On a generics conference held in Budapest this weekend, the Alliance of Hungarian Drug Producers (Magyosz) called for more actions from the government to favour generic drug consumption, which could also help in curbing drug expenditures - according to business daily Vilaggazdasag. Mr Erik Bogsch, CEO of Richter urged for a 5-year agreement between the drugmakers and the government to replace the existing one, which expires this December, after being in effect two years. This agreement set the amount drugmakers had to contribute to the growing gap of the Hungarian drug subsidy budget.
Our view: A long-term, transparent subsidy system would allow for better planning for the drugmakers, therefore it will be clearly beneficiary for the sector. While, it is widely expected that a potential new system would increase the burden of patients through lowering the average subsidy rate, it is also seen to cut into profits of pharmas through higher subsidy paybacks. Overall, we consider pharmas' call for a new five years agrement as neutral for the share price of Hungarian listed drug companies.