PROMOTION COUNCIL (Set up by Ministry of Commerce, Govt. of India)

H. O.: 101, Aditya Trade Centre, Park Inn Hotel Complex, Ameerpet, Hyderabad-500 038,Ph.: 040-23735462/66 Fax : 040-23735464 Email : info@pharmexcil.com Website : pharmexcil.com

Indian Gateway to Pharma Global Village

REPORT ON DELEGATION VISIT TO HUNGARY, POLAND AND

SLOVAKIA VISIT

July 2-13, 2006

Contents

Sr. No.Subject

1. Introduction

2. Objective

3. Day to Day Report

4. Registration Procedure

5. Opportunities for Indian Pharma Companies

6. Potential for JV / Collaborations

7. Cost Comparison

8. Conclusion

Introduction

Under the leadership of Ms. Satwan Reddy, Secretary, Ministry of Chemicals and Fertilizers, Government of India, mounted a delegation to Hungary, Poland and Slovakia. List of Delegation are :

1. Ms. Satwant Reddy, Secretary, Ministry of Chemical and Fertilzer, Government of India, New Delhi, New Delhi.

2. Mr. G S Sandhu, Joint Secretary, Department of Chemical and Petrochemicals, Ministry of Chemical and Fertilizers, Government of India, New Delhi, India.

3. Mr. G K Raman, Regional Director, Pharmaceutical Export Promotion Council (PHARMEXCIL), A Set Up by Ministry of Commerce and Industry, Government of India.

4. Mr. Dev Kumar Singh, Assistant General Manager, Accure Labs Pvt. Ltd, New Delhi5. Mr. Rakesh Taurani, Country Representative, Accure Labs Pvt. Ltd., Slovakia6. Mr. Kaushik Bhammar, Manager, International Marketing, Fourrts (India) Laboraories,

Chennai7. Mr. Sanyasi Rao, Manager-Exports, Natco Pharma Limited, Hyderabad8. Mr. Jay Mehta, Vice President, Unique Pharmaceuticals Labs, Mumbai9. Mr. Ajay Upadhyay, Managing Director, Yuyu Medimpex Pvt. Limited, Mumbai10. Mr. Haren Mehta, Country Manager, Sun Pharma, Budapest.

Objective of the visit  

To identify specific areas for cooperation in the form of Joint Ventures in Hungary, Poland and Slovakia, Technology transfers, Sourcing of APIs/Formulations from India.

To learn about the policies of Government of Hungary, Poland and Slovakia in o facilitating JVs with Indian companies. o the Incentives/concessions offered by Hungary, Poland for joint venture

companies. o the Legal framework for working out joint ventures.

Whether there is any single agency which will assist Indian companies in setting up Joint Ventures.

Any financial assistance that can be provided under any existing scheme of Government of Hungary , Poland, Slovakia.

Regulatory system for Pharmaceuticals in Hungary, Poland, Slovakia.

Drug Purchase policy of Hungary, Poland and Slovakia from Joint Venture companies.

List of Hungary, Poland, Slovakia companies which would be interested in JVs/ Collaborations with Indian companies along with their areas of interest.

DAY TO DAY REPORT FOR HUNGARY VISIT

Day 1 03/07/2006 Budapest

1000-1300

BSM was organized at Hotel Intercontinental. More than 25 attedended the BSM. List is enclosed as annexure 1 and programme as annxure II.

H.E Ambassador of India inaugurated the BSM, whereas Ms. Satwant Reddy, Secretary, Ministry of Chemicals and Fertilzers spoke about India’s strength in Pharma Industry and how India and Hungary can work together.

Presentation by all the companies who were part of he delegation.

Followed by interactive session between Hungarian and Indian Business delegations.

1400-1430

Meeting with Prof. Tamas L Paal, Head, National Instiute of Pharmacy. This is the National Drug Regisration Authority and Dr. Paal gave a briefing on the registration procedures, including changes in these procedures, including changes in these procedures after Hungary’s accession to the EU. Delegation has raised various questions and got clarification related to registration.

Day 2 04/07/2006 0830 AM Budapest

Meeting with H.E. Dr. Lajos Molnar, Minister of Health, Meeting also attended by Ms. Katain Novak, Dr. Lengyel Gabor, Ms. Kovacsy Zsombor, new health secretary. Ms. Sawant Reddy, Secretary, Chemical & Fertilzers, Government of India, gave brief about Indian Pharma Industry and how India can help Hungary in bringing down the deficit in Health sector by providing quality medicine at a affordable cost. Madam, also raised concerned about long taken for registration, and this is one of prime reason that Indian companies are coming forwards. Madam suggested that as a first phase, all the companies who are US FDA can be given fast track registration.

Madam extended an invitation from our Minister of Health to H.E. Dr. Lajos Molnar, Minister of Health to India.

H.E. Dr. Malnor, Minister accepted the invitation and would intimate the dates to us as soon as possible.

New Secretary of State for Health briefed the Indian delegation that there are four types of Marketing authorization is available in line of EU guidelines, they are :

1. Central registration procedure : This procedure is realized by EU in 300 days. For Cancer medicines, this can be done in a fast track.

2. National Marketing authorization procedure : This procedure is realized in 210 days.

3. Mutual recognisation procedure : If a Indian company has got registered in any of the European countries, these companies can be considered for fast track. The time taken is 90+30 days.

