Hungarian Drug Price Rises Seen Cooling

Hungary's producer prices for pharmaceuticals and drug raw materials rose 1% in March over February, according to official statistics. The consumer price index was 0.6% higher in the month.

The results indicate that drug price inflation in Hungary is slowing sharply, as the government's cost-cutting sector policy begins to bite. Despite the ongoing strength of the generics-dominated export industry, it appears that limits on the country's reimbursement framework, the National Health Insurance Fund, are having some effect.

Hungarian drug spending has been growing rapidly in recent years, with annual sales often rising by up to 20% year-on-year since the start of the decade. Sales growth slowed to 14% in 2004, and a new agreement between manufacturers and the government to restrain drug prices until December 2006 is expected to help contain prices this year. The arrangement affects approximately 4,000 products, with the maximum increase set at 7%, or roughly the level of inflation expected in 2005.