Value of Czech Pharmaceutical Market Falls 0.21% Y/Y in 2011

Czech Pharma Market Value Falls Slightly in 2011

The value of the Czech pharmaceutical market in 2011 reached 58.724 billion koruna (USD3.114 billion), as calculated on the basis of medicines delivered to pharmacies and other healthcare facilities, in ex-manufacturer prices, according to information presented by the Czech State Institute for Drug Control (SUKL). The data provided by the SUKL do not include the margins imposed by distributors and pharmacies on the ex-manufacturer prices of medicines, and therefore do not reflect the absolute value of the Czech pharmaceutical market, in terms of end-user prices. Thus, the value of the Czech pharmaceutical market, based on the SUKL data, dropped by 0.21% year-on-year (y/y). In terms of volume, there was a 2.37% y/y reduction in the number of packages distributed to pharmacies and healthcare facilities in 2011, with the total reaching 297.14 million. When volume is measured by defined-daily doses (DDDs), however, the market's volume rose slightly in 2011, by 0.85% y/y, with the total number of DDDs reaching 5.856 billion. Full details of distributed medicines in the Czech Republic can be found on the SUKL website, in Czech, here.

Fourth Quarter Sees Improvement

In the fourth quarter of 2011 in particular, there was a slight increase in the value of the pharmaceutical market in the Czech Republic, with growth of 1.8% y/y to CZK15.047 billion. This was, however, the first quarter of 2011 in which the market's value exceeded that of 2010.

Prescription-Drug Market Bucks Trend

Taking the value of prescription medicines in particular, there was a rise of 10.85% in the value of the sales of prescription medicines to pharmacies and healthcare facilities in the fourth quarter of 2011, with the total value reaching CZK13.49 billion, representing 89.65% of the total value of the market (in the fourth quarter of 2010, prescription medicines accounted for 89.08% of the value of the market). In volume terms, there was a 1.45% y/y decline in the number of prescription drugs distributed during the fourth quarter of 2012, to 49.62 million.

Orphan Drug Sales Grow Dynamically

Sales of orphan drugs went up quite dynamically, with the number of packs distributed in the fourth quarter of 2011 reaching 16,244, which represents an increase of 31.35% y/y. In value terms, there was an increase of only 10.03% y/y in the sales of orphan drugs during the fourth quarter to CZK426.94 million.

Oncology and Immunomodulating Drugs Still Have Highest Sales Value

In terms of anatomical therapeutic chemical (ATC) groups, the group that accounted for the largest value of sales in the fourth quarter of 2011 remained group L—antineoplastic and immunomodulating agents—sales of which reached CZK2.85 billion, although this was down by 1.0% y/y compared with the fourth quarter of 2010. The sales of drugs in group C of the ATC system—intended to treat conditions of the cardiovascular system—had the second highest value of sales among ATC groups in quarter four 2011, although there was also a decline in this group, of 3.2% y/y. One of the few ATC groups in which an increase in sales was seen in the fourth quarter of 2011 was group J—anti-infectives for systemic use—sales of which increased by 5.11% y/y to CZK1.44 billion.

Outlook and Implications

The slight reduction in the value of the Czech pharmaceutical market shown by the SUKL data is in keeping with the trend that started in 2010, when the value of the market grew by only 1.0% as calculated by the SUKL, and fell by 0.63% according to the calculations of the Czech health statistics agency, UZIS (whose figures are based on end-user prices). The many price and reimbursement reviews carried out by SUKL over the past three years have had a major impact on the value of the Czech market, particularly in bringing down the prices of off-patent medicines (see Czech Republic: 12 January 2012: Drug Price and Reimbursement Revisions Generate Annual Savings of USD339 Mil. in Czech Republic).

The fact that the market's volume rose slightly when measured in DDD terms, but fell in terms of packs, can be partly explained as the result of the introduction of co-payments on prescription medicines in 2008, which over the years has resulted in larger pack sizes, to help reduce the burden of co-payments.

As the growth in the sales of prescription medicines in value terms shows—with the volume of their sales decreasing—sales of high-cost, new medicines still constituted a growth area in the Czech Republic during 2011. In the coming year and beyond, however, the Czech authorities are looking to curb this too, with the introduction of a greater emphasis on health technology assessment (see Czech Republic: 5 January 2012: Czech MoH Announces Plans to Introduce Cost-Benefit Thresholds in Healthcare; Medicines to Be Affected from 2013). Although it is unlikely that there will be such a strong focus on price reductions for off-patent drugs as previously, considering the boom in parallel exports from the country, further price cuts—and consequently spending cuts—in this area are also likely in the coming year.