Bulgaria: Medical & Pharma Sector InvestBulgaria Agency

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Bulgaria:

Medical & Pharma Sector

YOUR MOVE

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W H Y

Bulgaria?

1. Opportunities for production of low-priced generics in the country due to low manufacturing costs

2. Expensive surgical operations can be successfully and costly carried out in Bulgaria

3. High growth potential of the pharmaceutical and medical equipment markets (15-20% per year)

4. Opportunities for carrying out dental tourism, already successfully explored in Central Europe, due to existing high

quality and price competitiveness of dental services in the country

5. Though the major local pharma companies have already been acquired by foreign players, there are consolidation

opportunities for strategic investors to gain a foothold or bolster existing presence in the region

6. Opportunities for carrying out repackaging and re-labeling of pharmaceuticals/medical devices

L AT E S T

deals

Vendor

Investor

Target

Size (EUR m)

Greenfield Tokushukai Medical Corp. (Japan) Construction of a multi-functional high-tech hospital 90 Intervet Biovet Buyout of feed additives business of the animal healthcare firm Intervet, part of Akzo

Nobel

22.5 Greenfield Chaikapharma Pharmaceuticals repackaging plant 7.7 NIHFI Sopharma Sopharma integrated its chemical and pharmaceutical research institute into the parent

company

5.1 Greenfield Sopharma Pharmaceuticals plant 3.0 Greenfield GlaxoSmithKline (UK) Multi-Market Warehouse (distribution center with repackaging facility) 2.5 Greenfield Doverie Obedinen Holding Hospital construction and medical equipment supply 1.4 Brownfield Doverie Obedinen Holding 5-year non-collateralized Euro bond issuance to finance the construction and medical

equipment supply for the hospital in Sofia (annual coupon - 6.75% paid semi-annually)

1.4 Acquisition of

minority stakes

Sopharma Stakes in 3 pharma distribution companies - Global Medical (9% stake), Kaliman RT and Ceiba (9.99% in each)

Undisclosed Actavis Biovet Acquisition of the veterinary drug production plant in Razgrad Undisclosed Libra Phoenix (Germany) Acquisition of the Bulgarian drug wholesaler Libra Undisclosed Higia Actavis Conditional acquisition of Higia, Bulgaria’s largest pharmaceutical distributor Undisclosed

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M E DI C A L / P H A R M A

Fact Sheet

Healthcare

About healthcare in Bulgaria

One of the first countries in Europe and the world to institutionalize drug regulation and control; More than 33,600 doctors in Bulgaria;

Approximately 7,000 certified dentists;

About 4,000 dental offices and 500 dental labs throughout the country; 1,140 patients per dentist;

Estimated growth rate of the dentistry market in Bulgaria for the 2004-2008 period is approximately 20% per annum

Pharmaceuticals, medical and dental equipment and devices

Sources: Bulgarian Drug Agency, CEEBIC

Case studies

GlaxoSmithKline (UK)

ERGO Hospital (Greece)

Multi-Market Warehouse (MMW) in Sofia

MMW is a distribution center with production facility for repackaging Investment value: EUR 2.5 million

Officially opened on November 2, 2004

Innovative technology production facility for customizing the secondary package, providing the served markets with consignments of products with local language packs Serves 12 markets and 55 distributors in the region Eastern Europe, Caucasus

and Central Asia

Manages stock and negotiates production programs with 25 production sites in Europe, America, and Australia

Modern and high-technologically equipped - flexible warehouse management system based on SAP ERP and Radio Data Network

Dispatches 150 to 200 orders per week and stores almost 1000 palettes Operates under the control of GSK Quality Management System, based on GMP

ERGO Hospital (Greece) is one of the main producers and suppliers of medical equipment and devices for haemodialysis and manages six medical centers The Bulgarian entity of ERGO Hospital is Biocheck Ltd

Medical Center Biocheck was established in 1999. It is 100% Greek investment of more than USD 1.4 million

The amount of reinvestment is USD 150,000

Biocheck is the first private medical institution in Bulgaria in the field of diagnostic medicine

More than 67 high qualified specialists work at Biocheck

Biocheck has hi-tech equipment in the fields of radiological diagnostics, functional gastroenterology, functional cardiology, laboratory diagnostic, dentist and laser procedures

ERGO Hospital was attracted to Bulgaria by the high professional qualification of Bulgarian specialists although there is not enough high technology equipment

