Business daily Napi Gazdaság reports Mrs Krisztina Székely, Head of Innovative Drug Producers Association in Hungary as saying that importers are considering to withdraw certain drugs from the market due to the planned cut in subsidies.
Our view: We think both generic and original producers drive hard bargain with the government on the drug subsidies. Thus, we consider the announcement is only an element of this process and do not think that it could drive to real changes in the supply structure. We also note, that average profitability of generic drugmakers seems to be affected more negatively than that of the original ones. Therefore, we cannot rule out that generic producers will use the same argument against the government. The chance for real withdrawals, however, seems low for us.