The Polish medical and pharmaceutical industry has a long tradition. In recent years, its structure and dynamics have changed significantly. The domestic pharmaceutical industry is one of the strategic industries of the Polish economy. It plays a key role in the whole healthcare system, providing Polish patients with examined, effective, high-quality and affordable medicines. Most Polish pharmaceutical companies have been privatized and numerous companies have been taken over by large foreign pharmaceutical corporations. In addition, new successful companies are emerging, which thanks to their innovation and implementation of new technologies, are entering foreign markets and becoming competitors of foreign companies. They also contribute to a significant increase in the competitiveness of the Polish economy.
Development in figures
The pharmaceutical industry is one of the fastest growing sectors of the economy. Only in 2008, the global turnover of pharmaceuticals was valued at USD 1,205 million, an increase of 208.8% since 2001. It is worth noting that operators in Poland are also thriving, e.g. they recorded the highest growth in the OECD between 1990 and 2019. Poland is the 9th market in the EU in terms of pharmaceutical wholesale, which amounted to EUR 14.6 billion in 2018. In Poland, the production of pharmaceuticals is also experiencing growth, with the value of drugs produced in Poland exceeding EUR 4.5 billion in 2019. Pharmaceutical exports from Poland between 2015 and 2019 increased by 23.9%, from EUR 2.8 billion to EUR 3.5 billion, while imports increased by 25.9%, from EUR 4.6 billion to EUR 5.8 billion. Mainly Polish producers export their products to the EU countries. For many years, the largest recipient of Polish products has been Germany, to which as much as 28.4% of Polish pharmaceutical exports went in 2019. The domestic pharmaceutical industry generates GDP worth EUR 7.3 billion, which is 1.33% of the gross domestic product. According to the Polish Main Statistical Office, 49% of domestic pharmaceutical companies are involved in innovation projects and 3.1% of all spendings comes from this industry. On average, Poles spend almost EUR 139 per person annually on pharmaceuticals, which is low compared to our western neighbour (EUR 510), but the amount has been growing very dynamically over the last 10 years. Experts’ forecasts predict further steady growth of global pharmaceutical spending, which in 2023 will reach between USD 1,438 billion and USD 1,606 billion. These data perfectly illustrate the dynamic growth of the industry and its huge potential.
Reasons for Development
The results indicated above, do not come out of nowhere. These significant increases are due to many factors, such as: stable business environment, well-educated talent pool, confidence of the largest companies in the Polish market, competitive, well-developed cities such as Warsaw (7th in the FDI ranking or Kraków 2nd in EU in Business Friendliness among Large Cities), well-developed infrastructure (1st in CEE in Airport Connectivity & Quality of Road Infrastructure according to the Global Competitiveness Report), strong academic base from pharma sector, transparency of the internal market (regional leader in the Transparency International Corruption Index). Moreover, Poland is a highly attractive country for conducting research and development activity and clinical trials. The reasons for this are the large number of patients and the relatively low costs of doing business compared to other European countries.
Investment and labour market potential
Poland is one of the largest employers among the EU countries in terms of the number of people employed in the sector, as it employs around 100 thousand workers. Many factors influence the dynamics of the labour market. In 2019, 25,707 people graduated from studies related to the health sector in our country. Poland ranks 1st in CEE number of graduates with biopharma-related degrees and 5th in Europe. Pharmaceutical specialization is offered by 12 medical universities in Poland, while biotechnology is offered by as many as 39 universities. For example, the University of Warsaw cooperates with such giants as AstraZeneca, Pfizer or Roche. Many universities also offer the opportunity to study these subjects in English. In the eyes of foreign investors, Poland has a high level of knowledge and research potential. Thanks to this, as many as 17 of the largest biopharma companies have their branches in the country, with investments amounting to EUR 640 million. Additionally, these companies have created 3,300 new jobs. In Poland, in 2017, there were as many as 350 companies producing pharmaceuticals. Among the domestic giants, it is worth to mention Polpharma, which exports its products to over 60 countries while employing 7065 people, or ExploRNA Therapeutics, a company that invests and develops technology for innovative mRNA therapies while holding around 40 patents in the modification of mRNA. Entrepreneurs implementing new investment projects in Poland may count on various forms of support. These instruments include grants from the state budget and are co-financed from the EU funds of which Poland is currently the biggest beneficiary, as well as tax exemptions: CIT and RET or R&D tax relief. In Poland, there are also special economic zones which are designed for business activity on preferential terms and numerous institutions, such as: Nutribiomed Cluster, BioTechMed Advanced Technology Centre or Consortium of Polish Academy of Science Biocentrum Ochota. Their purpose is to support innovation and entrepreneurship, as well as scientific and research work.
In conclusion, the pharmaceutical industry is nowadays dynamically developing and becoming an important branch of economy. Poland is characterized by a well-qualified and experienced staff, great development and research opportunities and additionally a financial support from the state. All this creates excellent conditions for investors and causes that this sector will play more and more important role.
KIELTYKA GLADKOWSKI, being also a proud member of the biggest Life Science Cluster in Poland, actively assists clients in all legal matters related to complex life science industry, pharma, biotechnology as well as various matters at the intersection of new technologies and healthcare, including digital health.