Multinationals Upbeat on Hungary R&D Despite Patent Challenges

Hungary's status as one of the most advanced pharmaceutical markets in Eastern Europe, with per capita spending at US$152 in 2003 and a strong manufacturing sector, continues to encourage multinationals to build their local presence. However, R&D activity is also expanding, with French drug major sanofi-aventis announcing a further EUR15mn (US$19.88mn) investment in its R&D centre in the Hungarian capital, Budapest.

The company claims that the unit's staff has participated in at least one phase of roughly 45 discovery projects, identifying two promising molecules currently under development by the company.

The French drug major entered Hungary in 1991, through Aventis' acquisition of Chinoin Rt, which has a 122,251 square metre manufacturing facility outside Budapest. Sanofi-aventis has reportedly invested more than HUF100bn (US$548.72mn) on its Hungarian subsidiary to date, with more than 300 staff currently carrying out R&D work.

Multinationals operating locally have indicated that that, despite significant recent reforms and EU membership, Hungary's intellectual property environment has failed to reach international standards. However, given the abundance of well-trained research staff and substantial cost advantages, the multinational sector will be unwilling to forsake potential gains from operations in the country.