Pharmaceutical and Biotechnology Industry in the 'New' EU Countries Presents Considerable Potential,

Strategic Analysis of the Opportunities for the Pharmaceutical and Biotechnology Industry in the 'New' EU Countries -

In contrast to subdued growth in the pharmaceutical markets of the former 15-state European Union (EU), pharmaceutical markets in the 'new' EU accession markets are expanding vibrantly. While the former has been increasing at eight per cent annually, the latter has been growing at the rate of 16.5 per cent over the past five years, offering exciting growth opportunities to pharmaceutical and biotechnology companies.

Globally, the EU healthcare industry is the second largest after North America. Estimated at nearly USD 7.0 billion, the pharmaceutical market in the 'new' EU countries' - Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia - represents about eight per cent of the EU 15 market.

Both Poland and Hungary, which contribute 45 per cent and 23 per cent of the accession countries' total pharmaceutical market value respectively, have been growing by almost 20 per cent since 1998. With 'new' EU countries expected to make significant, long-term investments in order to achieve sustainable systematic changes to their healthcare systems and match EU regulatory standards, growth prospects in the region are expected to be considerable.

Propelled by the twin advantages of low costs and easy patient recruitment, the 'new' EU also offers tremendous scope for conducting clinical trials. Already, large multi-national pharmaceutical and biotechnology companies from Western Europe and from the United States are carrying out clinical trials on rare diseases and diseases relevant to large worldwide markets.

Coordination and swift completion of clinical trials in the new EU have been facilitated by easily accessible, large and relatively under medicated patient populations as well as more structured healthcare systems. An additional advantage has been the availability of highly qualified investigators with lower pay scales than their western counterparts.

Moreover, with hourly wages in the 'new' EU countries pegged at a quarter that of western countries, pharmaceutical companies have been able to avoid their single largest cost: the opportunity cost of a delay in getting a drug to the market. This is particularly pertinent since delays in getting a drug to the market often work out to a daily loss of USD 1 million.

Identifying potential growth segments in the 'new' EU markets, Dr. Raju Adhikari, Frost & Sullivan (http://healthcare.frost.com) Pharmaceutical-Biotechnology Analyst says, "Mirroring the changing disease burden of the west, the anti-infectives market share has declined, whereas cardiovascular, central nervous system (CNS) and metabolic disease categories have taken over. Huge growth opportunities in asthma and oncology also exist and companies with products in these diverse areas are likely to be more successful in the 'new' EU markets."