Drugmakers in Hungary must pay a special tax on sales of state-subsidized drugs and they must pay another tax on their sales representatives. For GlaxoSmithKline, the taxes are expected to add up to HUF 1.7 billion in 2009, Leitner said.

UK-based GlaxoSmithKline has so far invested €100 million at its base in Gödöllő, near Budapest, Leitner said. Further investments will depend on an investment climate that better favors the industry's interests, he added. Leitner complained about the lack of dialogue between industry representatives and the government, as well as about a lack of predictability and transparency. While the government wants to make the industry a priority, the restrictions on the sector are unprecedented, he added, noting that the National Health Insurance Fund has not accepted a new medicine for 18 months while there were around 30 "waiting in line".

Earlier, GlaxoSmithKline carried out phase-III clinical trials in Hungary, but now it is rather undertaking phase-II trials, Leitner said. About 40 trials are underway at more than 100 centers, costing an annual HUF 600 million-700 million.

The Hungarian government did not order a vaccine from GlaxoSmithKline for the H1N1 flu virus, but the vaccine can still be purchased at drugstores with a prescription, Leitner said. GlaxoSmith Kline expects to bring a test to market in 2011 that determines the type of influenza a person has.

Demand for vaccines is expected to rise by a factor of three or four from current levels over the next 15 years, and there is competition within the GSK group as to where production capacity should be expanded, Leitner said.

The Hungarian unit of GlaxoSmithKline generated HUF 41 billion of revenue in 2008, including HUF 14 billion in export sales, mainly to countries in the Balkan region. The unit sold HUF 20 billion of prescription drugs and HUF 6 billion of OTC medicines and oral care products. (MTI-Econews)