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Friday, December 16, 2016 - 11:11
14 December 2016
Ognian Donev is Chairman of the Board of Directors and Executive Director of the pharmaceutical company Sopharma. He is also Chairman of the International Chamber of Commerce for Bulgaria, as well as Chairman of the Board of Trustees of the Medical University, Sofia. He is also the publisher of Club Z media.
On the last day of November, the Confederation of Employers and Industrials in Bulgaria (KRIB) and Economy Magazine awarded him with the statuette “The Fisherman and the Golden Fish” and proclaimed him “Mr. Economy 2016”.
We talked about the challenges in the pharmaceutical industry in Bulgaria and the new horizons in front of Sopharma.
Mr. Donev, you received the award “Mr. Economy” after a difficult year for Sopharma. Do you consider it a personal recognition or an assessment of the positive development of Bulgarian pharmaceutical manufacture in a crisis year?
It is true that this year was interesting, associated with turbulences on most of the markets we operate in. At the same time, despite of the slight drop of the sales, the year will end as one of the most successful ones for Sopharma in terms of profit. We have published the results for the first nine months and they show that the year will be much better than the previous 2015.
Does this mean you have overcome the problems due to the devaluation of Russian currency and the embargo for export of goods from European markets to Russia?
The embargo has no relation to the delivery of medicines. Currency problems cannot be overcome easily. It seems as if consumers got used to the new proportions and exchange rate of the ruble and respectively, to the increase of the price which comes with the decrease of its value compared to the major currencies. It is unpleasant that the whole import became more expensive but it is something people get used to. The problem is that we cannot predict when the next price shock will happen and what the behavior of local currencies on the markets we operate in will be.
Given this situation, do you plan to turn to other markets?
We have taken this decision long ago but in our industry the realisation does not happen overnight with a magic wand. Reorientation of sales is related to registration of products, issuance of authorisations and other administrative procedures which require time and good preparation. Otherwise, the movement is generally from the traditional Eastern markets towards the West. We have positive examples as well; one of the first registrations we managed to finalise was in Austria. Currently, we already have a registration in Scandinavia, as well as in the Netherlands. In other words, Sopharma’s transition towards the world market is an ongoing process.
This past 2016 was a year of mergers and acquisitions of large corporations, including in Bulgaria regarding the transaction between Teva and Actavis. What is the possibility of Sopharma also becoming a part of a multinational company or of the company itself to turn into a global player?
Sopharma is even now a strong regional manufacturer. We continue working on the projects for mergers with other companies from the group. We have also announced to the Financial Supervision Committee the additional purchase of Unipharm shares and this week we are going to make a tender offer to the rest of the stockholders about purchasing their shares. We have convinced the investment community with our behavior that we are an acquiring company rather than being of interest for other firms. Sopharma is a publicly listed company and there is always an option for somebody to buy us but so far we have been the more active ones and we haven’t received any serious proposition for the acquisition of Sopharma.
Is this going to be the biggest challenge for the company during the next 2017?
In another interview I have already admitted that 2017 is not going to be a revolutionary year. In our company revolutions happen after a lot of preparation and that is why the coming year will be a period of preparation for events which will take place later. The breakthrough we hope to achieve in the near future is to put the original Bulgarian product Tabex on the world market. The path of its establishment goes through registration in the FDA (Federal Drug Agency) which requires performing a present-day clinical trial. Tabex has already undergone one in Bulgaria but it is not sufficient and therefore an up-to-date trial will have to be carried out, most probably in a country in Western Europe or in the USA. Soon, a publication on the topic will appear in the authoritative magazine New Journal of Medicine with the results from trials on Tabex performed in New Zealand, which are very encouraging.
A common market for drugs between Bulgaria and Romania has been established recently. Is there any effect from the signed agreement on local pharmaceutical manufacturers?
Rather not. The agreements would refer mainly to expensive medicines which automatically excludes the Bulgarian ones which are one of the cheapest medicines. Otherwise, the Romanian Ministry of Health orders medicines from us and we are manufacturing for them. Recently, we had to help the Hungarian and the Serbian markets as well. Considering the overall lack of funds that could be allocated for healthcare, it is normal for the countries to look for opportunities to reduce the prices. We welcome the idea of minister Moskov and we hope that it will be realized indeed. But it should be clear that the change is difficult to achieve because there is no way to skip the regulations existing on the local markets.
The withdrawal of generic medicines from Bulgaria causes further problems. Doesn’t maintaining low prices cause us too many problems?
This is a measure to provide good access to medicines with a scarce public resource. We have the lowest prices or prices equal to the lowest ones and a product of ours which is being reimbursed, usually sets the lowest point of the price and the others level with us. Sometimes I even joke that even if we didn’t exist, they had to create us because we act as an anchor which doesn’t allow others to go a lot higher. Another positive change was the price corridor because this was also a measure which would save public expense.
The “corridor”, however, will be permanently canceled on a proposal from the Ministry of health itself due to concerns that it would also provoke withdrawal of drugs from the market…
This corridor works when a group of drugs with one INN includes many products. If there are, for instance 10 interchangeable drugs in it, dropping out of two or three of them would not cause any problems.
Then, did the government manage to implement the pro-generic policy promised at the beginning of the mandate?
Not fully, but it took first steps towards the right direction. Even the fingerprints, so criticised by people, are a good measure for economy of public resource and for prevention of abuses.
What more do you expect to happen in this direction?
That the real health care reform begins.
What is your assessment of the pharmaceutical industry during this past 2016?
The positive thing from our point of view is that we managed to keep the jobs and provide a relatively good remuneration for Bulgaria. The process of concentration here has continued. Like everywhere in Europe, problems remain, funds are not enough. Health care systems and financing of medical institutions is something individual countries cannot cope with. Countries like Germany, England and France cannot manage, let alone small Bulgaria.