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New to the family

It is nearly a year since the European Union family expanded with the addition of 10 new members. However, Central and Eastern European members will provide fertile soil for PR growth.

Mother and babyIt is nearly a year since the European Union (EU) family expanded with the addition of 10 new members, mainly from Central and Eastern Europe (CEE), to form today's club of 25 - a long way from its beginnings as a six-nation group more than 50 years ago.

The new additions shift the EU's centre of gravity significantly eastward, bringing important implications for both public relations (PR) and pharmaceutical marketing operations.

The health challenges in many CEE countries differ markedly compared with those in Western Europe. Yet, CEE offers fertile soil for major health education and disease awareness programmes targeting the public and healthcare professionals.

Key factors emerging as essential for working effectively with new EU members include understanding their rapidly developing healthcare systems, and capitalising on a growing recognition of the need for major health education and disease awareness campaigns.

The new Member States are striving to match mortality and morbidity rates with the rest of the EU and, while they are poorer than the old countries (with a combined GDP of less than 5 per cent of the EU15),
their economies are growing quickly.

Know the problems
One of the biggest challenges in employing PR effectively in CEE countries is finding viable ways of working in healthcare systems that are still struggling to maintain a balance between healthcare costs and income.

The political and economic changes that have taken place in the CEE region have stimulated extensive health system reforms over the past few years.

Health systems have been transformed from highly centralised structures funded from state revenue, to systems capable of working in a market economy. Yet, some still suffer from lingering elements of corruption and a clear understanding of these systems is essential to achieving productive marketing strategies for drugs.

Alicja Borkowska, head of the healthcare practice at GCI Warsaw, Poland - the EU's largest new member - summarises the situation: The challenge is to establish ethical and reliable relations with healthcare professionals and representatives of parliament and government.

Over the past few years, there has been decentralisation in financing and the introduction of two new sources of funding for healthcare services: social health insurance contributions, and out-of-pocket payments (user charges).

Some countries have adopted elements of competition and performance-based contracting to control their healthcare expenditure. However, these reforms have not yet brought total expenditure on health, as a percentage of GDP, up to EU levels. This inevitably affects drug spending, which is one of the easier targets for government ministers to control.

A recent IMS market forecast warned that the proportion of GDP for healthcare had remained static, or fallen, over the past two years and would likely not change in the near-to-medium term. Yet, Hungary
was optimistic that spending would increase to 7 per cent (and Slovenia to 6.9 per cent) of GDP, respectively.

A recent report from the London School of Economics and l'Institut des Sciences de la SantÈ warned that life expectancy remained much lower than in the old Member States and gender differences in life expectancy were much wider - sometimes as much as nine years.

There were significantly higher levels of cardiovascular disease, road traffic accidents and other injuries, and some cancers (in particular lung and cervical cancer) - many of which are associated with lifestyle risk factors, including smoking, alcohol consumption and high fat diets.

Joining the EU will further support efforts to reduce infectious diseases and reduce health inequalities.

The most exciting opportunities for pharmaceutical companies as well as for pharmaceutical PR are going to be in education and educational campaigns, says GCI Poland's Borkowska.

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Know your politics
Pharmaceutical marketing has a tough job because accession countries report pharmaceuticals as their main healthcare expense. Bulgaria and Slovakia spent 30 per cent of their healthcare budgets on drugs in 2002, while Hungary spent 26 per cent. Slovenia trails at the back with the lowest spending - 16 to 18 per cent, and yet its government is striving to cut this further by tightening prescribing controls.

Healthcare cost containment is likely to remain a priority over the next five years as CEE governments aim to stem escalating debt. Measures will likely include prescribing controls, restrictions on reimbursement and encouragement to use more generics and drug procurement.

There may also be a move away from a treatment-dominant culture, with greater emphasis on prevention posing a good chance for drugs with a strong evidence base in primary or secondary prevention.

Keeping a close eye on changes in government policies can open doors for particular initiatives in pharmaceutical PR and marketing. For example, Hungary's new Health Minister, Jeno Racz (a former surgeon) appointed in 2004, has been given resources for general healthcare reform, including improving emergency care and rural healthcare services.

The Hungarian Association of Innovative Pharmaceutical Manufacturers considered that his appointment signalled a more predictable period for the industry, with the potential for more positive dialogue with the health ministry.

In Latvia, the newly appointed Health Minister, Gundars Berzins, has promised to extend full, or partial, reimbursement to cover treatments for nine conditions, including cancer, haematological/kidney disorders, as well as medicines containing growth hormones.

In the Czech Republic, changes in health ministers have been a little more turbulent. Dr Milada Emmerova was appointed as Health Minister in August 2004 following short stints by two other politicians.

She faces healthcare debts estimated at CZK10bn ($379m) to CZK15bn. However, healthcare remains a priority for the Social Democrat Party-dominated government.

PR activities focusing on patients are proving successful in the Czech Republic, where lack of state funding and income from health insurance is putting pressure on prescribing budgets. The government is committed to providing healthcare that is free at the point of use and is opposed to any increase in co-payments by the population. To balance budgets, doctors are encouraged to prescribe generically.

GCI Praha is gearing up for the third year of a national road show, 'Breathing without obstacles', whose main aim is to educate people about asthma.

Jindrich Lacko, business unit director at GCI Praha, notes that: Activities are more successful if organised nationwide with regional activities attracting support from local media. It is also clear that some pharma firms are investing in longer-term PR activities, rather than looking for more immediate business returns. OTC product promotion is also gathering pace.

In Poland, this improvement is reflected in a more rapid increase in pharma and healthcare product advertising, compared with other industry sectors.

Pharmaceutical advertising spend almost doubled to Zl811m ($230m) between 2000 and 2003, according to a report, The Advertising Market in Poland: Prognosis for 2004-2006, published in 2004.

Know regulations
The key to taking effective pharmaceutical PR campaigns forward in CEE countries rests on a thorough understanding of the regulatory environment in each country.

Sebnem Camas, general manager of GCI Istanbul, warns: The sector in Turkey is governed by strict regulations, so can be seen as tough.

Regulations are leading companies' medical directors and ministry affairs executives in their marketing plans, so many PR projects are put on hold, or even cancelled, to avoid the risk of
incurring government penalties.

Yet, the good news is that effective PR campaigns can achieve good take up as long as they are grounded on a clear understanding of the local environment.

Camas, who recently launched the results of a global survey demonstrating improved control of asthma symptoms with combination therapy, explained: The study - published in November 2004 - was a landmark in its sector. Our goal was to communicate the results of the survey to the general public, as well as to doctors.

An initial plan to organise a major press conference for healthcare and general journalists was adapted to providing one-to-one interviews with the specialists who were invited as speakers to Turkey.

Tautvydas Musteikis, managing director of GCI Lithuania, considers that only specialised knowledge can guide firms through local conditions.

Strict regulations for the promotion of medicines in mass media create additional possibilities for PR specialists.

He considers that changes introduced at the beginning of 2005, requiring local representative offices of international pharma firms to be registered as separate legal business entities, bring opportunities.

The change of financial flow has empowered local divisions of pharma companies, as they have more influence in taking decisions about cooperation with PR, as well as advertising, agencies. Therefore, it is expected that the demand for these services will rise.

The new EU members have some way to go but health is a top government priority. Money is tight and today the rewards for pharma may not yet be on the western scale, but they are real, and they are growing.

The Author
Katerina Wheeler, CEE regional director, GCI Europe

2nd September 2008

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