The countries that have recently joined the European Union offer great opportunities for growth for drugmakers, according to a new study published by Frost and Sullivan.

The analysts claim that the healthcare sector in the “new” countries – Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia – is expanding vibrantly, “in contrast to subdued growth in the pharmaceutical markets of the former 15-state EU.” While the latter has been increasing 8% annually, the market in the new countries has been growing at the rate of 16.5% over the past five years, “offering exciting growth opportunities to pharmaceutical and biotechnology companies,” the report notes.

Furthermore, the new EU countries now need to make significant, long-term investments in order to change their healthcare systems and bring them into line with the rest of the Union so “growth prospects in the region are expected to be considerable.”

F&S also notes that “propelled by the twin advantages of low costs and easy patient recruitment,” the new EU states “offer tremendous scope for conducting clinical trials.” On the financial side, there are a lot of highly qualified investigators in these countries who earn considerably less than their western counterparts.

Moreover, with wages in the “new” EU countries at a quarter of those in the west, “pharmaceutical companies have been able to avoid their single largest cost – the opportunity cost of a delay in getting a drug to the market” and the analysts claim that such delays work out to a daily loss of $1 million.

The expansion of the EU has highlighted major differences in prices and problems of parallel imports, and Raju Adhikari, F&S’s pharmaceutical-biotechnology analyst, says that “companies need to present compelling health economic data justifying a product’s price and retain premium pricing in friendlier markets.” He added that getting into these markets will not be easy and big pharma does not dominate in them as it does in the old EU and the USA.

The report concludes by noting that the top position in four of the new EU countries is held by a local firm so, acquiring one would offer a means to gaining a foothold.