Countries such as Turkey, Bulgaria, Russia, Romania and the Ukraine are particularly attractive, with the latter three showing the most popularity, according to Polish market analysis firm PMR.

All three of these countries have large development potential due to their vast populations (140m in Russia, 46m in Ukraine and 22m in Romania).

Russia and the Ukraine in particular, with their 200m population of largely treatment naïve patients - greater than in all 12 Western European countries combined - have become increasingly popular for sponsors and contract research organisations (CROs) to base themselves in order to conduct clinical development programmes.

The countries have a recruitment rate between two and ten times faster as well as a cash saving of up to 50 per cent compared to the west. Drug trials from the US have tripled here in the past three years and both the European Agency for the Evaluation of Medicinal Products (EMEA) and the US Food and Drug Administration (FDA) are now approving drugs with trial data from Russian sites.

Of the three, Russia dominates the scene by far, holding one third of the total Central and Eastern European market, but all have experienced extremely intensive growth for the past few years and in 2006, the pharma markets in Russia and the Ukraine increased their value by one third, while the Romanian market grew by one fifth.

"Thanks to this, they are much more attractive than "mature" markets of Central and Eastern Europe such as Poland, Czech Republic and Hungary, which for several years have observed a slowing growth rate", said PMR.

"In the mid- and long-term perspective this makes them extremely attractive for potential investors. Therefore, it is worth becoming interested in them now in order to be one step ahead of the competition".
 
The firm also concluded that in the pharmaceuticals market of Central and Eastern Europe - which is currently estimated at €23bn - companies with regional coverage achieve a competitive advantage.

Obviously, the takeover of a local company provides the best opportunity for rapid entrance into a desired marketplace and PMR pointed to a increase in new penetration by foreign investors in the pharma industry of Central and Eastern Europe recent times, indicating that consolidation has been moving deeper eastwards in recent times.

In its report, titled: "Business strategies of pharma makers from Central and Eastern Europe 2007," the firm highlighted the example of the takeover of Russia's Akrihin (controlled by Polpharma), by Hungarian firm Gedeon Richter.

The deal was engineered by Gideon to compensate a drop in domestic sales from HUF 57.1bn in 2005 to HUF 54.8bn in 2006 but now thanks to the purchase, Russia and the countries of the former Soviet Union generate almost 40 per cent of the company's sales, while revenues on the domestic Hungarian market constitutes around half of it.