Strong Demand For Hungarian Pharma Stocks

Significant demand for drug company shares on the Budapest, Hungary, stock exchange is reported in an analysis of eastern European stock markets. published by GiroCredit in Vienna, Austria. The Hungarian state holding group, the AVrt, has issued two packets of pharmaceutical shares in each of four drug companies, which are aimed at institutional investors for selling on.

The sales of drugs has been largely liberalized in Hungary, with partial dismantling of price support and simplification of marketing approval procedures. Most imported drugs have already received marketing approval, and so domestic companies with a 0.7% share of world production face intense competition.

While Hungarian drugs are generally cheaper than those of the foreign competition, the need for Hungarian producers to increase R&D spending makes price increases inescapable, though GiroCredit's report suggests that the extent of these will be restrained by the shortage of social security funding and low income levels.