5.9bn.

As the domestic drug market cools, pharmaceutical companies that pledged to invest in Poland have failed to follow through with their plans. This is leading to concerns about the future of the local industry, particularly its export capabilities. For example, attracted by low labour and transportation costs, UK firm GlaxoSmithKline (GSK) announced in early 2006 that it would construct a PLN54mn (US$17.8mn) plant and laboratory in Poznon. Ground breaking, however, has been postponed because of the current unsatisfactory investment climate, although 30 of the planned 70 employees have already been recruited. Possibly signifying a long-term improvement in registration protocols, the Office for the Registration of Medicinal, Medical Devices and Biocides (URPL) is ramping up its efforts to bring the country's drug registration process up to European standards by the end of 2008. The agency plans to hire 105 qualified individuals to support the existing team on upgrading registration documents to EU requirements. However, given Poland's recent 'brain drain', BMI thinks that the URPL will have a hard time recruiting people of this calibre and may have to employ lesser-qualified generalists.

In October, to the dismay of drug makers, the Polish Ministry of Health negotiated a reduction in the prices of 270 medicinal products that are used in public hospitals, to further lower expenditure on healthcare. The prices are now 10% less than the market rates and 6% lower than the prices agreed with pharmaceutical companies last year.

In a perturbing development, Poland's Customs Chamber revealed in September that exports of pharmaceuticals were 17% lower y-o-y in July 2006. The total value of medicines manufactured in Poland for foreign markets was PLN103mn (US$33mn), which is significantly less than the PLN125mn (US$40mn) exported in the same month in 2005. No explicit explanation was given for the decline, but BMI thinks that Central and Eastern European (CEE) drug makers are increasingly leveraging their low cost bases to undercut Polish pharmaceutical companies.

On a positive note, Poland is taking steps to kick-start its nascent biotechnology sector. Compared to the US and the rest of the EU, Poland's biotech sector is very much underdeveloped, but it is growing, and the Polish Academy of Sciences has outlined a plan to develop it further. To achieve this, the country should invest in science parks, build platforms for closer co-operation between industry and academia, exploit EU funding to a greater extent and develop goals in the field of high technology for the various regions in Poland.

Companies mentioned:

* GlaxoSmithKline

* Eli Lilly 

* Gedeon Richter

* Krka

* Lek (Novartis/Sandoz)

* Pliva

* Polpharma

For more information visit http://www.researchandmarkets.com/reports/c57825