Macroeconomic importance of the pharmaceutical sector in Poland

Prof. Ewelina Nojszewska, co-author of the report "Macroeconomic Impact of the Pharmaceutical Sector on the Polish Economy," points out that the pharmaceutical sector is an important element of the market, which plays an important role in ensuring the health of Poles, reducing the country's dependence on foreign entities for medicines, as well as contributing to technological progress and development. - In a situation of theoretical import substitution of domestic production, the Polish economy would significantly reduce its size, employment and tax and contribution revenues, he stresses.

Share of drugs of domestic manufacturers in the Polish market

Every second reimbursed drug sold in Poland is produced by member companies of the National Drug Manufacturers. This means that they supply half of such preparations, while the NFZ spends only 1/3 of its reimbursement budget on them. The sector, in the form of taxes and tributes, contributes more than 4 billion zlotys to the budget, that's 1 billion more than the NFZ spends on reimbursing domestic drugs. - A significant barrier is the lack of a government strategy for the development of the industry with the identification of the most desirable directions of production and instruments for its support, as well as the constant pressure to reduce the prices of reimbursed drugs, says Krzysztof Kopeć, president of the National Drug Manufacturers.

Impact on GDP and employment

The latest available data from the Central Statistical Office (CSO) shows that the total impact of the domestic pharmaceutical sector is more than PLN 20.7 billion, which translates into 0.67% of the country's GDP. - This is as much as the National Health Service spends on reimbursing all medicines, including the most expensive ones available only in hospitals, says Krzysztof Kopeć, president of the National Drug Manufacturers.

The industry generates 81,200 jobs, accounting for about 1.1% of total employment in Polish manufacturing. Salaries in the sector are 46% higher than the average in industry.

Production volume and innovation of the sector

From 2019 to 2022, the industry's output grew by 32.2%, with a 16% increase in the sold output of the Polish pharmaceutical industry in 2023. The pharmaceutical sector in Poland creates 1.5% of the value added in processing, which classifies Poland among countries where its role is relatively small. However, against the background of Europe, there is significant potential for the development of this industry in Poland.

In many ways, the pharmaceutical sector is the most innovative industry in the Polish economy. The share of innovation-active and innovative enterprises, i.e., those introducing product or business process innovations in 2020-2022, was 72.2% and 64.7%, respectively, and was the highest among all sectors of the economy. The share of enterprises in the sector that completed innovation work, carried out innovation work, conducted research and development work internally or outsourced it to others was also the highest among all industries.

Export growth

Poland is heavily dependent on imports of pharmaceutical products to meet demand in the domestic market. However, over the past two decades, there has been a dynamic development of pharmaceutical exports from Poland. While in 2003 the size of the trade deficit in the turnover of pharmaceutical products in relation to the value of their imports was as high as 91.1%, by 2022 this relationship had decreased significantly - to 45.5%. Germany is Poland's most important trading partner in the area of turnover of pharmaceutical industry products, both as a supplier of imported goods and as a recipient of products sold for export.

How to tap the potential of the pharmaceutical sector?

- In many European countries, the industry is the lifeblood of the economy. In Poland, the sector's total contribution to GDP has fallen from 0.74% of GDP since 2020 to 0.67% of GDP in 2022. A continuation of this trend could reflect negatively on our drug security. Meanwhile, other countries in the world are directly supporting the development of their pharmaceutical industry. Poland, unfortunately, does not implement such practices. Failure to do so in our country will result in restrictions in the availability of pharmaceutical substances and a decrease in drug safety in the event of global socio-economic shocks," says Dr. Agnieszka Sznyk, CEO of the Institute for Innovation and Responsible Development, an expert on sustainable development and socio-economic development of society, and co-author of the report.

Source: press mat.