4. De-centralized procedure : 150 days. If no registered any of the EU companies.

EU registered companies are given priority and the registration can be done in fast tracks.

Hungary is brought new legislation for Generic Drugs, the pricing should be maximum of 70% of the original patented drugs.

1000 hours

Meeting wih Dr. Joszef Kiss, Director General, National Health Insurance Fund.

Dr. Kiss, Briefed us about the National health insurance fund. Also he briefed us about how the ceiling price are fixed. Some of the key points are :

550 new generics since October 2004, 280 groups of active substances, affecting 1.700 medications

Generic replacement in the pharmacies not compulsory MS in unit: 50%-50%, but in in reimbursement it is 75%-25% Price of the first generic: the price can’t be higher then the 70% of the original The price of new generic in an already existing fix-groups: can’t be higher then the

reference product Removal from the positive list: if the price of a product is higher than 20% of the

reference-medication

Definition of reference reimbursement by the flat amount reimbursement based on active substance

Must be the same: active substance, formulation, strength, method of administration

It is not in the process of being deleted from the drug register Bioequivalent with the originator Has the lowest definied daily dose cost calculated at retail price among the medicinal

products in the ATC-7 level Has been in the market for at least six month prior to the date when the reference

price for a particular year was definied and whose share in sales within the its category reached 3% in DOT

Reference-pricing happens once a year, the new reimbursement and co-payment must be declared every July

1330 onwards : Visit to Sun Pharmaceuticals plant in Tisavashari. Mr. Mehta took us around Sun Pharmaceutical Plant, which they recently bought from ICN Pharmaceuticals. This units is specialised in manufacturing Narcotic based medicines. This is the biggest investment by any Indian company in Hungary till date.

Day 3 05/07/2007 Budapest

Delegation comes to an end and leaves for Warsaw for next led visit to Poland

DAY TO DAY REPORT FOR POLAND VISIT

Day 1 05/07/2006 1830 hrs

Evening briefing and reception hosted by H.E. Shri Anil Wadha, Ambassador of India. HE specially invited Mr. Raj Airey, Country Manager for Pfizer Polaska Sp. Z.o.o and Mr. Jacek Wojciechowicz, Senior Communication Officer, The World Bank to brief Indian delegation on over economic scenario of Poland and Poland Pharma Market. This briefing session was very important for delegation as they gave insight view of the Poland and what is required to work in Poland. According to Mr. Airey some of the typical problems faced by Indian companies are :

Þ Doubts about the quality of Indian productsÞ Doubts about reliability Indian firmsÞ Not fair activities of competitors

Low prices, which are expected and accepted, make Indian products strong competition for western products

Day 2 06/07/2006 0800 hours

Meeting with Mr. Przemek Chromiech, Country Manager, Ranbaxy Poland. Mr. Chromiech, briefed about Ranbaxy’s experience in Poland Market. And according to him it is not a easy task to work in Poland. Ranbaxy Performance are As follows :

Market Share

From 1998 : 0.02% grew to 1.57% at 2005

This could be achieved due to :Aggressive marketing, tying up with largest distributors.

1000 hours :

Meeting with PAIIZ (Polish Information & Foreign Investment agency), Indian delegation met Mr. Adam Zolnowski, Vice President, Regional Cooperation department.

PAIIZ is nodal agency for investment promotion of Poland. Mr. Zolnowski made presentation on how Poland is a preferred destination and compare to other Easern European countries, Poland stands far ahead in terms of FDI and Investement climate. He also stressed how important India is for Poland.

1100 hours:

Meeting with Mr. Jedrzej Kosinski, Poleska Grupa Farmaceuyczna, PGF is the largest distributor of Pharmaceutical products in Poland. PGF distributes medicines of all the leading companies of both local and mnc companies. PGF took us around there distribution centre and showed how the orders are taken from retailers and fulfill them.

1500-1800 hours

Buyer-Seller Meet held at Hyatt Regency. Around 32 delegates turned up. Ms. Satwant Reddy Secretary, Chemical and Fertilizers, Government of India, inaugurated the BSM. While inaugurating the BSM, Madam stressed that India-Poland should work together and complement each other’s strength rather than treat each other as competitor.

Presentation by all the companies who were part of the delegation.

Followed by interactive session between Hungarian and Indian Business delegations.

Entire delegation list is enclosed is annexure 3

Day 3 07/07/2006 0900 hours

Meeting with Mr. Boleslaw Piecha, Secretary of State, Ministry of Health. This meeting was also attended by Mr. Leszek Borkowski, Ph.D, President, The Office of Registration of Medicinal Products, Medical devices and Biocidal Products and Mr. Piotr Blaszczyk, Director, Drug Policy Department, Ministry of Health.

Some of the key points discussed during the meeting are :

Average time taken for registration of generic products in Poland is about 2 years Any changes being brought in the regulatory framework:- after EU accession Poland have taken part in European registration procedures (centralized procedure and mutual recognition procedure). This is very convenient and faster way of registration on new products. - Polish national agency is planned to be changed into independent structure beginning of 2007. This should allow to employ more staff and make the registrations faster.

The biggest problem for all pharmaceutical companies regulatory side is now very long time of variations processing. The reasons are following: very demanding law regulations and lack of staff in the agency. The simplified pharmaceutical law is written, now it is under consultations. We hope that it will come into force beginning of 2007.

Madam invited State Secretary invited along with all Dr. Borkowski to India coinciding with Poland’s Economic minister’s proposed visit at end of September.

