For makers of generic pharmaceuticals, markets in Central and Eastern Europe have presented a compelling story in recent years. Players have reaped considerable profits, often enjoying operating margins in excess of 20 percent. And these drug makers are not exclusively local; many international pharmaceutical companies that have entered the region have also been highly successful.
But times are changing. Although still attractive, these markets are becoming increasingly complex. While the precise scope, magnitude, and timing of coming changes remain uncertain, generics companies will soon find it harder to maintain current levels of profitability.
Source: McKinsey Quarterly, http://www.mckinseyquarterly.com