Polish Drug Industry Privatization By Fall

3 March 1997

Polish Treasury sources have indicated that it is hoped to complete theprivatization of two drug companies in the Polfa group - Polfa Krakow SA and Polfa Rzeszow SA - by the fall of this year. And by year-end, it is expected that Polpharma SA of Starogard Gdanski, PZF Polfa of Poznan and Polfa Tarchomin will also have been sold off to investors, with 15% of the equity left with the workforce and 5% with the government.

Only two Polish drugmakers have so far moved towards privatization: the Kutno-based Polfa plant, which belongs 49% to the USA Enterprise Investors fund and to Polish institutions, with the balance held by small investors; and Jelfa SA, in which small investors also have a 40% stake, though the state retains 60% of this firm.

Polish Market Tripled Since 1989 Polish drug market volume has tripled since 1989 to about $1.5 billion, with drug spending estimated at some $40 per head of population a year. Some foreign drug company sources suggest that current market volume calculated in terms of economic drug prices is around $2-$2.5 billion and argue that if prices were to be liberalized the domestic market has a potential to increase to $3.5-$4 billion.

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