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Executive Summary
Healthcare spending in Hungary, as a percent of GDP, has been decreasing or stagnant over the last 10 years. In 2017, healthcare spending was 7.1% while in 2018 it was 6.9% of the GDP. Hungarians are covered by the national healthcare insurance program through their employers while private entrepreneurs are required to pay social contribution themselves to the National Tax Office.
By November 2018, Hungary’s state-run hospitals generated almost $192 million in debt. This was all recovered from the central Government budget in December 2018, but all state-run hospitals have since generated another debt of $153 million. Reoccurring hospital debt remains the biggest problem in the country’s healthcare system resulting in postponing diagnostic examinations, surgeries, and other inevitable treatments.
The most frequent hospital-acquired infections in Hungary are pulmonary, urinary tract, post-surgery wound infections, and blood-borne infections. The administration of too much antibiotics is also a problem in Hungary.
Hungary will spend HUF 11.43 billion ($35 million) of EU funds through the Human Resources Development Operational Program with the aim to combat and prevent hospital-acquired infections in 2020-2021. The main focus areas are: hand hygiene, urinary tract catheterization, infections occurring in relation to mechanical ventilation, post-surgery wound infections, and infections occurring in relation to venous catheterization.
According to studies by WHO and OECD Hungary is criticized in several healthcare fields including:
- Lack of planned surgeries available within 90 days and rehabilitation programs
- Long wait times for treatment, particularly in orthopedics and neuro surgery (average of 140 days with the longest time of 211 days for knee and hip prothesis)
- Under-utilization of diagnostic examinations such as CT or MRI due to financial limitations of hospitals
- High ratio of death caused by cardiovascular diseases and strokes
- Frequent staphylococcus occurrence in hospitals
- Slow implementation of e-prescriptions and other health-IT projects including e-records of patients etc.
Hungary had 164 active hospitals with 42,700 total active beds in 2018. The average number of days spent at a hospital was 4.8 days per patient. The sector has 150 export-driven medical manufacturers and contributes 5.2% to Hungarian exports. The country has a solid base for large-scale manufacturing of a range of medical devices and a century of medical technology traditions. However, it is increasingly challenging for domestic production to compete with Western quality and innovative imports. The Hungarian med-tech sector can boast a strong academic background, cutting edge research and development in university spin-offs with research areas in medical imaging, electrical and biosensor devices, and lab diagnostics.
Hungary is working to achieve a globally significant position in certain healthcare sectors where its infrastructure and know-how are strong, such as clinical trials, development of biopharmaceuticals, in-vitro diagnostics and animal biotechnology. The historically strong Hungarian pharmaceutical industry has an established knowledge base and skilled workforce that enabled the creation of a biopharma subsector adept at developing therapeutics. Therapy development has become more important as more and more original research technology/service provider companies start their own product development programs. Key representatives of international biotech companies are present in the market include Richter, Egis, Amgen, Cyclolab, Omixon, Biogen, Servier, and Solvo Biotechnology. Hungarian biotechnology companies have also expanded their presence into major European markets. This expansion is supported by the Government of Hungary since the National Research, Development and Innovation Office regards biotechnology as a strategic area for development. Significant results have been achieved in nanotechnology, molecular chemistry, and biotechnology services.
The majority of medical equipment suppliers in Hungary are EU-origin manufacturers (primarily German, Italian, and French). Major U.S. medical technology suppliers, such as GE Healthcare, Medtronic, Johnson & Johnson, Baxter, Varian and Becton Dickinson also have direct representations or subsidiaries in Hungary. U.S. medical device exporters to Hungary hold close to 6% of import market share. The most promising subsectors are biomedical devices, cancer and other diagnostic devices, imaging technologies, and dental equipment.
