“In case of companies with significant sales – 45 companies with annual sales exceeding €5 million – the optimization of the portfolio will affect 10-20 percent of products. For the remaining drugs, produced by over 230 companies, optimization could reach up to 50 percent of the products. On the whole, we estimate that 1,500 of the 5,200 current medications will no longer be available next year or will be available in insufficient quantities,” Petru Craciun, Cegedim’s General Manager, said.
An emergency ordinance signed by former Minister of Health Ion Bazac, allowed the authorities to introduce the clawback mechanism on the local pharmaceutical market. This mechanism forces drug producers to pay a tax of up to 11 percent of the value of revenues obtained in the previous quarter.
The strongest impact could be felt by local producers, given that they produce generic drugs, which have the lowest profit margins. “If in Big Pharma [Ed. n. – large international brand medication producers] the profit margins are higher, the lowest margins are for the local generic drugs,” said Dragos Dinu, Partner at Link Resources, a pharmaceutical consultancy company, part of the NNDKP law firm. Dinu added that this mechanism was created for the mature Western markets, to discourage exaggerated growth in medication consumption, but that Romanian drug consumption is one of the lowest in Europe.
According to the ordinance, the top seven players on the market must each pay between €2.5-4 million on a quarterly basis, while Antibiotice Iasi, for example, which ranks 10th in the Cegedim list of top players in terms of sales volume, should pay about €1 mln each quarter. The Ministry of Health said that the measure could attract RON 100 million (some €23.3 mln) to the state budget this year and RON 500 mln (€117 mln) in 2010.
