Steep decline of pharmacy sales in January

In contrast to the 2008/2009 autumn/winter season, when respiratory infections peaked at the turn of January and February, this time the peak occurred already in November. New flu cases began to drop off sharply thereafter, and in January 2010 they were almost three times lower than in the corresponding period of the previous year.

The earlier-than-expected outbreak of the flu season was reflected in pharmacy market statistics for January, with the number of patients visiting the average pharmacy during the month falling to just 3,580, i.e. down by more than 7% compared with December and by a full 17.5% on a year earlier. It was also the lowest patient-traffic figure for the month of January since records began, i.e. in 2002. As a result, retail pharmacy sales amounted to a modest PLN 2.12bn (€527m), which represented a decline of 10.5% m-o-m and of 10.6% y-o-y.

In our view, the January figures were additionally pulled down by a period of harsh subzero temperatures, which kept some customers at home and discouraged them from making less urgent purchases[1]. The weak rate of annual growth was also in part due to statistical factors, namely a lower number of working days compared with a year earlier and a high reference base (in January 2009 pharmacy sales jumped by a hefty 13.9% y-o-y).

In 2009 the pharmacy market in Poland grew by 8.3% and was worth nearly PLN 26.1bn (€6bn). Despite the continued deterioration in the labour market, we expect pharmacy sales to recover in the months ahead, which should ensure solid single-digit growth of the market in the year as a whole.

 

 

 

 

After a sharp slowing of market growth in December, when pharmacy sales rose by just 2.8% y-o-y (against growth of 19.5% y-o-y in November), this negative trend deepened in January, with steep falls reported across all main drug categories.

In comparison with December, the steepest decline (by 12.6%) was noted in reimbursed sales, which amounted to PLN 910m (€227m), i.e. 10.1% lower than a year earlier. At the same time, fully-paid prescription sales were worth PLN 383m (€95m), which represented a drop of 10.2% m-o-m and of 14.8% y-o-y. As a result, sales of prescription medicines amounted to just over PLN 1.29bn (€322m), down by 11.9% compared with the previous month and by 11.5% over January 2009. Sales of non-prescription medicines also posted a significant decline in January. At less than PLN 811m (€202m), they were 8.6% lower than in December and down by 9.4% on the same period of the previous year.

In terms of therapeutic class, only the “blood and haemopoietic system” category showed a (marginal) rise in sales compared with the previous month, with all the remaining categories posting declines. The share of medicines and of dietary supplements and dietetic food products in total pharmacy sales rose in January, respectively from 78.81% to 78.90% and from 7.07% to 7.27%, while the share of other products fell from 14.12% to 13.83%.

 

 

 

After rising considerably in the preceding month, in January the average price of a medicine sold in a Polish pharmacy fell by 1.4% m-o-m. This was due to a marked decrease in the prices of reimbursed medicines (by 4.2%), most probably related to the changes to the reimbursement lists introduced in December. The prices of OTC products actually increased in January, by 1.2%.

Although drug prices were lower in monthly terms, annualised price growth remained well ahead of inflation in January, at 3.5% y-o-y. In the analysed period, the average price of a medicine sold in a Polish pharmacy was PLN 15.55 (€3.9), up 10.1% y-o-y (compared with growth of 6.8% y-o-y in December), while the price of a reimbursed drug reached PLN 26.91 (€6.7), up by 5.8% y-o-y (against an increase of 6.6% y-o-y in the previous month). At the same time, the average price of an OTC product was PLN 9.88 (€2.5), a full 11.9% higher y-o-y (compared with growth of 8.4% y-o-y in December).

 

Meanwhile, the value of reimbursement amounted to just over PLN 650m (€162m) in January. This was 11.3% lower than in December and down by 7.7% on the same period a year earlier (against 4% y-o-y growth in the previous month). In the analysed period, the share of reimbursement in total pharmacy sales amounted to 30.7%, which was 1 p.p. higher than in January 2009 but 0.3 p.p. lower than in the preceding month. At the same time, the share of reimbursement in total reimbursed sales reached 70.6%, i.e. 0.8 p.p. higher than in December and 1.8 p.p. higher than in January 2009.

On the other hand, January saw a substantial increase in pharmacy margins, which have been on the rise for more than a year. The average pharmacy margin was 27.2% during the month, i.e. 0.9 p.p. higher than in December and 0.8 p.p. higher than a year earlier. Over the 12 months up to January, the reimbursed medicines margin increased by 1.8 p.p. to 20.8%, whereas the margin on remaining products rose by 1.1 p.p. to 32.5%.

 

 

 

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