As a member of the EU, Hungary’s local legislation concerning medical devices complies with EU directives. More information can be found at the European Commission’s DG Health & Consumers, Public Health, Medical Devices: ec.europa.eu/health/medical-devices/index_en.htm
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Market Entry
A foreign producer that wishes to export medical devices into Hungary must first establish a contract with a local importer, who can help the company fulfill regulations such as the CE mark, Declaration of Conformity, and translation of directions and manuals into the Hungarian language. Medical devices and pharmaceuticals are subject to a customs duty and value added tax (VAT) of 27%. The duty for medical equipment imported from the U.S. varies between 3-11%.
Annual local production is valued at $3.4 billion and consists mainly of hospital and rehabilitation beds, dental and traumatology implants, apnea alarms, incubators, infusion pumps, sports medicine products, ECG systems, surgical laser, devices for neonates, knee- and hip implants, sterilizers, suction devices and 3D-printed medical supplies. Local production and imports generally complement each other.
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Current Market Trends
Economic growth and healthcare spending-increases in 2018 resulted in growing demand for medical device imports. Most U.S. export items to Hungary were CT, X-ray and other surgical apparatus, orthopedic devices, syringes, catheters, medical needles, and dental equipment.
Medical device suppliers can benefit from Budapest’s hospital redevelopment project, to be completed by 2025. The establishment of three super-hospitals in the city will involve the expansion of existing facilities, an increase in bed capacities, and the refurbishment of many inpatient institutions, all helping to drive market growth.
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Best Prospects
Hungary has excellent market opportunities in the fields of innovative health therapies and equipment, dental care equipment, and many other devices that increase efficiency and reduce occupancy rates in hospitals. Products with the best sales potential in Hungary include but are not limited to:
- Electronic Medical Records (EMR) systems
- Patient monitoring systems
- Mini invasive surgery (MIS)
- Surgical dental equipment
- Day surgery equipment
- CT and magnetic resonance imaging (MRI) equipment
- Video endoscopes
- Digital image processing
- Picture archiving
- Syringes, catheters, needles
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Med Tech Main Competitors
Hungary’s medical device manufacturing sector is skilled yet remains relatively small. Thus, more than 70% of the Hungarian medical device market is dominated by imports mainly from the European Union markets such as Germany, France and Italy, as well as Asian countries. Direct imports from the United States account for 5.6%. However, the total U.S. market share (including transshipments via other EU countries) is estimated at 9.5-10%.
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Barriers
Hospital debts and limited financial resources of state-run medical service providers and hospitals pose significant threat to increased medical sales in Hungary. The average wait time for heart and orthopedic surgeries can be 200+ days and 70-90 days for patients with cancer where the time to save a patient would be crucial.
Medical device importers sometimes face problems obtaining approval to be placed on insurance reimbursement lists – something that is also a challenge in other Central and Eastern European countries.
If a product is not included on the reimbursement scheme paid by insurance companies, the market for the product is limited. The catalog of reimbursed operations, medical aids, and pharmaceuticals is reevaluated every six months.
Among OECD countries, Hungary is experiencing a decline in the number of available nurses. While in 2010 there were 7.44 nurses per 1,000 inhabitants, in 2015 this number dropped to 5.75 (OECD average is 9.09). Inferior working conditions in hospitals, low salaries, and inconvenient new legal regulations directly stimulate dissatisfaction amongst nurses. The number of active physicians remained stable, in 2010 there were 2.9 medical doctors per 1,000 inhabitants, in 2017 this number even slightly increased to 3.2 (OECD average is 3.4).
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Procurement & Tenders
The National Healthcare Services Center that is supervised by the Ministry of Human Capacities publishes all public procurement activities on its website: https://www.aeek.hu/web/national-healthcare-services-center/main-page
Tenders for healthcare public procurements are published in the Supplement to the Official Journal of the European Union: https://ted.europa.eu/TED/search/searchResult.do
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U.S. Commercial Service Contact Information
Name: Csilla Viragos
Position: Commercial Specialist
Email: Csilla.viragos@trade.gov
Phone: +36 1 475 4250