Indian delegation requested for simplification of registration procedure.

1130 :

Meeting with Mr. Wojciech Maj, Director and Mr. Antoni Milkaszewski, Deputy Director, Ministry of Economy. Mr. Milkaszewski briefed us about the economic scenario in Poland and how Ministry of economy facilitate foreign companies to work in Poland. He also briefed about Economic Minister’s proposed visit to India in September end. Ms. Satwant Reddy, suggested that a Pharma Delegation can mounted along with delegation of Economic Minister’s. Mr. Milkaszewski, assured that he will discuss with Minister in the afternoon and let is know.

This meeting was also attended by to state owned Pharma Companies, They are :

1. Dr. Adam Kazanowski, Marketing and Sales Director, Polfa Tarkomin S.A., They are the largest manufacturers of Antibiotics. They are very keen to source API and Bulk drugs from India.

2. Mr. Krzyszof Troncy, President, Warsaw Pharmaceutical Works Largest manufacturers of oncology products, they are looking at sourcing API’s and Bulk drugs from India.

1600 :

Meeting with Mr. Jerzy Miller, President, National Health Fund, NFZ. Mr. Miller briefed about NFZ’s functioning. NFZ is independent body looking after national health insurance. The source of Fund is from contribution from employee’s salary (8.7%) and it will be increased to 9% from 2007.

The reimbursement is based on following %

1. 100 % reimbursement like oncology products. 2. 70% reimbursement 3. 50% reimbursement4. 30% reimbursement.

Reimbursement for old age, children, pregnant women are 100%.

Delegation comes to an end and leaves for Bartislava for next led visit to Slovakia.

DAY TO DAY REPORT FOR SLOVAKIA VISIT

DAY 1 10/07/2007 10:00-1300

BSM meeting happened: Following companies attended this :1. Mr. MuDr. Bronislav Ciko, General Manager, Vivax Pharmaceuticals, S.r.o2. Mr. Andras Michlo, CEO, Herb Pharma3. Ing. Marek Fajcik, Financial Manager, Slovay Pharma4. Mr. Rafal Zgorak, General Manager, Fournier Pharma5. Mr. Branislav Obsitnik, Managing Director, Pharmedcons6. Mr. Anton Arvay, Commercial Director, Biotika A.S.

All the companies have shown keen interest in working with Indian Companies. Biotika shown keen interest to work with Natco Pharma and Vivax has shown keen interest to work with Fourrts and Accura Labs..

1400 :

Meeting with Association of Chemical and Pharmaceutical Industry of the Slovak Republic. Mr. Sefen Petkanic, General Secretary and Mr. Milan Kmet attended this meeting. They briefed in detail about Slovak Pharma industry including touch based upon registration procedure.

Day 2 11/07/2006 1000 hrs

Meeting with Ms. Zuzana Mijulasova, Project Manager, Slovak Investment and Trade, Development Agency. SARIO is the Investment and Trade Board, They assist foreign companies in investing in Slovakia. She made presentation on Slovakia’s Investment climate and what are the benefits provided for foreign companies to invest in Slovakia.

1200 :

Briefing meeting with H.E. Mr. M K Lokesh, Ambassador to Slovak Republic. Excellancy thanked Pharmexcil for responding quickly to Ambassador’s request and arranging delegation at the earliest. Mr. Lokesh has assured of all the assistance to Indian Pharma companies who wants to work in Slovakia.

1300 :

Meeting with Dr. Jan Mazag, Director, State Institute for Drug Control. He briefed about Slovakian registration procedure and answered all the queries of Indian Delegation. For registration Max time limit is 210 days. He would like speed up the procedure further. He has asked Indian delegation to get in touch with incase of any problem.

1400 :Lunch hosted by H.E. Mr. M K Lokesh, Ambassador of India to Slovak Republic.

End of Delegation,

12/07/2006 Indian delegation leaves for India via parague and Vienna.

OPPORTUNIIES  

Bulk drug/ raw material supplies from India. Collaboration from Indian companies for formulations. Product enhancement for Hungary, Poland, Slovakia Pharma through product Dossiers. Technical expertise enhancement for Hungary, Poland, Slovakia Pharma Industry. Supply of equipments for Pharma Production. Training of Hungary, Poland, Slovakia drug professionals in Indian Pharma Industry. Identifying Vaccine producing companies to participate in tenders.

 

BUSINESS OPPORTUNITY IN HUNGARY

Hungary's health care system is fairly well orgranized but severly under-funded and obsoletely equipped.  It is dominated by the National Health Insurance Fund (NHIF) which provides much of the funding.  The Fund is intended to be self-sustaining based on compulsory payroll contributions from both employers and employees, however without national subsidies the system would not be financially viable. In general, Hungary retains a predominantly publicly-funded health system, but at a somewhat lower level of support.  Long-term health care policy calls for maintaining public financing while creating private health care service opportunities and non-profit organizations.

International observers such as the World Bank identify the health care system as one of the few social structures areas still in need of major overhaul in Hungary. The current government (elected in April 2002 for 4 years) considers a comprehensive modernization of the health care system as one of its major tasks.  