Tokushukai Medical Corp. (Japan)

Actavis (Iceland)

Tokuda multi-functional high-tech hospital in Sofia

Project value: USD 110 million Planned to be operational in mid 2006 Tokushukai’s first hospital outside Japan Planned to be operational in mid 2006 Will employ 1,225 medical professionals

1000 beds, 16 clinical departments, 11 surgery rooms Ultra-modern diagnostic center, state-of-the-art equipment Connection to long-distance consultation and therapy network systems

in Japan

Actavis Group (former Pharmaco) operates in 29 countries and employs over 7,000 people

Actavis AD (Bulgaria) is one of the largest companies within Actavis Group Actavis AD is headquartered in Sofia and operates three manufacturing plants in

Dupnitza, Troyan and Razgrad

The Bulgarian subsidiary produces over 200 pharmaceutical products covering most significant therapeutic classes for human use

Actavis AD is one of the biggest employers in Bulgaria, with about 2,700 employees Actavis AD is one of the major suppliers of finished pharmaceuticals to the

former Soviet Union and a significant exporter of active pharmaceutical ingredients (APIs) for veterinary use to more than 50 countries

State budget spending on healthcare, 2003

4.3% 6.2% 8.2% 0% 2% 4% 6% 8% 10%

Bulgaria CEE average EU-15

Pharmaceutical market volume, EUR m 297 317 360 0 100 200 300 400 2002 2003 2004

Medical equipment market (Total USD 165 m) European producers 77% Local producers 3% US producers 20%

End-user market of dental equipment and devices Medical Universities 10% Dental clinics in regional hospitals 1% Private dental clinics 89%

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Legal

4.1. Pharmaceuticals manufacturing authorization

Competent authority Bulgarian Drug Agency

Purpose Starting production of pharmaceuticals

Requirements and conditions

Required documents:

1. Application form;

2. Name and address of firm’s management;

3. Location of premises for production, control and preservation of pharmaceuticals; 4. List of pharmaceuticals and forms to be produced;

5. Documents certifying the competence of the managers responsible for production and quality control; 6. Certificate for firm’s court registration;

7. Environmental impact assessment of production according to the Environment Protection Law;

8. Permit for use of premises for production, control and preservation, issued according to the Spatial Planning Law.

If the application refers to manufacturing of radiopharmaceuticals, a permit by the competent state authority for safe use of atomic energy for peace is required. If the application refers to manufacturing of narcotic substances and medical devices containing such substances the requirements of the Control over the Narcotic Substances and Precursors Law have to be observed.

Time frame 3 months

Cost (Fees) BGN 10,000

BGN 800 for producers executing different steps of the manufacturing process BGN 450 for license variations

Legal grounds

(Laws and Regulations)

Pharmaceuticals and Pharmacies for the Human Medicine Law Ordinance No.12/2001 on the Good Practices in Production of Pharmaceuticals, issued by the Minister of Health

4.2. Accreditation of medical establishments

Competent authority The Minister of Health upon a proposal by the Accreditation Council Ad-hoc Expert Commission for Valuation

Purpose Conditions and procedure for implementation of accreditation of medical establishments

Medical establishments have the obligation to start a procedure for accreditation not later than 6 months after registration. The director of the medical establishment upon the approval by the Board of Directors creates a medical board for self-valuation. The director files the approved report to the medical board to the Minister of Health to start procedure for accreditation. Accreditation assessment of activities are made for the period of one to five years.

Requirements:

1. Report by the medical board for self -valuation

2. Decision for implementation of the procedure for accreditation 3. Program for management and development of medical establishment 4. List of experts involved in valuation

5. List of experts working at the medical establishment

Cost (Fees) The amount of costs for accreditation is defined by a contract between the Minister of Health and the applying medical establishment. The amount should be paid at least 7days before the start of the procedure.

Legal grounds

Medical Establishments Law

Ordinance for the criteria, indicators and methods for accreditation of medical establishments

4.3. Medical establishments for hospital care

Competent authority Minister of Health

Purpose Foundation and registration of medical establishments for hospital care

Prior registration as a trade partnership or cooperation is required. The applying entity must perform hospital care activities only and files an application to the Minister of Health to start procedure for issuance of permit for carrying out activities.

