Russian pharmaceutical market

The pharmaceutical market is generally considered one of the most profitable in the world, and Russia is no exception.

The Russian pharmaceutical market is in the TOP 10 largest farm. markets in the world.

One of the differences is to focus on imports (according to various sources from 65 % to 76% of drugs consumed by the population of our country is made overseas). Leaders of medicines imported into the country are SANOFI-AVENTIS (France) and NOVARTIS (Switzerland). And only the honorable third place company PHARMSTANDARD — single domestic manufacturer, listed in the TOP 20 of the leading players in this business in Russia.

thanks to such features as orientation on imports, as well as geographical characteristics in Russia, a great attention is paid to wholesalers.

Pharmaceutical distributors provide the availability of foreign drugs in our market and are engaged in the distribution of products of domestic manufacturers. Leaders in this area, as well as production remains relatively stable and the 15th largest holding up to 78 % of the market, which is very high concentrations. Distributors are trying to build their network with offices in many cities, to ensure a stable flow quantity of products required. Their work affects the majority of sales, both commercial and in-hospital segment. Thanks-established supply chain, as well as the availability of goods in the warehouse of the distributor and will depend, how much of prescriptions will be provided with purchase. Leaders in the distribution segment for the assessment of past years are such companies as «SIA international» and «Protec». In the volume of the pharmaceutical market of their total score reaches 33%. Smaller wholesalers also begin to create an extensive network of warehouses (for example, FC PULSE, IMPERIA-PHARMA). Similarly high growth rates show distributors such as R-PHARM and BIOTEC. According to experts, in Russia there are approximately 2,500 companies engaged in wholesale sales of pharmaceutical products, of which 2300 are small.

One of the steps of the pharmaceutical distribution chain are the retail pharmacy network. In contrast to wholesale, there is low market concentration, the 10 largest companies account for only 15% of the market.

regarding the financial indicators on domestic farmlink, it is possible to define the following:

1. nearly all major domestic manufacturers increased revenue in 2012, however, the results do differ, and the increase was from 2 to 48%.
2. the price increase for the year was in the region of 6-7%.
3. Major pharmacy chain teetering on the break-even point and the average return is only 1%.

the figures presented for 2012 for 2013 is yet early to speak, but the overall dynamics can talk about the overall financial growth. Main points, giving such dynamics are inflation and the increase in the share of high-value products in the sales structure. As well as an active impact on the State, but more on that later.

Why Pharm. the market in Russia is one of the most profitable? Let us denote main reasons:

1. Population of 143 million people, and they are all potential consumers of medicines.
2. Most of the population is Mature or old age, and as the prolongation of life and treatment of accumulated diseases are one of the main priorities of people, a significant portion of income is spent on the provision of such needs.
3. the Researchers came to the conclusion that Russians tend to take medication for any reason, use a separate appointment. This is due to the mentality of the people, as well as an imperfect health care system. Consumption of medicines in our country, based on 1 person, we are much higher than in developed countries.
4. available in the market of low-quality medicines, or not providing any effect. People use them in large quantities, without result, and very often trigger the disease. Subsequently, the medication again increases.

currently, the state regulation has a very large impact on domestic farmlink, developed and pretend to be in the life of the strategy for the replacement of imported medicines Russian. For example, when working with vital and essential drugs, in an advantageous position remain for Russian producers, as the allowance depends on producer prices. The launch of new drugs, is also one of the most important areas of the market. Many importers are increasingly thinking about the opening of the contact facilities on the territory of our country. The state seeks to actively support and motivate foreign Pharma companies on this kind of cooperation because it allows you to create not only new jobs, but also to ensure the inflow of funds into the state budget.

the Government is actively taking measures to regulate the pharmaceutical market, in particular generates a local manufacturer. Attempts in this direction are being made since 2010 in General, talking about strategy 5 years ago, when the strategy «Pharma 2020» was still in the development stage, it has become one of the 3 main documents, which determine the development of the industry for decades to come. On the second place of the Federal target program «Development of pharmaceutical and medical industry of the Russian Federation for the period until 2020 and further perspective» and the third «Strategy for the provision of medicines of the Russian Federation up to 2025».

the strategy «Pharma 2020» provides that in the domestic market it is planned to increase the share of domestic drugs to 50% by 2020. It is also planned to make changes in the nomenclature of medicines, increase to 60% in portfolios of innovative products. A lot of money invested in research. And all this against the background of a General increase in the number of productions, with all the consequent implications.

Recall that in 2013 passed the Federal law on 05.04.13 No. 44-FZ «On the contract system in the procurement of goods, works, services for state and municipal needs», he will take effect from 01.01 2014, despite the fact that more than 30 acts relating to this law, are still in the development phase. So many lawyers, as well as all those interested in public procurement, anxiously waiting the new year and what he will bring. According to experts, a significant impact may have requirements for mandatory compliance with the standards of production from 01.01.2014 (FZ «On circulation of medicines» №61-FZ). Those businesses that fail to upgrade, you will have to close. This will affect the growth of prices for domestic medicines.

so, the pharmaceutical market in Russia is now at the stage of restructuring and modernization. The government made many efforts to bring domestic producers in leaders. But how their actions will be successful, will be judged, probably closer to 2020, when all the planned strategy will be implemented.

According to the materials of the Ministry of industry and trade of Russia

Studies of DSM Group

Natalia Siskin,

Recruitment company AVICONN

Consultant recruitment