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(Property of the Hungarian National Gallery, Photo by Tibor Mester.)
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With approximately $90 billion flowing into the country (according to the Hungarian Investment and Trade Agency) since it
abolished its centrally planned economy and transformed into an open, pro-business economy in 1989, Hungary has been a leading
destination for foreign direct investment (FDI) in Central and Eastern Europe (CEE). Together with the automotive and software
development sectors, the life sciences sector has been receiving the highest amounts of capital investment in the country.
Prof. Dr. István Nagy, Director of the AIPM
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Understandably, Hungary's high-quality infrastructure, highly skilled labor force and central geographic location are often
cited as features that have turned the country into an attractive destination for investment. Following historical prominence
as a key supplier of pharmaceuticals to the former Soviet Union, the landlocked nation is regularly described as one of the
oldest drug industries in the region. It has a rich history that has given rise to a number of successful local drug manufacturers,
many of which have been picked up by international MNCs over time, such as Chinoin by Sanofi and EGIS per majority stake by
Servier.
Christophe Gourlet, Managing Director of Sanofi
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Economic and healthcare reforms no longer come out of the blue, but global cost cutting trends and ongoing structural reforms
are a clear threat to investor confidence in some of Europe's smaller and more vulnerable nations. All the more reason for
the International Monetary Fund (IMF) to consider Hungary's Széll Kálmán (Structural Reform Plan) as a welcome step towards
growth and sustainability. "I do think that the aim of this government is to stabilize the whole economy of the country in
the long run," opines Prof. Dr. István Nagy director of the Association of Innovative Pharmaceutical Manufacturers (AIPM).
Needless to say that the Plan did cause quite a shakeup in 2011. "It proposes significant decreases in the drug budget by
Ft. 83 billion ($372 million) next year and an additional Ft. 40 billion ($179 million) the year after," adds AIPM's deputy
director and market access specialist Tamás David. "Do I think it is a threat? Yes. Did we have conversations about whether
or not we should stay in Hungary? Yes," adds AstraZeneca's president for Hungary, Jenny Winter. Much like the rest of Big
Pharma, Winter points out that the vast long-term potential of Hungary has prevented the British pharma giant from leaving.
Instead, the different players are now focusing on defining a new business model that takes these current challenges into
account, one wherein sustainability finds a new meaning.
Top 10 Ranking 2011
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"Whenever new decisions are announced, it is important that new measures do not put at risk the long-term development of the
pharma industry in Hungary, which remains one of the key industries in the country," observes Christophe Gourlet. As country
managing director, Gourlet reiterates the economic role the French pharma giant Sanofi plays in Hungary. As the second-largest
pharma company employing over 2,500 people and ninth-biggest exporter in the country, he points to the importance of upholding
a healthy investment climate.
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