Requirements:

1. Court decision for registration; Certificate for current court registration; Unified identification code;

2. Constituting act of the applying entity and regulations for structure, activity and internal order of the medical establishment;

3. Certificate of registration in the District College of the Bulgarian Physician’s Union or the Union of the Dentists in Bulgaria for the doctors or dentists who will manage the establishment;

4. Permit for use of premises as medical establishment;

5. Diploma for higher education of the person who will manage the establishment; 6. List of the members of the executive and controlling bodies;

7. Certificate by the District Center of Health Care where the medical establishment is located.

All medical establishments are subject to accreditation which is not a necessity for carrying out medical activities.

Cost (Fees) BGN 5,000 – 50,000 depending on the type of trade partnership registered

Legal grounds

Law for the medical establishments

Ordinance for the basic requirements to which the structure, activity and internal order of the hospital establishments , dispensaries and social welfare homes should correspond

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4.4. Medical establishments for non-stationary care and hospices

Competent authority The respective regional center of health care on whose territory is located the medical establishment

Purpose Registration of medical establishments for non-stationary care and hospices

Prior registration as a trade partnership or cooperation required according to Bulgarian legislation.

To start the procedure the legal entity files an application to the respective regional centre of health care on whose territory is located the medical establishment.

Requirements:

1. Court decision for registration; certificate for current court registration; Unified identification code. 2. Management by a master-physician; diploma for proper education of the people involved in health care giving.

3. Certificate for entry in the register of the district college of the Bulgarian Physician’s Union or the Union of the dentists in Bulgaria for the doctors and dentists who will manage, respectively work in the establishment

4. The permit for using the premises as medical establishment or a conclusion of the Regional Inspection for Protection and Control of the Public Health.

Time frame Not defined

Cost (Fees) BGN 5000-50000 depending on the type of trade partnership registered

Legal grounds

Law for the Medical Establishments

Ordinance for Keeping a Register of the Medical Establishments for Non-Stationary Care and Hospices

4.5. Sales Permit

Competent authority Bulgarian Drug Agency (BDA)

Purpose Prerequisite for sale in the country

Sale permit is not required for pharmaceuticals produced in Bulgaria. It is necessary in the following cases: 1. Import of pharmaceuticals;

2. Vaccines, toxins, sera, biotechnology products and human plasma products manufactured in Bulgaria; 3. The first three batches of medicinal products which have received marketing authorization; 4. The first three batches following identification of nonconformities with the quality requirements. Remark: Before obtaining a sale permit marketing authorization is required.

The pharmaceuticals producer/importer or his/her representative can apply.

2. Batch certificate of quality for each batch, issued by the producer;

3. Certificate for release of the batch issued by the competent authority of the country of the producer (in case of import of vaccines and human plasma products)

4. Copy of the permit for import of narcotic substances or medicinal products containing such substances issued by The National Drug Control Council under The Ministry of Health.

On its discretion BDA may conduct analyses before issuing sale permits for vaccines, toxins, sera, biotechnology products and human plasma products.

Time frame 30 days

60 days for vaccines, toxins, sera, biotechnology products and human plasma products

Cost (Fees) BGN 15 for each batch

Legal grounds

Law for the Pharmaceuticals and Pharmacies for the Human Medicine

Regulation No.29/2000 on The Conditions and Order of Issuance of Sale Permits for Pharmaceuticals, issued by the Minister of Health

4.6. Marketing Authorisation

Competent authority Bulgarian Drug Agency

Purpose Prerequisite for production, import, export and trade of pharmaceuticals in the country

Only the pharmaceuticals producer or his/her representative can apply.

A foreign producer can apply if he has permanent representative on the territory of the Republic of Bulgaria.

2. Registration dossier containing administrative, pharmaceutical, pharmacological – toxicological and clinical data, specified in regulation, issued by the Minister of Health (Regulation No 17/2001). The registration file should be presented in Bulgarian, English or Russian language.

3. For non-local producers have to be presented also:

a) A certificate for the medicine product issued by the specialized state body for control over the medicines in the country of production certify-ing the compliance of the conditions of production, control and preservation with the requirements of the Good pharmaceuticals production practice;

b) Marketing authorisations issued by the country of production; c) Information about other marketing authorisations.

