We have previously examined healthcare and the pharmaceutical industry in Russia. The other markets of Central and Eastern Europe (CEE – usually considered to comprise the Czech Republic, Slovakia, Poland, Hungary, Romania and the Balkan countries of the former Yugoslavia) are less often considered as a separate entity – either they are added on to general European plans, or are linked with Russia as “former Communist countries”. However, individual consideration of these markets is warranted as they are a growth area for healthcare and the pharmaceutical industry.
Andrew Widger, Director, Media Relations EMEA at Pfizer, says he believes a local view is necessary when planning engagement in the CEE region:
“‘With such diversity, the opportunities and challenges may be equally diverse. Network coverage, local regulations and restricted access to certain networks, literacy, language, cultural reference points – all these and more point to a need to approach opportunities with a local view.”
Operating and producing in the CEE markets
The CEE markets are highly diverse in terms of economic development, the healthcare landscape and internet usage, although there is the common factor of general growth. According to a report by Espicom, the pharmaceutical market of Central & Eastern Europe is estimated at US$59.8 billion at retail prices in 2011; it is expected to reach US$94.5 billion by 2016. Other aspects of the healthcare market, such as medical devices and the provision of private healthcare are also growing. Thus, the CEE markets could represent a growing focus for pharmaceutical companies in commercial terms.
The mainstay of pharmaceutical sales in this area is branded generics – indeed a number of generics companies (including Krka, Gedeon Richter, Polpharma and Zentiva) are based in the region.
The CEE region may be of interest to pharmaceutical companies in the current cost-saving environment. The workforce in these countries is often well-qualified and English speaking, with lower salary expectations than Western Europe. Geographically, it is easier for countries based in Western Europe or the US to work with CEE countries, than with Asian countries.
Many of the CEE countries rely on imports of medical equipment, particular of more sophisticated devices. As joint ventures in Russia help increase local production of pharmaceuticals, which benefits the economy, the population and the investing companies, external medical device companies may wish to consider partnering with manufacturing firms based in CEE countries.
Social media usage in CEE
Whilst looking at joint ventures in Russia, the potential role of digital engagement was highlighted. Could a digital approach be of use in the CEE countries, for pharmaceutical companies looking to expand into the area commercially and in terms of production?
Internet and social media usage in CEE countries is diverse. According to reports published in 2010 by ECCO Social Media, the most advanced country in terms of internet usage in the region is Poland, which can be considered to have a “Western” pattern of usage with a delay in uptake of innovations. At the time of the survey, over half of Poles were aware of social media, two-thirds of Polish internet users used at least one social network and over a third created their own online content. Videos were popular, with 88% of Polish internet users watching video content. A report by Pyramid Research in April 2011 showed that over 50% of mobile phones sold by the country’s main operator in the first quarter of the year were smartphones.
The situation in the Czech Republic, which has a much smaller population than Poland, is slightly less advanced, but moving forward nonetheless. Around a tenth of the Czech population uses Facebook (alongside social networking sites that are specific to the Czech Republic) according to ECCO Social Media; mostly these are people in the 15-24 age group. Interest in smartphones is growing – in 2010, 2.3million phones were sold in the country, 111,000 of which were smartphones. It has been predicted that smartphone sales rates will increase further in 2011, with over 200,000 Android smartphones alone being sold. However, there is somewhat less interest in blogging and use of Twitter amongst the Czech population.
Romania has the fastest internet speed in Europe, along with Lithuania, Bulgaria and Latvia. Its broadband penetration rate is not correspondingly high, but it is growing quickly, having risen from 17% in 2005 to 43% in 2011 (according to GFK Romania, a market research company based in Bucharest). The GFK Internet Monitor describes the average Romanian internet user as being an urban citizen aged 18 to 44, and claims that although social media is used by a large number of marketers and communication professionals, the average budget allocated to social media activities is usually too low to set up a campaign with clear and established strategies and objectives. Social media is still generally viewed as an experimental tool.
Hungary had a broadband penetration rate of around 58% in the last quarter of 2010, close to Western European rates. eCommerce is thriving in this area, with the retail sector experiencing sustainable growth; eHealth is also growing, with a number of well-established patient portals, such as HáziPatika, WebBeteg, Weborvos, and Figyelek Magamra (translation: I am taking care of myself/I am paying attention to myself). According to Dr. Bertalan Meskó, Founder and Managing Director of Webicina.com, HáziPatika is the most popular Hungarian patient portal, with over 2.5 million visitors a month. The portal provides a space where patients can interact with each other via the forum, as well as games that encourage website visitors to learn more about various subjects such as dry skin, baby food and vitamins.
Hungarian language presentations on the web, mostly created by digital agencies, suggest that there is a significant digital innovation movement in Hungary, with experts recognising that the pharmaceutical industry tends to lag behind in social media use. Mobile is also experiencing sustainable growth: in June 2011, the number of Hungarians paying for mobile data plans was reported to be just over 1.5 million (around 15% of the population).
The countries of Central and Eastern Europe have growing healthcare markets and general economies, and are also developing in terms of internet and social media usage. Taken together, this could represent an opportunity for pharmaceutical companies to expand into the region, in a sustainable, mutually beneficial and commercially viable manner, or to further establish their existing presence using digital methods.
It is necessary for any industry players interested in engaging digitally in the region to consider each country individually, not as a part of a generic “former Eastern bloc” group. As demonstrated above, each country has unique characteristics in terms of internet and social media usage, and these would need to be taken into account when designing and delivering an engagement campaign.