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OVERVIEW

The pharmaceutical industry is one of the important sectors in the economy having significant potential to boost the country's exports, capitalising on existing competitive advantages in terms of well-educated and cheap labour force along with good sale experience on the market of former Soviet Union. Substantial restructuring in the drug industry, dominated by the privatisation of the two major drug producers in the country in 1999 – Balkanpharma and Sopharma, contributed to the recent expansion of the domestic pharmaceuticals market. The sales of domestic and foreign pharmaceuticals production on the local market grew by 53% since 2000 to BGN 622mn (EUR 318mn) in 2003. The sales also marked a growth by 11.9% y/y in 2003, paced by growing domestic demand. The largest portion of this significant rise can be attributed to the increased consumption of imported drugs which in 2003 represented some 66% of the domestic market. The lesser share of the domestic companies’ production realized on the Bulgarian market can be explained as resulting from their strong export orientation. As an illustration, the third largest medicine manufacturing company Biovet exports 98% of its output in about 50 countries. Most of the sales of the local producers go to foreign markets positioned as lowprice generic goods with relatively good quality. Russia, Ukraine and other countries from the former Soviet Union are major destinations for the local pharma firms but they are actively searching market opportunities in Central and Western Europe. The country's

membership in the EU would undoubtedly expand the export potential of the sector and all firms have already stepped their investments in order to meet the high quality requirements of the single EU market.

The recent investments in the pharmaceutical sector helped the local producers meet the standards of the good manufacturing practices (GMP) for most of its product lines and get better positioning for expanding abroad. Over EUR 100mn have been invested in the sector last year as all four major players on the pharmaceutical market -- Actavis (named as Balkanpharma until recently), Sopharma, Biovet and Commercial League -- have implemented investment strategies aimed at introducing GMP into their manufacturing facilities. Judging from company reports, we see significant amounts of investments moving to the pharmaceutical sector with the opening of many new production units in 2003 and ambitious programmes for 2004. This turns the pharmaceutical industry into one of the fastest growing in the country but this is not caught yet by the official statistics.

Despite the rapid investment growth, many companies complain of inadequate state regulations that could hinder the progress in the pharmaceutical industry. Both Actavis and Sopharma pointed out a number of regulatory failures saying that they would delay certain investments plans. Sopharma, the second largest pharmaceutical company in the country, even blamed the government of favouring expensive imported drugs although cheap locally manufactured alternatives exist.

Bulgarian market pharmaceutical,Bulgaria, Info, Bulgarian, Map, Properties,Property Bulgaria,

Bulgarian market pharmaceutical

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