Hungary spends slightly over 6% of its GDP on healthcare, a figure behind the OECD average of 8%. Neighboring Austria spends just over 8%, while Czech Republic around 7% and Poland about the same as Hungary. Total drug sales are expected to reach $1,100 million in 2002. Pharmaceutical costs are a significant part of the country's health care-related expenditures due to the extensive subsidy-system. The National Health Insurance Fund's Drug Budget takes nearly one-fifth of the country's total health care budget. In addition, patient cost sharing contributes nearly one-third to total drug expenditures in Hungary.

There are over 5,500 drugs registered in Hungary. Of these, 4,500 are prescription medications and roughly 3,400 are subsidized. The number of over-the-counter (OTC) medications has been on the rise in recent years and exceeded 1000 by 2005. Regarding total sales, prescription drugs dominate the market with approximately 85% market share. According to the Association of Hungarian Pharmaceutical Manufacturers OTC products account for 10-15% of total drug sales, compared to 30-40% in other developed countries.

Subsidies for prescription drugs are an important factor in the Hungarian pharmaceutical market. Reimbursement is administered by the NHIF and controlled by the Ministry of Health and Social Affairs. Based on the Ministry’s proposal, Parliament approves the amount available for drug-subsidies as part of the overall health care budget for the upcoming year. Under the present system, reimbursement is set as 0, 50, 70, 90 or 100% of the retail price or a fixed amount. Total subsidies have been approximately equally divided between domestic and imported pharmaceuticals.

Drug pricing is still a hot political issue in Hungary. Citizens had become accustomed to inexpensive drugs during the forty years of Communist rule.  Most people still feel entitled to low cost drugs as well as free medical services. Every year, the NHIF as the primary drug purchaser in Hungary set  prices for the year and regulates introduction of new subsidized products, after negotiation with the pharmaceutical companies. Only “evidence-based medicines” are included. In recent years the NHIF has covered about two-thirds of Hungary’s drug expenses with the remainder paid by patients directly.  

Since the election of the new Government in April 2002, there has been controversy over drug pricing. In 2000, the former Government signed a 3-year agreement with the pharmaceutical

companies about subsidized drugs' price increase. Companies were to have been allowed to "automatically" increase their prices by 70% of former year's Consumer Price Index each July. The newly elected Government, however, decided that the scheduled July price increase was not justified. The health and finance ministers started negotiations with pharmaceutical firms and announced in November an average 3.2% price rise as of January 2003 instead of 5% by July 2002 per earlier agreement. According to the Government, this is the first step towards a longer-term program for drug pricing. Further steps remain to be determined.

In the past few years, Hungarian clinics have become a preferred testing ground for multinational drug makers' new products. Some international companies make intensive use of the R&D capacities of the local industry, while others decided to relocate their R&D centers to Hungary.

BUSINESS OPPORTUNIY IN POLAND

The non-prescription medicines market, which accounts for about a quarter of the total market value, was worth PLN 2.970m (€666m) in 2003. In terms of percentage growth, this market segment is slightly different from the market as a whole, with higher growth in 2001 (15.5%), followed by a 7.1% decline in 2002, and growth again by 13.3% in 2003.

This year the market is expected to grow by 8-10%, which is a similar rate to the EU pharmaceutical market, which grows by an average of 10% a year.

Detailed figures are shown in the table below:

2001 2002 2003

PLN m, manufacturer price level

- Total pharmaceutical market 11,090 11,570 13,090

- Total non-prescription market 2,830 2,630 2,970

EUR m, manufacturer price level

- Total pharmaceutical market 3,019 2,998 2,975

- Total non-prescription market* 771 681 675

Percentage change over previous year

- Total pharmaceutical market +10.7% +4.3% +13.1%

- Total non-prescription market +15.5% -7.1% +13.1%

Percentage of total pharmaceutical market

- Total non-prescription market 25.5% 23.1% 22.7%

Main self-medication product groups

PLN m, manufacturer price level

- Cough and cold remedies 568 535 673

- Analgesics 362 376 463

- Digestives and intestinal medications 296 304 328

- Circulatory drugs 215 210 223

- Vitamins and minerals 633 578 591

The growth of the pharmaceutical market in Poland in recent years has created sizable opportunities for foreign drug manufacturers and exporters. This study will describe the regulations and requirements for pharmaceuticals sold in Poland as well as recent market developments arising from industry restructurization and privatization.

The Polish pharmaceutical market has been growing steadily during the past 5 years and is currently estimated at USD 3.2 billion. According to World Bank analysts, sales of pharmaceuticals in Poland will reach USD 5 billion (USD 100 per capita) by the year 2006. Experts forecast that Poland will experience dynamic development in over the counter (OTC) sales of pharmaceuticals which currently account for one-quarter of the local market (compared with 40% in EU countries).

Imports of pharmaceutical products have also been growing steadily. In 2005, imported pharmaceuticals exceeded USD 2.4 billion and account for 65-70% of the market.

A. MARKET HIGHLIGHTS AND BEST PROSPECTS

This section will describe the market for pharmaceutical products, the role of the health insurance system, regulations regarding registration of pharmaceuticals before they may be introduced for sale in Poland, the specifics of the reimbursement system, and, finally, the best selling pharmaceuticals.

I. MARKET PROFILE

According to World Bank projections, in 2005 Poles will spend 4 billion USD on pharmaceuticals. It is no wonder that all of the major pharmaceutical companies are already present on the Polish market, including: Glaxo-Welcome, Merck Sharp Dohme, Bristol-Myers-Squibb, Hoechst, Pfizer, SmithKline Beecham, Eli Lilly, Bayer, Novartis, Johnson & Johnson, Rhone-Poulenc-Rorer, Pharmacia Upjohn, Schering Plough, Wyeth-Lederle, and Sanofi.

