Losing the lead

Three large pharmaceutical companies have complained to the European Commission about the fiscal and legal problems they face in the clinical research (CR) market in Poland. This confirms fears shared by experts that the high level of bureaucracy and VAT costs are endangering the Polish market, in which pharmaceutical companies invest about zł.1 billion annually.

The Polish CR sector had a good reputation before the country joined the EU in 2004. The quality of research was mainly put down to Polish doctors' qualifications and the network of specialist clinics and hospitals. The reputation was also built up by the population factor, i.e. numerous groups of potential patients, as well as by the relatively low cost of research. Now, experts warn that foreign investors in CR are starting to perceive Poland as only a substitute location.

In Poland, there is a 60-day maximum period for CR applications to be processed. However, in countries such as Austria, the UK and Germany this period does not exceed 30 days. According to the Association for Good Clinical Practice in Poland, the CR registration process here is the longest in CEE.

"What troubles the CR sector in Poland is excessive formalization and the authorities' approach," says Tomasz Jędorowicz from PricewaterhouseCoopers. He points out that additional regulations imposed by entities such as the Registration Office are hindering the market.

Another obstacle to Poland's competitiveness is the fiscal burden. "For over 10 years [before 2004] clinical research organizations and similar firms had been providing so-called expert service to big pharmaceutical companies interested in investing in CR in Poland, which was taxed at zero percent. In May 2004, the service was burdened with 22 percent VAT due to non-harmonized VAT regulations," says Jędorowicz. While the tax is not such a big issue for European companies, which get the VAT refunded, it does burden the American players. Importantly, it is US pharmaceutical companies that are behind the bulk of CR in Poland.

According to the sector's estimates, around 400 research cases are conducted annually in Poland. "This number has not changed for a few years. No growth has been recorded," says Jędorowicz.