Roberto Musneci: The price of medications will drop by 15%

“One of the changes will be, in fact this was the law, but was not fully respected, that prices will be based on the lowest carriage and insurance paid (CIP) prices in Europe.  What does this mean in strategic terms?  The price will drop, and as such I believe I can make a fairly exact prediction: the price will drop 10-13 or 15 percent, this is clear.  At the same time, the market will grow in volume; larger volumes at lower prices means greater access to medications,” added Musneci.  One of the measures which will bring supplementary growth on the market is that medications for retirees with pensions below RON 600 will be compensation to 9 percent.

As concerns compensated medications at a fixed rate of RON 4/€1, which transfers the exchange rate risk from the distributors to the international drug companies, analysts believe this is a natural step, which will force international producers to develop their operations on the market.  “Romania and Bulgaria were the only states in Europe in which there is a 100 percent convertible currency, and prices are calculated in euro, dollars or Swiss francs.  I believe, as a first argument, that this situation was not normal.  The second argument in favor of this measure is that it introduces a high level of stability for local business.  The year 2008 was a complicated one for pharmaceutical distribution, as distributors were subject to major losses due to the exchange rate.  At the international producer level this is a simple problem to resolve, as multinationals usually have a sort of clearance house, somewhere in the country of origin or elsewhere, where they are able to compensate at the group level for losses or profit because of the exchange rate, which means they can neutralize such movements.  Local operators cannot compensate for such movements,” explained Musneci, who has been serving since the end of last year as non-Executive Director of the A&D Pharma distributor.

Roberto Musneci further said that it is essential for companies to do their billing in lei, which will require that major international companies must transform their  representative offices into branches, to neutralize a very high risk not only for local operators, but also for the state budget, because there will be a clear budget at a clear price.  “Obviously this will involve more complex operational involvement,” added Musneci.