Each year about 3,000 applications for new drug registrations are presented to the Drug Institute. This is four times more than in most Western European countries. On the other hand, no Polish drugs have been registered in Western Europe, and the prospects for this happening are poor. Placing a newly manufactured drug on the market is a very expensive (about 350-400 million USD) and lengthy (approximately 10-15 years) process. None of the Polish pharmaceutical companies can afford the cost. Polish pharmaceutical companies primarily manufacture generic drugs.

The Polish market for pharmaceuticals has been expanding rapidly in recent years. Particularly rapid growth was experienced in 1990 -1998, when the size of the market reached USD 2.6 billion. The market’s development was stimulated by a steady increase in the domestic production of drugs and by dynamically growing imports. A considerable fall in the domestic production was brought by the collapse of exports to eastern markets at the end of 1998 and by the negative influence of the Russian financial crisis in 1999, as well as by confusion created by the reform of the Polish healthcare system launched in

January, 1999.

Potential of Collaboration and Joint Venture The opportunities for Joint Venture and Collaboration were discussed in detail between the members of the Delegation team and the Government / Pharmaceutical industry of Hungary, Poland and it has been agreed upon:

1. On behalf of the Indian Pharmaceutical Industry, the PHARMEXCIL has expressed its keen interest in providing quality Pharmaceutical products such as Bulk Drugs, API, Oncology Products etc. through its member companies to the Hungary, Poland.

2. Indian Pharma Industry will like to assist the Local Industry to increase the number of items produced according to market demand (public and private) in Hungary, Poland and Slovakia. Further the member companies of PHARMEXCIL shall provide the Technical know-how and collaborate with Hungary Pharma Companies to produce these items.

3. Both sides agreed that is very important that technical teams form the Hungary and Poland Drug Regulatory authorities visits the pharmaceutical factories and companies specialized in formulation and raw materials to evaluate the pharmaceutical industries in India. The PHARMEXCIL further offered an official invitation to the team of Hungary, Poland regulatory authorities to visit India in order to evaluate and see the pharmaceutical factories and companies.

4. The cooperation in the field of technical training in pharmaceutical manufacturing both for formulation and Bulk Drug.

5. The PHARMEXCIL seeks cooperation from Hungary, Poland Ministry of Public Health in identifying the mutually agreed companies from India, organizing their plant visits, and if found satisfactory by Hungary, Poland regulatory authorities then These companies should get the benefit of Fast track registration.

6. Sourcing of APIs from India – Quality drugs at cost-effective rates 7. Short term training of personnel of Hungary, Poland at NIPER, India. 8. Setting up of Joint ventures in Hungary, Poland for Hungary, Poland market as well as

EU markets. 9. Manufacture of medical devices & hospital equipments. 10. Cooperation in vaccine production and supply

BUSINESS OPPORTUNIY IN SLOVAKIA

Compared to markets of other European countries, the Slovak pharmaceutical market with its USD$ 328 million turnover is rather small and also drug consumption is low but increases after considering the price level and purchase power. Majority of drugs used in therapy come from abroad and so their prices are on a par with world prices. The fact that Slovakia consumes relatively more generics than the countries of Western Europe, i. e in general less expensive drugs. With the gradual alignment of the Slovakia's demography and health status towards the standards in current EU members, the participation of the thearpeutic categories of drugs will come closer to the EU average. The foreign trade deficit of the Slovak Republic in pharmaceutical products is gradually increasing to us$ 2 Billion billion in 2005. The main reason is the double digit increase in the imports of final products during 1999-2002, mostly original products, stagnating exports, mainly concerning generic drugs also contributes to the deficit. Drugs are the 5th most significant import item in terms of financial volume. The tariff protection of the market with pharmaceutical products and appliances is minimised in Slovakia. Drugs are subject to general customs duty of 10% of the value of the import, although the tariff for absolute majority of imports is zero. This is the contractual tariff for WTO member countries.

The studies of FDI inflow to the countries of Central and Eastern Europe, conducted by SNAZIR, the Slovak Agency for Foreign Investment in co-operation with foreign consultants, show that the most important factors deciding on whether the investor should or should not enter particular investment region, are as follows: economic and political stability, low input costs for research, production and distribution, significant market share and geo-strategic position in the region. The prospect that companies with headquarters in the Slovak Republic can be active on the market with as much as 400 to 500 million of consumers is a very important factor influencing the decision of the investor to set up a business in Slovakia despite that the size of the market is the smallest in the region but Indian companies can make Slovakia as a gateway for the European Market as Slovakia has a EU membership.

Eu enlargement will lead to the facilitation of the trade as claimed by several representatives of pharmaceutical companies. Generic producers are increasingly benefitting from the support of cheaper drugs by governments both in Eastern and Western Europe due to growing public healthcare expenditures, this may be a plus for domestic generic industry in Slovakia. Global pharmaceutical players may find Slovak pharmaceuticals sector an attractive place to invest. Slovakia has made the greatest advancement amongst candidate countries in the legislation convergence and medicine authorization process. The shape of the Slovak pharmaceutical market is determined more by global forces in pharmaceuticals rather than the leve of EU integration. Pharmaceutical industry has been seen as a process of forming mergers and alliances as a result of searching for more diverse drug portfolio, more extensive geographical coverage, more effective marketting policy and benefits of combined R&D capacities.

