Bulgaria pharmaceutical and healthcare companies will face a challenging transition period over the next five years, as the structure and management of the health system and increasing debt need to be tackled.

The country has slipped to 14th place in the sector Business Environment Ratings (BERs) for Emerging Europe, according to a regular report published by the “Companies and Markets” consultancy.

Growth rates in the industry halved in 2009 but, despite slow relative growth expected in many countries in 2010, Bulgaria is viewed as likely to remain in recession, despite access to new healthcare products.

The report notes that the Bulgarian government has sought to alleviate its heavy fiscal burden in the healthcare sector by passing on costs direct to consumers.

The reimbursement reforms proposed by the government earlier in 2010, which are likely to put substantial pressure on manufacturers of patented medical treatments, as well as onto severely ill patients.

Draft amendments to reimbursement levels for drugs included on Bulgaria’s Positive List could see the removal of lower reimbursement limits for groups of medicines that treat serious diseases. The proposals are viewed as a move away from improving patients' access to innovative treatments.

Bulgaria currently has the lowest per-capita government spending on pharmaceuticals in the EU and the highest proportion of consumer out-of-pocket spending, at around 56%.

The proposed modifications to the reimbursement system are likely only to exacerbate this situation, according to the industry association ARPharM.

While the short-term outlook for drug manufacturers is relatively negative, longer-term healthcare reform initiatives should improve the country's spending capacity.

Similarly, private health insurance funds finally look set to gain access to public resources for supplementary medical care, under recent amendments to Bulgaria's Law on Health Insurance.

An analysis of the pharmaceutical and healthcare companies currently operating in Bulgaria shows that Actavis remains the leading manufacturer by sales, followed by Novartis and Bulgaria’s Sopharma. Of the top 10 companies in the country, Roche was the fastest growing in 2009, with its sales increasing by 41,8%.

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