THE "FACT" OF ROMANIAN MANUFACTURING
According to 2010 Cegedim data, the top 10 pharma companies in Romania are solely innovators, holding over 57% market share.
However, a look back in time reveals surprising strengths about Romania's homegrown pharma companies. Before being acquired
by Sanofi and Ranbaxy, respectively, local generics companies Zentiva and Terapia already ranked among the top 10 largest
players in the country, while Antibiotice and Labormed still rank 13th and 17th today. These players have pioneered Romanian
generics manufacturing and are proof that the country has gathered a set of production capabilities. This, in combination
with low-cost and high-skilled labor, has attracted investment from the pharma world.
Petru Craciun, General Manager of Cegedim Romania
Describing locally acquired Sindan Pharma as a real piece of jewelry, Alina Culcea, as managing director of Actavis Romania,
emphasizes how the local state-of-the-art production facility has not experienced a single quality issue in its 20 year history.
Representing the sixth-largest market for the Icelandic parent today, Actavis' Romanian operations have now come to export
quality oncology generics to nearly 60 countries.
Still today, nearly one-third of the value of the country's pharmaceutical market comes from locally produced medicines. The
fact that these drugs may now be produced by foreign-owned entities seems of no concern to the Romanians. On the contrary,
"when foreign investors came to Romania, investments in local facilities increased significantly, which brought huge changes
into the management levels, and the way these businesses were run," argues ARPIM's executive director Dan Zaharescu.
Doina Ionescu, Managing Director of Merck Romania
GSK's acquisition of Europharm is a prime example of what multinationals can bring for quality upgrades. "The Brasov site
started as a generics site and has now evolved into one of the most recognized GMP certified facilities within GSK," concurs
Pascal Prigent, general manager of GlaxoSmithKline Romania. "We have a long-term commitment to this market when you look at
the size of our local operations ... this includes production and distribution operations, as well as a consumer healthcare
business. In our factory in Brasov alone, we have invested about $100 million since 1998," Prigent says.
Ioanica Geor-getta, director general of local player Fabiol, adds, "Many of the international investors that came here have
seized the opportunity to invest heavily in modernizing local Romanian facilities. Now, they are all capable of producing
innovative drugs in Romania, while the cost of doing so is still relatively low. Even for Fabiol, reaching out to international
investors is considered to be a significant opportunity going forward."
Dan Zaharescu, Executive Director of ARPIM
While GSK's setup may be rather exceptional in terms of diversity, it has not been the only multinational to recognize the
strengths of in-house distribution. "The business model we have put in place is based on having the core competences in-house,"
explains Doina Ionescu, country managing director of Germany-based Merck. "Merck is such a strong and sustainable brand, that
we want to replicate this offer of sustainability in the Romanian market," she adds. "This relates to safeguarding the key
marketing and key promotion skills, while we also improve availability of our products to better serve patient needs. For
the latter, we have rented a warehouse and engaged in a managed services agreement with a logistics service provider. This
model applies to both our pharmaceutical and chemicals businesses. We believe that direct customer contact and direct service
to customers are the most sustainable solutions we can offer," she asserts.
GSK — Europharm facilities in Brasov
Following the 2010 acquisition of Millipore, Ionescu saw the opportunity to generate synergies from tightening control over
its distribution channel. "Among the countries where there is one subsidiary and one distributor, which is neither an emerging
nor a major Western market," she recalls, "Romania was first to receive approval for the go-to-market approach. As of December
1, 2010, we therefore integrated the core competences in-house. Having a similar customer base has been the main synergy that
we have achieved here."