Indian Pharmaceutical companies can harness the vast potential that the Slovak market offers. Presently India is one of the largest producer of pharmaceuticals in the world. India's Pharmaceutical segment is improving at an unprecedented rate and Pharmaceuticals export is in highest growth. There is potential scope for Indian players in pharmaceutical segment in the Slovak Republic. Slovakia’s compact market of five million opens up unique opportunities for companies to test their products and services. Abundant, highly skilled labour makes it easy to quickly establish operations here, and the low level of competition makes it relatively easy to succeed. Considering these advantages, including the potential for Eastern country in terms of input costs and Western country in terms of advancement, Slovakia should rank at the top of any site list for great business ventures in the newly expanded EU region.

REGISTRATION PROCUDRE IN HUNGARY

Decree No. 32/2005. (VIII.11.) Eü.M. of the Minister of Health on fees to be paid for administration services related to the authorization procedures of medicinal products for human use

The Minister of Health, in exercise of powers conferred him by Sub-section (2), Section 67 of Act 93 of 1990 on fees (hereinafter: Itv.) in agreement with the Minister of Finance hereby makes the following regulations:

1. Section 1

(1) The applicant for conducting procedures and issuing permission, resp. certificate being within the competence of the National Institute of Pharmacy (hereinafter: OGYI) shall to pay administration servic fee (hereinafter: fee) listed in the Supplement for authorization and other procedures.

(2) The fee is to be paid per investigational product and per medicinal product in the cases of the listed procedures of points 1., 2., 4. and 9. of the Supplement.

(3) Establishing the fee in accordance with the Supplement the followings are to be considered:

a) if a homeopathic medicinal product besides the homeopathic component contains an other, non homeopathic (allopathic) component as well, the product regardless from its preparation method is not to be considered homeopathic, therefore the registration fees pertaining to the allopathic products are to be enforced,

b) if a product labelled homeopathic and prepared by homeopathic process is marketed with reference to any therapeutic indication, in respect of this decree is under the same judgment as the non homeopathic products.

2. Section 2

(1) The fee is shall be paid into the account of OGYI No. MNB 10032000-01492695 by cash or postal payment, resp. by transfer

a) with the exceptions included in Paragraph b), when the application is submitted,

b) in cases regulated separately

ba) the 5 yearly renewing fee and the extension fee of the registration in the year of the renewing and extension, at the latest till 30th of July,

bb) the yearly maintenance fee till 31st of January of the subjected year.

(2) The paid fee with the exceptions included in Sub-section (3) is the income of OGYI, and effective regulations on reporting and bookkeeping obligations for institutions managed upon budget belonging to the subsystem of public finance shall apply for recording and seettling of accounts.

(3) From the fees paid for OGYI, for

a) Béla Johan National Epidemiological Center of the National Public Health and Medical Officers Service, 70 % of the administration service fee to be paid for registration and authorization of immunological proproducts defined in separate regulation and for official procedures regarding the distribution,

b) the Ministry of Health, 40 % of the administration fee to be paid for the authorization of clinical trials, resp. the verification of the authorization defined in separate regulation on the clinical trials of the investigational products for human use and the use of the Good Clinical Practice

shall be transferred.

3. Section 3

(1) In the administrative procedure, the party initiating a legal remedy, at the beginning of the procedure shall pay the appeal fee, which is qualified as the income of the Ministry of Health and its scale of charge is equivalent with that of the procedure of the first instance into the account of the Ministry of Health (hereinafter: EüM) proceeding the procedure of the second instance No. MNB 10032000-01491838-00000000 by postal payment or transfer. All fees paid in the legal remedy shall be paid back to the client, if the reviewed decision or measures partly or etirely proved to be illegitimate for the disadvantage of the client.

(2) If in the procedure of the legal remedy, the partly or entirely illegitimate decision or measures of OGYI by the EüM

a) are cancelled, without performing any additional investigation needed to the complition of state of affairs, and the Institute proceeded in the procedure of the first instance are ordered to proceed the new procedure, the new procedure shall be proceeded without further payment,

b) performing additional investigations needed to the complition of state of affairs

ba) are cancelled and the Institute proceeded in the procedure of the first instance are ordered to proceed the new procedure,

bb) are changed,

the costs arose in the procedure shall be paid for the Institute proceeded the procedure in the second instance by the Institute proceeded the procedure in the first instance.

4. Section 4

(1) In respect of the Itv.

a) the origin of the payment obligations as defined in Sub-sections (2)(3) of Section 28,

b) for determination of the circles having payment obligations as defined in the first sentence of Sub-section (1) of Section31 and Sub-sections (2) and (4)(7) of Section 31,

c) the refund of the fee as defined in Sub-section (1) of Section 32,

d) the lapse as defined in Section 86

are to be used as appropriate, but the Office of duties and duty nominated in the Itv. are to be understood as OGYI and fee.

(2) If the fee was not paid at all, or it was paid not in time, way and extent required, Sub-sections (1) and (3) of Section 73/A. and Section 82 of the Itv. are to be used, with exception that duty, findings and Office of duties nominated in the Itv. are to be understood as fee, report and OGYI.

5. Section 5

(1) This Decree shall enter into force on the eighth day following its promulgation, with the provision, that its provisions shall apply in procedures initiated following the date the Decree came into force.

