Impact of COVID-19 on the Average Asset Structure of Pharmaceutical Companies in the Visegrad Countries

Abstract

The management of the Covid-19 pandemic has posed a major challenge for the management of healthcare institutions in 2020-21, leaving the asset structure of companies in the pharmaceutical sector, their main suppliers, intact. The pharmaceutical industry in the Visegrad countries, the focus of our study, typically exports significant volumes of medicines, but is also a destination for investment, contributing to the competitiveness of domestic economies. The analysis was based on the annual reporting data of pharmaceutical companies in the region for the period 2018-2022, extracted from the EMIS database. Overall, the results did not confirm our preliminary expectations about the impact of the epidemic situation on the asset structure: the asset positions of the companies in the countries studied were relatively stable until 2021 and they did not become critically indebted, although Czech companies multiplied their debt in a few years. However, the financial data suggest that the years after the epidemic rather than the closures themselves were the dividing line in the indicators: in 2022, companies were in a worse position due to the deteriorating regional economic situation, their cash ratio had fallen significantly, their inventories had been reduced due to falling sales, and their finished product shelf life and production time had deteriorated, but they were still among the most capital-rich companies. Nevertheless, 2020 was a successful year for most companies in the countries surveyed.