Polish Drug Sector Performance Uneven Amid Low Spending

According to local sources, Poland's healthcare spending in 2004 was among the lowest in Europe, at 4.3% of GDP, representing a fall of 0.6% on 1996 levels. The news is largely to be expected, as the government is attempting to contain drug sector costs, and also in view of last year's introduction of a new reimbursement list that heavily favours locally produced generic drugs. A further concern for the sector is the government's recent announcement that it is to seek price controls on the more expensive hospital-based therapies, such as chemotherapy products.

Many multinational drug companies have complained that 2004 was one of the worst in recent years, with Eli Lilly, Novo Nordisk and Pfizer reporting declining sales in Poland. Eli Lilly has claimed a 47% year-on-year fall in revenue for 2004, mainly due to losses from local generic competition on its schizophrenia treatment Zyprexa.

Meanwhile, in addition to benefiting from a favourable regulatory environment, Poland's drug producers have reported strong exports of US$120mn in the first half of the year. The leading export destination in the period was Russia, with US$24.7mn, with a similar amount exported to Germany (US$24.6mn), and followed by Lithuania (US$9.8mn). Nevertheless, the local export sector remains dwarfed by imports from multinational producers, which stood at US$1.56bn in the period, mainly sourced from France, Germany and Switzerland.