(2) With the entry of this Decree, Decree 79/1999. (XII.23.) EüM. on fees to be paid for administration services related to the authorization procedures of medicinal products for human use, as amended by Decree 11/2001. (IV.9.) EüM., Decree 33/2001. (X.3.) EüM. and Decree 46/2001.(XII. 31.) EüM. shall be repealed.

(signed) Dr. Mária Vojnikpolitical under-secretary of Ministry of Health

a) Supplement to the Decree 32/2005.(VIII.11.)EüM

Fees to be paid for authorization and other procedures of the National Pharmaceutical Institute (OGYI)

1. Non homeopathic preparations1.1. Marketing authorization (assessment, registration)1.1.1. National procedure 1 350 0001.1.1.1. Generics 675 0001.1.2. Mutual Recognition Procedure (MRP)1.1.2.1. As Reference Member State (RMS) 1 800 0001.1.2.1.1. Generics 900 0001.1.2.2. As Concerned Member State 900 0001.1.2.2.1. Generics 500 0001.2. Renewal of marketing authorization (in every 5 years)1.2.1. Case 1.1.1. 675 0001.2.1.1. Case 1.1.1.1. 325 0001.2.2. Case 1.1.2.1. 900 0001.2.2.1. Case 1.1.2.1.1. 450 0001.2.3. Case 1.1.2.2. 450 0001.2.3.1. Case 1.1.2.2.1. 225 0001.3. Yearly maintenance of registration 180 000

1.4. Modification of marketing authorization1.4.1 Type I.(A-B) 180 0001.4.2. Type II. 270 0001.5. Withdrawal of marketing authorization, cancellation of registration 67 5001.6. Immunbiological preparations (allergens)1.6.1. Marketing authorization (assessment, registration)1.6.1.1. By the origin material (one component) 45 0001.6.1.2. Mixed allergens (multi components) 315 0001.6.2. Renewal of marketing authorization (in every 5 years) 180 0001.6.3. Yearly maintenance of registration 45 0001.6.4. Modification of marketing authorization1.6.4.1. By the origin material (one component) 9 0001.6.4.2. Mixed allergens (multi components) 45 0001.6.5. Withdrawal of marketing authorization, cancellation of registration 45 0002. Homeopathic preparations2.1. Marketing authorization (assessment, registration)2.1.1. Preparations of single-ingredient 2.1.1.1. The nominated active component can be found either in the

European Pharmacoeia or in any other Pharmacopoeias used by the member states of the European Union

67 500

2.1.1.2. The nominated active component can be found neither in the European Pharmacoeia nor in any other Pharmacopoeias used by the member states of the European Union

270 000

2.1.2. Preparations of multi-ingredients2.1.2.1. Combination of ingredients described in 2.1.1.1. 135 0002.1.2.2. Combination contains ingredient described in 2.1.1.2. as well 180 0002.2. Renewal of marketing authorization (in every 5 years) 45 0002.3. Yearly maintenance of registration 9 0002.4. Modification of marketing authorization2.4.1. Preparations of single-ingredient 9 0002.4.2. Preparations of multi-ingredients 90 0002.5. Withdrawal of marketing authorization, cancellation of registration 27 0003. Paramedicinal preparations3.1. Registration, marketing authorization 450 0003.2. Extension of registration (in every 5 years) 90 0003.3. Modification of registrartion 90 0003.4. Change of qualification to medicinal product 405 0004. Clinical tests of investigational products4.1. Approval of clinical trial 450 0004.2. Modification of approval for clinical trial 90 0005. Manufacturing licence5.1. Inspection of the manufacturing site 450 0005.2. Issuing of manufacturing licence 225 0005.3. Modification of manufacturing licence 90 0006. Licence for wholesaling6.1. Inspection of the wholesaler’s site 360 0006.2. Licence for wholesaling 90 0006.3. Modification of the licence for wholesaling 90 0007. Inspection of labs performing safety tests of investigational products

regarding the aspects of the Good Laboratory Practice and issuing 382 500

the relevant certificate8. Issuing certificate of GMP compliance of manufacturer for products

authorized in Hungary. Occasionally and by products.22 500

9. Other procedures9.1. Extension of expire date of certain manufacturing batches 27 0009.2. Granting permission for alteration from marketing authorization in

case of certain manufacturing batches27 000

9.3. Scrutiny of packaging materials 27 00010. Registration of medical representatives, issuing identification cards 13 50011. Expert activity, consulting, consultation fee/hour 8 000

PHARMA REGISTRATION IN POLAND

1.  Average time taken for registration of generic products in Poland is about 2 years

2.  Av cost of generic registration is 13 390 PLN 3.  Any changes being brought in the regulatory framework:- after EU accession Poland may take part in European registration procedures (centralized procedure and mutual recognition procedure). This is very convenient and faster way of registration on new products. - Polish national agency is planned to be changed into independent structure beginning of 2007. This should allow to employ more staff and make the registrations faster.- The biggest problem for all pharmaceutical companies regulatory side is now very long time of variations processing. The reasons are following: very demanding law regulations and lack of staff in the agency. The simplified pharmaceutical law is written, now it is under consultations. We hope that it will come into force beginning of 2007. 4. There are some of Indian pharma companies on the Market (e.g. Stridess Acrolab acquired small factory in Warsaw) but only three of them have sales in National IMS data.   

