The added value of the pharmaceutical industry as a whole significantly increases the gross domestic product and promotes employment. Therefore, it has a major impact on the national economy.

Impact on the GDP: CZK 42 billion

The economic impact of the innovative pharmaceutical industry significantly increased between 2010 and 2018 in terms of both its contribution to the GDP and employment. With its activities and investments, the innovative pharmaceutical industry generates a total turnover of 42 billion Czech Crowns with a relatively high multiplier effect that currently represents 2.4. In other words, every Czech Crown spent by innovative pharmaceutical companies generates an additional 2.4 Czech Crowns in the national economy. The contribution of the innovative pharmaceutical industry is thus comparable to that of information technologies (coefficient 2.3), chemical production (coefficient 2.5), or telecommunications (coefficient 2.1).

14,500 employees

The innovative pharmaceutical industry also creates approximately 14.5 thousand jobs, and more are being created. Of these, more than 7,000 are direct jobs, another 7,000 are indirect jobs (employees of the suppliers of AIFP member companies) and induced jobs (jobs created based on expenditures of direct, indirect and state employees). This expands the range of suppliers of AIFP member companies; thanks to cooperation they can finance their activities and pay employees in the transport, marketing or IT sectors.

Support of Czech hospitals and other entities  

AIFP members’ costs, discounts and other support measures related to their activities also represent an important source of financing of Czech hospitals and payers. Cooperation with hospitals primarily includes activities related to clinical trials. “The cost of clinical trials in 2017 alone amounted to 1.6 billion Czech Crowns, the cost of related alternative treatment reached 1 billion Czech Crowns,” explains Jakub Dvořáček, executive director of AIFP. AIFP members also provide hospitals with discounts and financial support amounting to 1.5 billion Czech Crowns.
AIFP member companies' activities have a positive financial impact on payers and regulators, which primarily represents regulatory fees of 91 million Czech Crowns and discounts of 3.7 billion Czech Crowns provided to health insurance companies. This amount actually corresponds to annual expenses of the largest Czech health insurance company VZP for the treatment of all patients with breast cancer, HIV and idiopathic intestinal inflammation.

Further growth potential: USD 4.4 billion

However, the Czech Republic still has some reserves in comparison to other leading states of the region. The percentage of the pharmaceutical industry on the GDP in the Czech Republic in 2016 was 0.6% while in Hungary it was 1.5% and in Austria 1.4%. “If the pharmaceutical industry reaches the same level of development as in these states, the GDP could increase by another USD 4.4 billion,” concludes Jakub Dvořáček.