OTC market in Central and Eastern Europe will grow in 2009 despite the global financial crisis
8% OTC market growth in 2009
In the last few years the economies of the Central and Eastern European (CEE) countries (Russia, Poland, Ukraine, Bulgaria, Romania, Hungary, the Czech Republic, Slovakia, Slovenia and Croatia) expanded very dramatically. The favourable economic situation, combined with increases in wages and burgeoning affluence in the countries in question, along with changing lifestyles which prompt people to take better care of their health and appearance, accelerated the growth of the OTC market in Central and Eastern Europe. In 2008 it grew by 26% and was worth €9.2bn, according to PMR estimates. The current global financial crisis will result in a reduction in demand for OTC products, as people try to limit their spending on products which they can do without, and in the pharmaceutical industry this means spending less on dietary supplements and OTC drugs. In some CEE countries, such as Ukraine, negative growth may even be seen on the OTC product market.
“However, PMR forecasts that, despite this, the overall OTC product market in the region will grow by around 8% to approximately €10bn in 2009. This is mainly because, in Russia, the largest market of the region, the OTC product market will see a positive growth rate of several percent this year” Monika Stefańczyk, Head Pharmaceutical Market Analyst at PMR and report co-author, explained. In the first half of 2009, the market in Russia grew by around 28% in rouble terms. In euro terms the growth rate was 6%, and in dollar terms there was an 8% reduction . However, such figures reflect unfavourable exchange rates and not, therefore, real market growth. This shows, that despite the global financial crisis, Russians are still buying OTC products very often and that the market should also grow rapidly in the next few months.
Russia predominates in the region
Last year, almost half of OTC market value in the region was accounted for by Russia, according to PMR estimates. Poland was the second largest OTC market in the region, with a share as a proportion of total sales in excess of 22%. Ukraine had a share of around 10%, whereas for the Czech Republic the figure fluctuated around 6%.
Regulations pertaining to distribution not standardised
One of the factors which influences growth on the OTC product market is the nature of the regulations pertaining to the distribution of such products in individual countries. “Although in some countries non-pharmacy and online sales of OTC drugs is allowed, pharmacies will remain the main channel for sales of OTC medicines, because there is a preference among consumers of OTCs to purchase such products at outlets at which they can also obtain a pharmacist’s advice” Agnieszka Stawarska, Pharmaceutical Market Analyst at PMR and report co-author, explained. In addition, the online sales channels of many groups of drugs may not become widely used, because of several factors: lack of trust in the channel in question, consumer habits and, finally, the low number of internet users in some countries.
In none of the countries of the region are there restrictions on the sale of dietary supplements in general stores, which are always subject to laws on foodstuffs, rather than those pertaining to pharmaceuticals. Legislation which regulates non-pharmacy sales of OTC drugs is, however, more restrictive, and the regulations differ from one country to the next. In none of the CEE countries analysed is the sale of all OTC drugs permitted in general stores. The most liberal law exists in Hungary, where some 390 brands of OTC drugs may be sold in places other than pharmacies.
Most CEE countries also do not permit the online sale of drugs. The most liberalised countries are Poland and the Czech Republic, whose governments have decided to regulate this issue and have approved the online sale of all OTC drugs. In Poland the online sale of OTC drugs was approved on 1 May 2007, and in the Czech Republic a law permitting the online sale of medicines came into force in January 2008.
The forecasts for the years 2009-2011 were prepared taking into account the average 2008 exchange rate of the euro against the local currencies, as this reflects the real growth of the market. The historical data are based on annual exchange rates (euro to local currency).
The value for the OTC product market is for 10 countries. For Russia, Ukraine, Poland, Romania, Bulgaria, Hungary and the Czech Republic OTC drug and dietary supplement market value is computed. The non-pharmacy dietary supplement market in Russia is excluded, as it is not well-monitored and, therefore, impossible to estimate with precision. For Croatia and Slovenia only OTC drugs are included. For Slovakia the overall OTC market is included.
This press release is based on information contained in the latest PMR report entitled “OTC market in Central and Eastern Europe 2009. Development forecasts for 2009-2011”.
For more information on the report please contact:
tel. /48/ 12 618 90 00
About PMR (www.pmrcorporate.com)
PMR Publications (www.pmrpublications.com) is a division of PMR, a company providing market information, advice and services to international businesses interested in Central and Eastern European countries and other emerging markets. PMR key areas of operation include market research (through PMR Research), consultancy (through PMR Consulting) and business publications (through PMR Publications). With over 13 years of experience, highly skilled international staff and coverage of over 20 countries, PMR is one of the largest companies of its type in the region.
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