 Sale 2005 mln USD

PPG vs. 2004

Mktsh % USD*

RANBAXY 8 022 588 6% 0,18% HIMALAYA DRUG 376 092 25% 0,01% TORRENT 320 725 27% 0,01%* Total Polish Pharmaceutical Market

REGISRATION PROCEDURE FOR SLOVAKIA

Additional requirements for submission of the MRP and DCP dossier in the Slovak republic

1. The State fee has to be paid prior the submission of the application (Act No. 140/98 §21a) par. 3), about the medicinal product and medical devices. The applicant should submit the application form for the registration (renewal or variation) at the State Institute for Drug Control (SIDC) in order to get a reference number for the application. The reference number will be the Variable symbol for the bank transfer. After bank transfer, the applicant should submit the confirmation form of the payment which is published on the http://www.sukl.sk/payment_reg.doc . In the case, that the bank transfer has not been realized, the applicant should submit the confirmation of the transfer and within the 5 working days it is necessary to submit the confirmation of the successful bank transfer to the SIDC.A NEW SYSTEM FOR PAYING OFF THE STATE FEE IS BEING PREPARED AND

WILL BE UPDATED.

2. The application form should be submitted together with the Attendance letter for a registration dossier of medicinal product with the relevant information filled in the Slovak language (application form & Attendance Letter are published on the http://www.sukl.sk/ziadmrp.doc , http://www.sukl.sk/mrp_list.doc , http://www.sukl.sk/dcp_list.doc http://www.sukl.sk/zmeziadmrp.doc , http://www.sukl.sk/zmepokmrp.doc , http://pharmacos.eudra.org/F2/eudralex/vol-2/C/mr-renewal-form_2005_12.doc).

3. The proposed SPC, PIL, Labeling and colored Mock -ups should be submitted in Slovak language (according to the Act. No 140/98 §21 par.4 k) l) and m), about the medicinal product and medical devices), within five days after the national implementation phase has started. The SPC, PIL, Labeling should be in line with current version of QRD published on: http://www.emea.eu.int/htms/human/qrd/qrdtemplate.htmThe SPC, PIL, Labeling and the colored Mock -ups should be submitted in a paper copy and electronically as well. „Mock–ups“ are requested only for those pack sizes, where within the MA a SUKL code is granted.

4. Declaration of an identicity of the dossier in RMS and all CMS (including the Slovak Republic) – original, should be signed by the MAH in RMS resp. by the applicant in the Slovak Republic (the Act No. 140/98 §22a) par. 4, about the medicinal product and medical devices)

5. The certification of incorporation of the applicant – company (copy) and the future Marketing Authorization Holder (MAH) in business register (original or verified copy). Original or verified copy of business register is necessary to submit only in the case, that the applicant and the future MAH (if different) submit the application form for registration process via MRP/DCP for the first time in the Slovak Republic. To the contrary, it is sufficient to submit the copy of the business register of the applicant and the future MAH.

6. Copy of GMP certificates and Manufacturing authorizations:

• if the manufacturing site is in the EU, EEA (Norway, Iceland, Lichtenstein),or in countries, to which an appropriate MRA refer to ( Canada, Australia, New Zealand, Japan, Switzerland):

 - copy of manufacturing authorization from EU, EEA or MRA countries – not older than 2 years and- copy of GMP certificate from EU, EEA or MRA countries – not older than 2 years, if the GMP is not already a part of manufacturing authorization.

• if the manufacturing site is outside the EU (third countries):

- original or verified copy of manufacturing authorization from the competent authority from the relevant country -  not older than 2 years and- original or verified copy of GMP certificate issued by country from EU, EEA or MRA – not older than 2 years

7. Statement for the MA transfer to local subsidiary (if relevant).

8. In case of submitting registration dossier for several strengths, were a part of the documentation for all these strengths is identical (usually Module 2-5), applicant should submit Module 1 for each of the applications in a paper copy and one paper copy of Modules 2-5. In this case Modules 2-5 have to be submitted electronically as well (on a CD).

COMPARISON OF DRUG PRICES In US$

Drug Dosage India Hungary Poland Slovakia

Ciplofoxacin 500 Mg 0.64 18.00 16.00 15.10

Diclofenac 50 mg 0.18 1.35 1.50 2.70

Ranitidine 150 mg 0.13 5.48 5.25 6.10

• Lipitor 10 mg 0.17 2.41 2.10 3.21

• Omezprazole 20 0.11 3.53 3.70 4.25

• Plavix 75 0.02 4.25 4.46 5.12

• Zantac 150 0.35 2.10 2.25 3.10

• Zocor 20 0.50 4.25 4.70 5.17

• HEP B 0.75 4.50 5.10 5.50

• R Human Insulin 100 IU 0.75 2.50 3.10 4.70

• Rotavirus Vaccine 0.50 27.00 29.00 33.00

Conclusion

India can climb to single digit position. Hungary, Poland and Slovakia can outsource international quality medicines from

India at almost half the prices Hungary / Poland / Slovakia can access large trained manpower for quality health

services EU registration is must for the companies For Slovaikia, Tie-up with local distributor and sell your own products.

The Delegation team has been able to identify specific areas for JV/Collaboration/Co-operation which will pave way for further co-operation.

PHARMEXCIL Government and Industry would welcome partnerships with Hungary and Poland to compliment each other in providing access to affordable, quality medicines and Healthcare