// Regulatory & Legal
Shortage of pharmacists may cause pharmacy closures
Russian pharmacies may lose their licenses if hiring pharmacists without pharmaceutical education pursuant to amendments to the Russian Government Resolution No. 1081 “On licensing pharmaceutical activities”. The amendments were initiated by the National Pharmaceutical Chamber striving to protect pharmacy market interests from unfair pharmacies, and were approved by the Russian Government Resolution No. 791 of 4th July 2017. Pursuant to these amendments, now license holder’s failure to comply with any license requirement is considered major violation, which may cause the loss of a license to sell drugs. Some experts believe that this requirement is noncompliable. On 16th August, they exchanged their viewpoints during the roundtable discussion on Russian pharmacy prospects given the legislative changes.
[PharmVestnik # 26, 29/08/2017, p. 1, cont’d p. 6]
// Regulatory & Legal
VED list to include innovative orphan drugs
The rare diseases on the so-called List 24 remain one of the pressure points of the Russian healthcare. Every year, patient associations raise alarms because of acute rare disease program underfunding in Russia’s regions. At the press conference hosted by Genetics National Rare Disease Association, the discussion centered on ways to improve drug coverage of orphan disease patients and provide them with an access to innovative medicinal products.
[PharmVestnik # 26, 29/08/2017, p. 2]
// Regulatory & Legal
Russian medical manufacturers oppose changes to “odd-man-out” arrangement
Russian medical manufacturers gave a hostile reception to the Federal Antimonopoly Service (FAS) proposed amendments to Regulation No. 102, namely to allow foreign medical manufacturers to participate in government procurement bidding if they cut the initial (maximum) contract price by more than 25% during the purchasing procedure. Experts note that the Russian medical industry has just managed to stop the downtrend in respect of local production notwithstanding all attempts of foreign companies to circumvent the “odd-man-out” regulation. At the same time, FAS officials are sure that one cannot disregard potential budget savings due to choosing one or another supplier.
[PharmVestnik # 26, 29/08/2017, p. 3]
// Regulatory & Legal
Pharmacies may be forced to sell cheap drugs
Large pharmacy chains prefer selling expensive drugs, which is to a disadvantage of poorer customers and cheaper drug manufacturers. Some experts think that, in turn, the government, despite all attempts to curtail price growth, keeps failing in developing effective administrative measures for marketing cheaper generics. Recently, market experts met in Moscow to find a balance between the interests of different price segments.
[PharmVestnik # 26, 29/08/2017, p. 3]
// Regulatory & Legal
The state needs to establish control to legalize distance drug selling
The next step after tightening responsibility for selling drugs at pharmacies by pharmacists without an appropriate pharmaceutical education may be strengthening control for dispensing Rx drugs without prescription. Pharmacy market experts are ready to welcome such step. In the light of the prospect of online drug sales legalization, they emphasize that it is inadmissible to relax the legislative framework. The government’s primary objective is to make online pharmacies operate in a clear and controlled legal environment.
[PharmVestnik # 26, 29/08/2017, p. 8]
// Regulatory & Legal
Manufacturers alarmed by broader interpretation of government regulation
The National Association of Pharmaceutical and Medical Manufacturers embracing 25 Russian companies is seriously alarmed by the critical situation with the specific drug marking and monitoring experiment as it threatens many local manufacturers.
[PharmVestnik # 26, 29/08/2017, p. 9]
// Monitoring – SciTech
Pharma companies have inflated expectations from digital technologies
There is no direct correlation between application of digital technologies and drug sales. Experts say that when making decisions on investment in digital tech, pharma companies set unreal objectives: they expect results like from TV promos. Nonetheless, online promotion budgets keep growing slowly but surely. Virtual tools must be made smart use of, and one needs to keep in mind that they change rather fast; only in such case the effect of their use may be assessed.
[PharmVestnik # 26, 29/08/2017, p. 10]
// Monitoring – SciTech
Self-learning programs to end molecule shortage era
Russian software developers are about to offer the Big Pharma an IT system securing against R&D failures as well as providing for cost cutting. Analysts believe that this may result in a larger number of new drugs. The system is to select and analyze huge volumes of information at the candidate molecule choice stage. At the same time, analysis using artificial intelligence is thought not to be effective without proper control by an R&D expert group.
[PharmVestnik # 26, 29/08/2017, p. 12]
// Pharma Retailing
Struggling with federal discounters
“Conquer or die” is today’s reality of the Russian pharmacy market. Federal pharmacy chains continue expansion into new territories; therefore, none of local players is safe against a strong competitor suddenly emerging in the neighborhood. Federal chains’ strong points are better conditions in interacting with distributors and manufacturers. Competing with them “one-on-one” is basically out of the question. Alexander KONDRATIEV, Managing Partner of ASNA Pharmacy Chain including more than 6,000 pharmacies, speaks on the situation.
