Romania: Europe’s Most Challenging Market for Generics?

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While the dismal regulatory environment in Romania has negatively affected the innovators with the uncertain and lengthy regulatory approval timelines as well as the dreaded ‘clawback tax’ doubling over the past decade, the generics sector has argued that they are the ones that have borne the brunt of unfavourable industry policies.

 

The environment is fertile for generics and biosimilars but they need to be viewed as a strategic investment by the national authorities

Adrian Grecu, APMGR

 

As Valentina Băicuianu, executive director of the Romanian Association of Generic Producers (APMGR), laments, “the operating environment has been deteriorating over the last five years. The healthcare budget has been frozen; only in the last two years [has it been] adjusted for inflation, yet it remains still insufficient” – particularly as a significant number of new innovative molecules have been approved in the past two years.

 

President of the APMGR, Adrian Grecu, explains, “one of the challenges faced by the authorities [has been] the backlog of [unapproved] innovative drugs. Suddenly, close to 100 new molecules were introduced without ensuring proper financing, causing the clawback tax to increase.” He lambasts the system for missing the big picture: “biosimilars and generics offer a way to optimize the budget while allowing investments to flow into the country. With an ageing population and with more informed patients, the [demand for] medicine and [better] access to treatments will only increase. The environment is fertile for generics and biosimilars but they need to be viewed as a strategic investment by the national authorities.”

 

Romania has one of the lowest rates of generic penetration amongst the Central European countries. The availability of our portfolio to patients [here] is far from where we could be considering our extensive global portfolio

Stana Moisescu, Teva

 

Given the harsh conditions, it is little surprise that the penetration of generics and biosimilars in Romania is far lower than the European average. For biosimilars, for instance, Romania has a paltry penetration rate of four percent compared to over 90 percent in other European countries like Norway.

 

For many generic players, the drastic increase in the clawback tax precipitated a painful restructuring of their operations in Romania. As Egis general manager Arina Gholmieh recalls, “Egis had to go through a restructuring process [with] no choice but to let go a significant percentage of our people. This was the toughest period of my career as GM.” Nevertheless, she continues, “Since then, my focus has shifted towards maintaining sustainable growth and capitalizing on the opportunities [available]. We entered the biosimilar field [in Europe] at a very early stage and we hope to develop it [in Romania] in the near future.” With the launch of their pegfilgrastim biosimilar in Romania this year, Egis is certainly off to a promising start.

 

[The challenge of] keeping products in the market and maintaining their accessibility for patients makes Romania one of the most challenging business environments in Europe

Daniel Bran, Accord Healthcare

 

Facing both external environmental constraints and internal organizational turbulence, Teva general manager Stana Moisescu advises, “it is a matter of adaptability. From a portfolio perspective, we have tried to keep many of the products critical for patients. Teva Romania has become a leaner and a more efficient organisation.” That being said, she comments, “Romania has one of the lowest rates of generic penetration amongst the Central European countries. The availability of our portfolio to patients [here] is far from where we could be considering our extensive global portfolio.”

 

For Daniel Bran, the founding general manager of Accord Healthcare, the clawback tax is also the heaviest burden to bear. He echoes, “This policy is not sustainable in the long term. Currently, it is the biggest cost for generics and when adjusted for products with prices lower than RON 100 (USD 23.5), it represents 40 percent of the producer price! [The challenge of] keeping products in the market and maintaining their accessibility for patients makes Romania one of the most challenging business environments in Europe” – a cautionary comparison that Romanian healthcare authorities would do well to keep in mind when it comes to defining the 2021 healthcare budget.

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