Czech Pharmaceutical Market Increases 9.6% Y/Y by Value, Declines 1.8% by Volume in 2009

The value of the Czech pharmaceutical market grew by 9.62% year-on-year (y/y) in 2009 to reach 79.75 billion koruna (US$4.28 billion), according to data from the Czech State Institute for Drug Control (SUKL), based on the quarterly reports of registered pharmaceutical distributors in the Czech Republic. In terms of the market's volume, there was a decline of 1.80% y/y, with the total number of officially registered drug packages distributed in the country reaching 311.93 million. The number of defined daily doses (DDDs) increased by 1.20% y/y to 5.273 billion. The data on the Czech pharmaceutical market in 2009—both for the whole year and the fourth quarter—is available, in Czech, here.

Market Volume Increases in Q4 2009

In the fourth quarter of 2009, the value of the Czech pharmaceutical market, increased by 7.52% to 20.287 billion koruna, according to SUKL data, while the number of packages distributed also rose, by 0.27% y/y to 77.94 million packages. In quarter-on-quarter (q/q) terms, the market's volume increased by 5.41% from the third to the fourth quarter, while the market's value increased in this period by 4.29%.

Anti-Infectives Drove Market Growth in Q4

According to SUKL data, the largest growth in financial value of reimbursable drugs distributed in the fourth quarter, in terms of anatomical therapeutic chemical (ATC) groups, was in ATC group J—anti-infectives for systemic use, the financial value of which grew by 28% y/y. In the case of ATC group L—antineoplastic and immunomodulating agents—there was an increase in the financial value of distributed products in this period of 15% y/y.

Oncology is Largest Therapeutic Area in Sales Terms

In terms of sales by therapeutic area, oncology had the largest financial value in the Czech Republic in 2009, with the value of the drugs distributed within the L01 ATC group—antineoplastic agents—reaching 6.299 billion koruna. The second-largest ATC group in terms of the financial value of sales in 2009 was C09—drugs affecting the renin-angiotensin system (part of the cardiovascular therapeutic area), sales of which reached 3.792 billion koruna in 2009. In third place were anti-diabetes drugs, with sales of in 2009 reaching 3.312 billion koruna.

Conversely, the largest group of medicines in terms of volume of packages distributed in 2009 were analgesics, with a total of 30.83 million packages, followed by anti-inflammatory and anti-rheumatic drugs, with 19.18 million packages.

Atorvastatin Czech's Best-Selling API

The best-selling active pharmaceutical ingredient (API) in the Czech Republic in 2009 was cardiovascular drug atorvastatin, sales of which reached 1.536 billion koruna. This was followed by gastrointestinal drug, omeprazole, sales of which reached 931.35 billion koruna in 2009. Infliximab, the active ingredient in Schering-Plough (U.S.)'s Remicade, was the third largest selling API in 2009—Remicade is indicated for the treatment of rheumatoid arthritis and Crohn's disease, among other conditions, and achieved sales in the Czech Republic of 855.39 million koruna in 2009. In fourth place was Rituximab, the API in Roche (Switzerland)'s cancer drug MabThera, which clocked up sales of 826.65 million in in 2009.

Average Price of Medicinal Products Increases from Q4 2008 to Q4 2009

SUKL estimates that the average price of medicinal products in the Czech Republic increased from the fourth quarter of 2008 to the fourth quarter of 2009 by 17.5 koruna. Looking at the third to the fourth quarter of 2009, the increase in Czech medicinal products' average price is estimated by SUKL at 2.8 koruna.

Outlook and Implications

The increase in the financial value of the Czech pharmaceutical market in 2009—by 9.62% y/y—is one of the largest yearly increases the Czech market has experienced, and in the context of the difficult economic situation in the country—which has experienced a recession in recent quarters, and has a rising unemployment rate—is seen by many in the Czech Republic as a failure on the part of the Czech Ministry of Health (MoH) and the SUKL to control drug expenditure. To compare, the financial value of the Czech pharmaceutical market grew by 8.32% y/y in 2008, but the volume of the market declined by 7.4% y/y in that year. This shows that, in 2009, there was a much lesser impact—in terms of volumes of pharmaceuticals sold—resulting from the fixed co-payments scheme which requires Czechs to pay a fee for each prescribed item, as well as to see a doctor. One explanation for this could be widespread non-compliance with the system; it could also suggest that many Czechs have grown accustomed to it, and are more willing now to pay the fixed co-payments. Whatever the case, the fixed co-payments no longer appear to be providing the "cooling" of the market which they did in 2008, and this presents the Czech MoH with a considerable problem given its need to reduce expenditure. The SUKL has come under considerable criticism recently for the complexity and unwieldy nature of its pricing and reimbursement system, which, according to critics, results in considerable amounts of unnecessary overspending on pharmaceuticals by Czech state health insurance companies. Although it is intended that this system will be changed, this is a process which will take time, and with the Czech interim government approaching the end of its term in late May, when a general election will take place, this is likely to be a problem for the next Czech government.

Meanwhile, the prominence of oncology drugs as the largest group in terms of financial value is consistent with the trend towards more expensive, innovative drugs being reimbursed in the Czech Republic in recent years. Due to the increased financial restrictions within the Czech budget, however, there is unlikely to be any significant increase in expenditure in this area in 2010 (see Czech Republic: 25 February 2010: Czech Oncology Treatment Expenditure Will Not Increase in 2010 as Revenues from Health Insurance Premiums Plummet in January).