This report discusses the pharmaceutical industry in Romania, discussing trends and corporate developments through August 2013. Firms discussed in the report include, among others, Sanofi Aventis, GlaxoSmithKline, and Centrofarm.

The Romanian pharmaceutical market increased by 2.7% y/y (3.4% y/y in EUR terms) to RON 2.8bn (EUR 647.5mn) in Q2 2013, tempering from the 4.3% y/y growth in the previous quarter. On a quarterly basis, the market shrank both in local currency and EUR terms, as it continued to be negatively affected by the drawback of public support and long payment terms.

Prospects for H2 2013 remain rather pessimistic, considering the authorities’ delay in revising the subsidized drug list and budget constraints affecting sales through hospitals. Market forecasts see the full-year growth at around 0.7% y/y in RON terms, slowing down abruptly from the 8.3% y/y rise in 2012.

Key Points:

• In corporate news, Sanofi Aventis has retained its position as pharma market leader in the 12 months ending June 2013.

• UK-based medicine producer GlaxoSmithKline (GSK) will sell within the next six months its production facility in Brasov, Romania.

• Romanian pharmacy chain Centrofarm opened at end-July 2013 Farma Drive in Bucharest, thus introducing a new pharmacy concept on the local market.

• The OTC segment continued to perform above the market average in Q2, with its share of total pharma sales rising by 0.7pps in Q2/2013 compared to the same quarter in 2012. However, the bulk of sales continued to be generated by prescription-based medicines.

• Pharmacy chains maintained a cautious expansion policy in H1 2013, yet larger players announced ambitious development plans for the following years. The number of pharmacies increased by 2% y/y in 2012 and roughly the same growth pace will be maintained in 2013 as well.

• The cumulated net turnover of the top five players increased by 9.4% y/y in 2012.