Romania faces a significant deficit in international trade in pharmaceutical products, as it exports cheap drugs and imports expensive pharmaceutical products instead. Specialists in the field emphasize the need to develop domestic production and reform the price policy to reduce dependence on imports and ensure the availability of medicines.
Record of drug exports in the first 4 months of the year – Photo Archive
Medicines exports reached a record level in the first four months of this year, according to the latest statistics produced by the National Institute of Statistics (INS). Specifically, in the first four months of 2024, drug exports reached 679.9 million euros, up 71.3% compared to last year, while imports totaled 2.071 billion euros. This led to a trade deficit of 1.39 billion euros, representing 14.9% of the country’s total trade deficit, according to 360medical.
We are dealing with the fastest growth in exports of medical and pharmaceutical products recorded by Romania in recent years. In April, a monthly record level of exports of pharmaceutical products was reached, of 221.3 million euros, more than double than in April 2023.
Dan Zaharescu, Executive Director of the Romanian Association of International Medicines Manufacturers (ARPIM), points out that the export record can be explained by parallel exports.
“The exports of medicines from Romania do not only represent domestic production, but also represent medicines that were produced outside Romania, were imported and are re-exported, it is the so-called intra-community trade or parallel trade, which represents huge amounts. Romanian production is not that big, especially the production that is exported.“, Dan Zaharescu transmitted for “Adevărul”.
Another explanation for this record was found by Cezar Irimia, president of the Federation of Associations of Cancer Patients: “In the conditions in which you, the Romanian state, do not pay these medicines, you delay the payments, that factory must pay its fleet, invoices, salaries and must find solutions, if you, the Romanian state, do not have money or do not give the money on time , it is normal that every business aims to keep its business afloat.”
Our country imports large quantities of pharmaceutical products, including innovative, much more expensive ones. More precisely, Romania imported medical and pharmaceutical products worth 2.071 billion euros in the first four months of 2024.
In the same period, Romania recorded a trade deficit of 1.39 billion euros for medical and pharmaceutical products, representing 14.9% of the country’s total trade deficit. The growth of this deficit is correlated with the expansion of the domestic pharmaceutical market, mostly covered by imports. In 2023, the pharmaceutical market grew by 16%, exceeding 6 billion euros, and the consumption of medicines rose by 2.4%, to 722 million boxes.
“The deficit of the trade balance on medicines is very large and this is due to the fact that Romania is not able at the moment to produce the so-called innovative medicines, protected by patents, which represent the fruit of the scientific research of the manufacturers of the respective medicines. These are unique, life-saving drugs for which there is no alternative, so the need for them is very high“, adds Dan Zaharescu.
The crisis of cheap drugs
At the same time, the number of generic drugs has halved in the last five years, and these cheaper drugs have disappeared from pharmacy shelves. Currently, in Romania, there are approximately 2,200 generic drugs, while 5 years ago their number was almost double, reaching up to 4,000.
This is because the costs of raw materials and energy have increased, and the price of these drugs has remained frozen, precisely because it is regulated by the state, and the manufacturers had no way to change it.
“Indeed, over the years, drugs have disappeared because generic drugs are the most affordable, they have the lowest price. Now, the authorities in general have understood this problem and have taken several measures to somehow stop the disappearance of generic drugs. Last year, a small price adjustment was possible for very cheap generic drugs, up to 50 lei, but an adjustment with inflation, which stopped the disappearance of drugs from the market, because otherwise other drugs would have disappeared as well. Also, the clawback fee was aligned to 15% for all generic drugs, because some were 15%, some were 20%. So these things helped a lot. But, really, generic drugs, because of the prices, are the most exposed. That is, if there is a problem, they are the most exposed.”, explained Simona Cocoș, president of the Association of Generic Medicines Manufacturers in Romania (APMGR) for “The Truth”.
INS data shows OTC over-the-counter drug prices rose 24 percent between June 2023 and June 2024, the largest increase among products. The increase might not be that big, adds Dan Zaharescu, noting that dietary supplements and OTC medicines do not have regulated prices, and the price increase could also be based on inflation.
Incidentally, these types of products can also be advertised, which could explain the higher prices.
An analysis by Ziarului Financiar shows that a Romanian spends, on average, about 280 lei annually on over-the-counter medicines and food supplements, 30% more compared to other countries in the Central and Eastern European region.
“Prescription drugs are state-controlled in price and there have been no increases in the past 12 months.“, points out the representative of the drug manufacturers.
Dependent on imports
Last year, the Patronatul Producătorilor Industriali de Medicamenti din Romania (PRIMER) highlighted the vulnerability of our country due to dependence on imports, accentuated by the closure of factories of active substances after 1990.
“We are especially dependent on imports of raw materials, for the manufacture of medicines and, in many situations, on the actual imports of medicines, precisely because they are not produced in Romania“, says Dan Zaharescu.
This is because our country did not encourage drug manufacturers.
“The industry is unfair, in addition to all the donations they give to the state, you know very well that they also have the clawback tax, both generic and original producers. We killed our production with the clawback tax in Romania, the only ones with pure Romanian capital are those from Antibiotice Iași, as long as they will exist“, emphasizes Cezar Irimia.
Furthermore, “if we don’t take care of production“, we will be at a standstill, “because no one outside gives you medicine if you don’t pay for it, we are known to be bad payers“.
“Unfortunately, our country, for the last 25 years, has created an environment completely hostile to the development of the pharmaceutical industry, and we are now seeing the bill. Drug manufacturers are overtaxed by the Romanian Government. Apart from all the taxes that an economic agent pays in Romania, the manufacturers of innovative medicines also pay the so-called clawback tax which represents 25% of the turnover they achieve with the Health Insurance system. Generic drug manufacturers pay 15% of turnover. Basically, any kind of investment in the pharmaceutical field has been stopped“, adds the ARPIM executive director.
Solutions
The need for new drug factories in our country is becoming more and more obvious, and the Covid-19 pandemic has highlighted the drug crisis in Romania, which has seriously affected patients. Thus, we could secure drug stocks and reduce dependence on imports, but we would also have lower costs for these products.
“First of all, we need a favorable framework for the development of the pharmaceutical industry: there should be legislative stability, predictability in terms of taxation and the contributions that the industry must pay to the state. It is very important that Romania encourages international drug manufacturers to develop their production capacities in our country.“, concludes Dan Zaharescu.
Regardless of the measures that the authorities will take, we will not end up producing all the medicines in our country.
“There are over 20 drug factories in Romania. They are all generic, basic drug factories that are used in hospitals. Many of these factories, like us, also export to many countries in Europe and that helps the country’s trade balance. On the other hand, not all medicines are made in Romania. There are innovative medicines that are only made outside and they are very expensive. Regardless of the measures that will be taken, it will not be possible to manufacture absolutely everything in Romania, but things can be improved.“, adds Simona Cocoș.
Recently, the Government approved a state aid scheme of over 500 million euros to support the local production of medicines in Romania. The funds can be used for investment in production lines or testing laboratories.
“It was a promise by Minister Boloș to grant state aid, from the Romanian budget, of 500 million euros. They are not only for the pharma industry, so they are for all industries, after all, as the legislation appeared, practically anyone who has production facilities in Romania can apply. And there is another problem that affects some of us: the respective funds are granted according to a state aid scheme, but which does not allow investments in Bucharest.“, the APMGR representative also said.
“Medicine is about national security, if you don’t have a healthy population that you can treat in special cases, like the pandemic was, things can get very, very ugly“, stated Radu Gănescu previously for “Adevărul”.
