Pharmacy market in Poland: better ending to a weak half-year
2010-08-19
Pharmacy sales in Poland showed solid growth in June. Increases were noted across all the main product categories, with the strongest rise occurring in non-prescription sales. This was accompanied by a fall in prices and a marked rise in the value of reimbursement and in pharmacy margins.
Overall market performance
After a very poor performance in the first months of 2010, the situation on the Polish pharmacy market improved significantly towards the end of H1. In June the pharmaceutical market (understood as retail pharmacy sales) grew by 6.9% y-o-y and was worth nearly PLN 2.19bn (€533m). It is noteworthy that the strong result was achieved despite a high reference base (in June 2009 the market rose by 9% y-o-y). Average pharmacy turnover grew at an even higher rate (by 8.7% y-o-y), but this was a consequence of a fall in the number of pharmacies during the past year.
Despite the recent acceleration in sales, cumulatively in the first half of the year the Polish pharmacy market grew by a meagre 1.1% y-o-y, to approximately PLN 13.1bn (€3.3bn), which contrasts sharply with the 8.3% growth rate achieved in the crisis-ridden 2009.
Although the second half of the year can be expected to be better than the first one, in 2010 as a whole pharmacy sales growth is unlikely to surpass 3-4%.
Acceleration in sales
Compared with the same period of 2009, pharmacy sales were up in all the main product categories in June. As in May, the highest growth (by 13.4% y-o-y) occurred in sales of non-prescription medicines
[1], which reached PLN 773m (€188m). Reimbursed prescription sales grew by 4.4% y-o-y during this period, to a little over PLN 1bn (€245m), whereas fully-paid prescription sales rose by 2% y-o-y to PLN 408m (€99m). As a result, total prescription sales amounted to PLN 1.41bn (€345m), an increase of 3.7% compared with a year earlier.
Lower drug prices
Despite the increase in demand, drug prices actually fell slightly in June. The average price of a medicine sold in a Polish pharmacy was approx. 0.1% lower than in May, chiefly due to a 0.6% decline in the prices of OTC products, as well as a 0.2% dip in the prices of reimbursed medicines
[2].
During the analysed period, the average price of a medicine sold in a Polish pharmacy amounted to PLN 15.84 (€3.9), up by 2.8% y-o-y (compared with an increase of 3.8% y-o-y in May), while the price of a reimbursed drug reached PLN 27.43 (€6.7), up by 2% year-on-year (against an increase of 3.4% y-o-y one month earlier). At the same time, the average price of an OTC product was PLN 9.47 (€2.3), up by as much as 6.6% y-o-y (in May growth amounted to 5.8% in yearly terms).
The annual rate of price growth thus remained above inflation, which in June amounted to 2.3% y-o-y.
Sharp rise in reimbursement and margins
Meanwhile, the value of reimbursement totalled PLN 728m (€177m) in June. This was 4% higher than in May and 8.7% higher year-on-year. The share of reimbursement in total pharmacy sales amounted to 33.3% during the month, which represented an increase of 0.5 p.p. compared with June 2009 and of 0.6 p.p. versus one month earlier. At the same time, the share of reimbursement in reimbursed sales reached 72.4%, i.e. 1.2 p.p. higher than in May and up by as much as 3 p.p. on a year ago.
Margins also improved sharply in June. The average pharmacy margin was 27.8%, an increase of 0.7 p.p. in relation to May and of 1.8 p.p. year-on-year. Over the 12 months to June, the reimbursed medicines margin increased by 0.8 p.p. to 21.4%, whereas the margin on remaining products went up by 2.2 p.p. to 33.3%.
The data used in this article was sourced from PharmaExpert. All data at retail prices.
Paweł Sionko
Senior Economist
PMR Publications
[1] It was the first double-digit increase in non-prescription sales this year.
[2] PharmaExpert does not publish price data for fully-paid prescription medicines.
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