Basic Products Dominate in Evolving Romanian Market

Local manufacturing sector output in Romania comprises predominantly cheap, basic medicines, with the market reliant on imports, in particular at the hi-tech end of the scale. The leading therapeutic area in terms of sales is antibiotics, accounting for more than one-third of sales, followed by analgesics, accounting for more than 10%.

The prominence of antibiotics and analgesics, both basic medicines, reflects the emerging status of the market. Spending is forecast to reach only US$445mn at consumer prices by 2007, far below that of Eastern European rivals such as the Czech Republic, Poland and Hungary, but on a par with levels in Bulgaria and Russia.

As Romania seeks European Union membership and gradually reforms its pharmaceutical legislation to EU standards, the sector is facing a period of upheaval. Some local companies have restructured in view of this new outlook, including antibiotics maker Antibiotice, which last month carried out a US$1.2mn share issue and pledged to spend US$3.5mn this year on improving its facilities.

The company has already spent over US$30mn since 1999 on improving equipment, introducing more sophisticated product lines and achieving international manufacturing standards. Nevertheless, the fact that the company reported a net reduction in profit growth last year to US$4.3mn, on turnover of US$44mn, indicates that substantial challenges remain ahead for much of the sector.