Time frame Max 7 months

Cost (Fees) BGN 200 – 3800

Legal grounds

Law for the Pharmaceuticals and Pharmacies for the Human Medicine

Ordinance No.17/2001 on the Requirements to the Documentation for Permitting Use of Pharmaceuticals, Issued by the Minister of Health

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C O M P E T I T I O N A N D

partners

5.1. Top pharmaceutical manufacturing companies

Company

Activity

Net sales

(EUR ‘000)

Number of

employees

Year

1 Actavis AD (Sofia) Pharmaceuticals 58,700 2,700 (‘05) 2004

2 Sopharma (Sofia) Pharmaceuticals and biotech 57,372 1,700 2004

3 Biovet (Peshtera) Pharmaceuticals and food biotech 25,467 1,200 (‘05) 2004

4 Eurostock (Sofia) Instant drinks and vitamins 8,160 280 2004

5 Unipharm (Sofia) Solid and liquid drugs 6,472 200 2004

6 Bul Bio NCZPB (Sofia) Human medicines and in-vitro diagnostic medicine products

4,176 326 2004

7 Vetprom (Radomir) Veterinary and human medicinal products, synthetic substances, cosmetic goods

2,551 287 2004

8 Inbiotech (Sofia) Pharmaceuticals and chemical pharmaceutical preparations

1,353 10 2004

9 Tomil Herb (Sofia) Herbal pills 1,287 10 2004

10 Biopharm Engineering (Sliven) Veterinary medicinal products 1,010 n.a. 2004

5.2. Manufacturers of medical and dental equipment and devices

Company

Activity

Net sales

(EUR ‘000)

Number of

employees

Year

1 Medica (Sofia) Medical dressing materials 5,958 680 2004

2 Salvamed (Sandanski) Medical dressings 4,882 188 2001

3 Momina Krepost (Veliko Tarnovo) Medical devices for single use 3,016 205 2004

4 Etropal (Etropole) Medical devices for single use 2,695 246 2004 5 Berchtold Bulgaria (Sofia) Manufacture of medical electronics, lathed and cut

parts for surgical lamps and tables and autonomous gas installations

1,768 44 2004 6 Art Colenta Bulgaria (Sofia) Medical equipment 1,327 36 2004 7 Medical Equipment (Sofia) Medical, pharmaceutical, dental and physiotherapeutic

equipment, hospital furniture

905 298 2004 8 Centillion (Sofia) Medical equipment 844 31 2004 9 Optela - Optic Technologies (Plovdiv) Industrial CO₂ lasers systems and laser optics 508 107 2004 10 Dimson (Sofia) Lens and rims for spectacles 364 26 2004 11 Gama Proekt JSC (Gabrovo) Manufactures surgery and reanimation equipment,

dental equipment, instruments

358 186 2003 12 Intergalenika (Plovdiv) Medical devices (Concentrates for hemodialysis) 179 14 2003 13 Optica Laser (Sofia) Manufacture of laser systems for surgery, dentistry and

physiotherapy

137 11 2002 14 Ochna Optika i Korektsiya (Sofia) Optics and eye correction 112 32 2004

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6.1. Educated workforce

University / College

Location

Majors

U1 Medical University – Sofia http://mu-sofia.bg

Sofia Health care Health management Medical rehabilitation and

ergo therapy

Medicine Pharmacy Dentistry

U2 Medical University - Plovdiv

http://meduniversity-plovdiv.bg Plovdiv Medicine Dentistry Pharmacy U3 Medical University www.vmi-pl.bg Pleven Medicine Health care U4 Medical University - Varna

www.mu-varna.bg Varna Medicine Health care Health management Public healthcare Nurses Dentistry U5 Trakia University www.uni-sz.bg

Stara Zagora Veterinary medicine Medicine C1 Medical College of Sofia

http://med-college.internet-bg.net

Sofia Assistant pharmacist Dental mechanics Masseur

Medical laboratory technician Midwife Nurse Rehabilitation therapist Sanitary inspector Social assistant X-ray technician C2 Medical College of Plovdiv

http://medcollege-plovdiv.org

Plovdiv Nurse Midwife

Medical laboratory assistant Assistant pharmacist

X-ray laboratory assistant Dental mechanic Sanitary inspector C3 Medical College of Pleven

www.digsys.bg/eunetweb/colleger

Pleven Nurses

Laboratory Assistants

Obstetrician Remedial gymnast C4 Medical College of Varna Varna Nurse

Midwife

Medical laboratory assistant Assistant pharmacist

Sanitary inspector X-ray laboratory assistant Dental mechanic C5 Medical College of Shumen Shumen Nurse

Midwife

Social worker C6 Medical College of Dobrich Dobrich Nurse Rehabilitation therapist

6.2. Sector-related exhibitions in Bulgaria

Exhibition name

Location (City)

Dates

Frequency

For more info

OPTO, PHOTO & VIDEO SALON

(Optics, photography and video equipment)

Inter Expo Center (Sofia) 7 – 10 Apr 2005 Annually www.bulgarreklama.com

BULDENTAL

International Specialized Exhibition for Medical Techniques, Intensive Care, Diagnostics, Surgery, Hospital Equipment, etc.

