According to a report compiled by the Polish-based research and consulting company, generics market (drugs produced and distributed without patent protection), has exceeded both in value and growth rate of original market, thus grabbing a market share of 60%.

“Although the innovative drug market in Central and Eastern Europe will develop at a slower rate than that of generic drugs between 2009 and 2011, the growth rate of original medicines for the whole region will be positive. It has, for the time being, been compromised by the cost-containment policies of the CEE countries, which have been stepped up during the global financial crisis”, PMR said.

However, in the medium term PMR expects an improvement in health awareness and the modernization of healthcare systems, including the development of private health insurance and the establishment of health insurance and drug reimbursement systems, similar to those in European countries, in Russia and Ukraine, to be drivers of the innovative drug market in the CEE countries. An additional driver will be the aging of the population in the region.

The growth of the generics market will also be fuelled by the CEE’s largest drug manufacturers such as Gedeon Richer, Krka, Egis and Zentiva, present also in Romania. The second group of countries that consists of global generic players, such as Dr. Reddy’s (India) and Actavis (Iceland), will also bring their contribution to the global growth of generics segment.

A number of consolidation processes recently took place in the generic arena, which were of great importance for Central and Eastern Europe. For example, Teva gained a strong presence in the region through the acquisition of Barr in July 2008, which included one of the largest local generic drug producers − the Croatian company Pliva. In June 2008, Mylan, a US generic manufacturer, acquired the CEE generics businesses of Merck KGaA, the prominent German drug manufacturer. The deal includes Merck’s operations in Poland, Hungary, Slovakia, Slovenia and the Czech Republic. In March 2009 Zentiva, one of the leading generic players in the region, was bought by Sanofi-Aventis. In May 2009 Novartis acquired the generic cancer drug production division of the Austria-based EBEWE Pharma”, PMR said in the report.

The innovative drug market in the region is dominated by multinational pharmaceutical concerns. Such companies have representative offices in most of the Central and Eastern European countries, but, as they are active all over the world, the region is not, in most cases, their main market. “However, innovative drug producers often choose Central and Eastern Europe as a place in which to locate clinical trials, because of the low costs, high population and limited access to innovative therapies in such countries”.

Today innovative companies face a crisis associated with the loss of patent rights pertaining to their most important products, which is expected to affect their sales performance in Central and Eastern Europe also, as many players of domestic origin may launch the generic equivalents of their drugs on the market.