Long tradition, new FDI into R&D

National pharmaceutical industry with strong rootsStrong presence of large international pharmaceutical and biotechnology companies: R&D and manufacturing

WHY HUNGARY

STRENGTHS AND OPPORTUNITIES IN THE HUNGARIAN PHARMA SECTOR

One of the largest and most developed pharma markets in Eastern Europe;The strongest pharma sector in terms of technology and productivity in Eastern Europe;EU harmonized pharma legislation;The largest FDI stock in the pharma sector in the region;Expanding branded products market;Growing pharma export

Strong scientific and technological base of highly skilled workforce Large number of students in pharma related high

education faculties

Cost advantages: 30-50% of the EU

wage level Well-trained researchers and scientists Lower overhead costs

Academic-Corporate cooperation Universities: Budapest, Szeged, Pécs, Debrecen,

Gödöllő, Veszprém Main Research Centres: Agricultural Biotechnology

Center, Gödöllő, Bay Zoltán Institute for Biotechnology, Szeged, Biological Research Center, Szeged, Institute for Small Animal Researches, Gödöllő, Central Food Research Institute, Budapest

Added value of the pharma

sector

Hungary is the fifth largest medicine producer in EuropeLargest biotechnology innovation and spin-off sector in CEEExtensive R+D cooperationUniversity biotechnology centres clustered in four academic towns

Life sciences

A High Performing Sector

Latest investments in the life sciences sector

2005:• Chinoin-Sanofi (F): Establishment of a new R&D centre in Budapest• Teva Hungary (Israel): Manufacturing active pharmaceutical components,

Sajóbábony• Icon Clinical Researc (Ireland)h: New R&D centre in Budapest• Chinoin-Sanofi: Hypodermic syringe manufacturing plant + lab + warehouse in

Csanyikvölgy. Planned capacity of 100million syringe per year. • Richter Gedeon: Expanding and modernizing the capacity of the Dorog plant

2006:• Chinoin-Sanofi: 2nd R&D center in Budapest• Astellas Europe (Japan): Establishment of a Hungarian sales office• AIBMR Life Sciences (USA): Establishment of a European office in Budapest.• Synexus Clinical Res.(UK): Establishment of clinical research center, Budapest • GlaxoSmithKline (UK):Establishment of high-tech vaccine-manufacturing plant in

Gödöllő. • Servier-EGIS (F): Establishment of chemical research lab. • Teva Hungary: Establishment of logistics centre in Gödöllő.

2007Beike Biotechnology: Chinese stem cell research project, BudapestSt James (Malta): hospital project in BudapestAAI Pharma: Representative office of the American pharma companySauflon Pharmaceuticals (UK) : Contact lense factory near Budapest. Capacity: 100 million contact lenses/ yearPfizer (USA): Logistics and distribution centre in Budapest

2008TEVA (Israel): expansion of pharmaceuticals manufacturing capacity in DebrecenRichter Gedeon (H): R&D in Budapest and Debrecen

Latest investments in the life sciences sector

Nanotechnology in Hungary

Close to 50 research groups or institutes including 20 companies in nanotechnology research or manufacturing;Innovative areas: automotive, consumer electronics, pharmaceuticals, plastic, creramics and light and heavy metals manufacturing: bio/chemical sensors medical instruments composite polymers laser -technology ceramics metallurgy thin-layer coating, surfaces

Medical device manufacturing

Significant tradition of scientific equipment manufacturing 200 manufacturers at present, production value: USD 300 million/yearMajor products: orthopedic appliances, X-ray generators, dental fittings, artificial body parts, electrodiagnostic apparatus, needles, syringesMost locally produced goods are exported: Germany is the main destination, Russia is still a significant marketThe market will expand 3% annually until 2012 to USD 900 million (USD 92/capita)Legal background is harmonized with the EU

Clinical trials

Hungary has a solid record of attracting and conducting international clinical trialsOver 250 clinical trials performed each year – an outstanding number compared to Hungary’s population.Reasons for conducting clinical trials in Hungary:

• Rapid and reliable recruitment of study population

• Investigators are motivated and qualified

• High Quality of Data• Reasonable price advantage• Qualification of local study monitors is

above international average

Strong innovation capacity

The World Economic Forum ranks Hungary 24 among 131 countries in terms of the quality of scientific research institutions

Ranking Country

Switzerland 1

USA 2

Germany 5

France 19

Norway 21

Hungary 24

CzechRepublic

30

Slovenia 33

Spain 49

China 56

Poland 64

Greece 76

Source: Global Competitiveness Report, World Economic Forum, 2006/2007

Genomnanotech Knowledge Centre

Neurobiological Knowledge Centre

Cell Communication Knowledge CentreInfobionics Knowledge Centre

Medipolis Knowledge Centre

Debrecen

Szeged

Budapest

Pécs

Four life science clusters

Budapest, Szeged, Debrecen, Pécs: large international pharmaceutical and biotechnology companies clustered around universities • Enhance the cooperation

of academia and business• Coordinated by

Universities • Granted € 6.3 million each by the National Research and Technology Council• Long-term programs (8-10 years) in basic and applied research

Competitive wages compared to Western

Europe

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

180 000

Plant Manager EnvironmentalHealth and

Safety Manager

Research &Development

Manager

Research &Development

Engineer

Germany

France

Hungary

Source: Mercer, 2007

Regulatory system

The EU membership strengthened the regulatory system which ensures a transparent operating environment;Medicines Act (1999): the national procedures are in line with EU directives;Pharmaceutical market regulations 2005;Pharmaceutical Economy Act, June 2007 established medicine pricing in an auction process that sets prices based on the cheapest drug;The intellectual property regime is in compliance with international standards.