Bulgarreklama International Exhibition Centre (Sofia)

11 – 14 May 2005 Annually www.bulgarreklama.com

BULMEDICA / BULDENTAL

International Healthcare Exhibition - Dentistry

ORTHOPAEDY & REHA EXPO

(Orthopedics & Rehabilitation Expo)

MEDICUS, DENTO, GALIENA (International Exhibition of Medicine, Dentistry and Pharmaceuticals)

International Fair Plovdiv (Plovdiv) 19 – 22 Oct 2005 Annually www.fair.bg

WO RT H

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U S E F U L

contacts

Organization

Phone

Web site

Ministry of Health +359 2 930 1107; +359 2 981 1830 www.mh.government.bg

Parliamentary Health Commission +359 2 987 1531 www.parliament.bg/komisii/z/ (Bulgarian only) Bulgarian Drug Agency +359 2 943 4046 www.bda.bg

National Health Insurance Fund +359 2 965 9203; +359 2 965 9157 www.nhif.bg National Center for Health Information +359 2 951 5302; +359 2 951 5303 www.nchi.government.bg Bulgarian Red Cross +359 2 816 4755; +359 2 816 4753 www.redcross.bg National Center of Infectious and Parasitic Diseases +359 2 944 6999 www.ncipd.org

Executive Agency for Transplantation +359 2 813 5010 www.bultransplant.bg (Bulgarian only) National Council for Narcotics +359 2 937 75 72 www.ndc.government.bg (Bulgarian only) National Center of Public Health Protection +359 2 954 9390 www.ncphp.government.bg

National Committee of AIDS and STIs Prevention at the Council of Ministers +359 2 930 1107; +359 2 981 1830 www.ncaids.government.bg (Bulgarian only) National Centre of Radiobiology and Radiation Protection (NCRRP) +359 2 862 1123; +359 2 962 3947 www.ncrrp.org

National Oncology Center +359 2 971 4898 www.onco-bg.com (Bulgarian only) National Center for Addictions +359 2 831 9015; +359 2 832 6136 www.ncn-bg.org (Bulgarian only) “Children Medical Treatment Fund” Center +359 2 952 6943 www.cfld-bg.com (Bulgarian only) Bulgarian Medical Association +359 2 954 1169; +359 2 954 1126 www.blsbg.com

Union of the Dentists in Bulgaria +359 2 986 3490 www.ssb-bg.org Association of Bulgarian Pharmaceutical Manufacturers +359 2 970 0319; +359 2 971 4835 www.abphm.bg

U S E F U L

sites

Organization/Source

Web site

Bulgarian medical web portal www.medicalbg.com Bulgarian Medical Journal www.bgmed.com Bulgarian Mountain Rescue Service http://pss.bglink.net

BGMEDICINE – Medical database for patients www.bgmedicine.info (Bulgarian only) “Specialized Hospitals for Rehabilitation – National complex“ EAD www.rehabilitatzia-bg.com (Bulgarian only) The International Federation of Red Cross and Red Crescent Societies www.ifrc.org

Bulgarian health web-portal - The International Healthcare and Health Insurance Institute www.zdrave.net Multiprofile Hospital for Active Treatment and Emergency Medicine “N.I.Pirogov” www.pirogov.net

University Hospital “Queen Giovanna” www.hospital-queen-giovanna.org Alexandrovska Hospital www.alexandrovska-hospital.org Multi-profile hospital for active treatment “St. Joan Rilski” http://rilski.com

Fifth Multifunctional Hospital for Active Treatment – Sofia www.fifth-city-hospital.org Hospital “Lozenets” www.lozenetz-hospital.org USAID Bulgaria Health Reform Project www.health-bg.org

“Specialized Hospitals for Rehabilitation – National complex“ EAD www.rehabilitatzia-bg.com (Bulgarian only) Bulgarian web portal in drug addiction http://narkomania.start.bg/ (Bulgarian only) European Monitoring Centre for Drugs and Drug Addiction www.emcdda.eu.int