Pharma’s Increasing Importance to Hungary’s Economy

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Hungary’s Minister of Finance Mihály Varga has repeatedly underlined the importance of the pharmaceutical industry to the country’s economy in recent weeks. With this strong governmental backing, pharma stands to increase its standing within the overall Hungarian economy.

 

Speaking at the inauguration of a new plant for Egis Pharmaceuticals – one of Central Europe’s most significant drug manufacturers – Varga noted that the pharmaceuticals account for six percent of Hungarian GDP – having grown by 50 percent since 2010 – and employs around 14,000 people. Furthermore, the value-added ratio of this sector is 38 percent; almost double the national average.

 

Macroeconomically, Varga added that the Hungarian economy has recovered extremely well in the past nine years; for example, in Q2 2019 it achieved the highest growth among all EU Member States of 5.2 percent. Although the performance of the German economy – to which the Hungarian economy is closely linked – has slowed significantly in the past year, Hungarian pharma has continued to grow, with industrial production up by 12 percent in July.

 

In another recent speech, this time at the conference of the Hungarian Pharmaceutical Manufacturers Association, Varga said that pharmaceutical companies in Hungary have increased their investments to HUF 97 billion (USD 323 million) in recent years, exceeding investment expectations by more than ten percent. He also stated that the Hungarian government intends to continue to support the sector, given the high cost and long process of pharmaceutical innovation.

 

Varga identifies the maintenance of a motivated, well-educated and healthy workforce as one of the sources of long-term sustainable growth. Therefore, the Hungarian government is aiming to provide the necessary resources to achieve this in addition to promoting a healthy lifestyle and supporting prevention. At the conference, Varga proclaimed that Hungary now has a regulatory and business environment that not only favours investment and business development and protects workers through stringent workplace safety rules, but also responds to changes brought about by digitalization and an ageing population.

 

The Minister went on to say that working conditions and adequate labour protection laws are essential for the overall development of the Hungarian economy. That is why the government adopted the National Labour Protection Policy in 2016, which contributes to improving working conditions, preserving working capacity and increasing the number of years of life in health.

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