Drug industry reels from leu�s downslide

Domestic drug distribution is affected by recent meltdown of national currency against euro, considering that most of the drugs sold in Romania come from imports.

75% of the drugs in the market are imported from EUR/CHF zone, therefore this will be reflected in the major declines of profit margin compared to previous years,” Dragos Damian (photo), managing director at Zentiva said in a statement. It seems that not only imports will contribute to this slump of profit margin, but also internal production.

“Prices of drugs made in Romania are connected to leu/euro exchange rate, and frozen since last year, as expenses on utilities are fully covered in lei and are subject to euro evaluation and gauged by personal consumption index (IPC – index of the average increase in prices for all domestic personal consumption),” head of Zentiva explained.

As for the direct impact over the company he heads, he stated: “The amounts to cash in from trade operations are not affected, as local subsidiary of Zentiva tolls in national currency. But consolidation in Czech koruna is subject to constant evaluation of this currency against leu, and lately, Czech Koruna climbed 25% against Romanian currency”.

According to him, when he readied budget blueprint for 2008, Zentiva took into account a 3.29 lei/euro exchange rate. “The amounts to pay afferent to contracts signed in euro, and payable in lei are constantly affected by currency exchange rate evolution. Furthermore, the prices for drugs on prescription are frozen by authorities since June 2007, at 3.3lei/euro,” Dragos Damian added.

Translated and adapted by Camelia Oancea.

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