[PharmVestnik # 26, 29/08/2017, p. 13]
// Insight – Pharma Distribution
Rating of Russian pharmaceutical distributors, H117
According to RNC Pharma data, the 1st half-year was quite animated for the Russian wholesale sector. First, wholesalers initiated several large, if not to say strategic deals: suffice to mention uniting of NatsImBio and Marathon Pharma’s assets as well as ROSTA selling Raduga pharmacy chain. Second, wholesalers initiated several smaller deals in the retail sector: in particular, pharmacy chains Maitre (Bryansk) and DOMpharma (Kolomna) changed their owners. Finally, owners of certain distribution companies diversified their investment portfolios by investing outside the pharmaceutical market.
[PharmVestnik # 26, 29/08/2017, pp. 16-18]
// Insight – Pharmaceuticals
Sales of intra-articular hyaluronic acid injections rebound and go online
According to AlphaRM and RNC Pharma analytical data, imports of intra-articular hyaluronic acid injections for prosthetic joints doubled in real terms over the past 6 years to reach 709,000 packages in 2016. Similar dynamics is observed in value terms as well. Despite the ruble:US dollar exchange rate fluctuations in 2015, analysts forecast growth in the next 10 years. The uptrend is associated with population aging and the fact that the number of arthritis patients increased twofold over the past 12 years.
[PharmVestnik # 26, 29/08/2017, p. 19]
// Insight – Medical Devices
Pharmacy sales of major medical product groups, H117
According to DSM Group data, medical products generate approx. 10% of pharmacy turnover. Major medical product groups account for about 31% of nonpharmaceutical sales. They include more than 100 product types such as contact lens solutions, boot covers, nasal spray etc.
[PharmVestnik # 26, 29/08/2017, pp. 20-21]
// Pharma Retailing
Commercial strategy benchmarking for different-level pharmacy chains
When speaking about pharmacy chain types, one would generally mean that regional-level pharmacies differ from federal and local players. Besides, there are independent pharmacies not associated with any chains. All discussions are mainly about who is stronger, what markets are attractive given a pharmacy chain size as well as about big chains growing even bigger, and small chains battling to survive. At the same time, big players put a lot of efforts to stay afloat, and they need to be better than smaller chains in many ways to remain competitive. Sales monitoring at just two points, i.e. sell-in and sell-out, provides for benchmarking of several key elements characterizing performance of each pharmacy chain type. Analysis was performed by AlphaRM Analytical Agency.
[PharmVestnik # 26, 29/08/2017, pp. 22-23]
// Insight – Pharmacies
Pharmaceutical sales at pharmacies, H117
The Russian pharma market is strongly affected by seasonal factor. A summer drug sales slowdown has been observed for several preceding years due to the end of cold and flu season. Despite that, according to DSM Group data, the market growth factors have appreciably changed in 2017. Thus, if in the past years drug consumption was seriously affected by the recession, and sales growth at pharmacies was due to price factors such as inflation and demand structure change in favor of more expensive drugs, this year the pharma market has been going up because of ascending trend of consumption in real terms.
[PharmVestnik # 26, 29/08/2017, pp. 24-25]
// Pharma Retailing
Uptrend: setting up pharmacies nearby competitors
The street retail crisis in Ekaterinburg made it simpler finding room for pharmacy chains as there are more offers, and the rental rates have plunged. But retail operators from other regions prefer opening pharmacies near those already operating to benefit from competitors’ customer traffic.
[PharmVestnik # 26, 29/08/2017, p. 30]
// Regulatory & Legal
Drug marking detected a drug sold twice through bidding in different Russian regions
Within the framework of the pilot drug marking project, Biocad detected the rituximab biosimilar supplied to Tyumen region for the Seven Diseases Program in a new bidding in Ivanovo region.
[PharmVestnik # 26, 29/08/2017, p. 31]
// Monitoring – EAEU
Drug advertising principles in Belarus
In Belarus, the law “On advertising” is in force. Apart from general requirements stating that advertising must be fair, reliable, and ethical, this law includes specific drug advertising requirements. Foreign manufacturers advertising their medicinal products in Belarus should be aware of them.
[PharmVestnik # 26, 29/08/2017, p. 32]
// Investment – Medical
Providing medical services as profitable as oil production
Medicine is considered the investors’ “safe haven”. Whatever happens, people will seek for medical services and buy drugs. However, in Russia, most investors prefer local oil and gas blue chips such as Gazprom, Lukoil, and Rosneft. Are they the only focus for investors?
[PharmVestnik # 26, 29/08/2017, p. 35]
// Monitoring – SciTech
Digital health startups badly underfunded
The Russian digital health market continues developing rather slowly. Annually, startups are launched in such areas as disease diagnostics, computerization of clinics, doctor and patient social networks, IT-aided drug choice as well as pharma analytics, and drug marketing. Startups raise money through state and corporate grants as well as private investments, but many experts are not impressed by their development dynamics.
[PharmVestnik # 26, 29/08/2017, p. 36]
