The Russian pharmacy market has been gradually shifting over to reporting the results for five-year periods. This way, it is easier to make optimistic statements than when reporting annual results. There are changes underway on the market, and while some pharmacy chains masterfully swim upstream, others look for a safe harbor. There are two initiatives that may fundamentally change the market environment and that are rejected categorically by the business community, i.e. legalization of online drug sales and drug sales through FMCG channels. This attitude was emphasized by the leading players of the pharmacy market during the recent pharmacy summit “Effective management of a pharmacy chain”.
[PharmVestnik # 07, 27/02/2018, p. 4]
// Market Research
A new player will emerge on the pharma market that will set up its own rules
The market players that have been lobbying the drug marking idea not only to generate transparent traffic but also analytical data covering the pharma market overall are confused. Shortly, the Center for Advanced Technology Development, the private-public entity that currently provides technological support of the project, may emerge as a steward of a big drug marking database. Pharmaceutical manufacturers feel being jerked with data access, with complete control over the database being given to private third-party companies. A major new player associated with Alisher Usmanov’s USM Holdings and Alexander Galitsky’s Elvis Plus may emerge on the market. Control over pharma market data will give birth to a new niche not only in terms of analytical research but also in terms of soft- and hardware development. Analysts estimate that this niche may reach 9B RUB by 2019.
[PharmVestnik # 07, 27/02/2018, p. 6]
// Digital Health
Budgets keep «dissolving» in medical digital space
At the Digital Health Convention conference held on 16 February in Moscow, analysts spoke about 50B RUB of budgetary funds absorbed by healthcare IT solutions so far. According to various expert estimates, this is half of the funds required to digitalize the health industry overall. However, the digitalization program is still in its infancy. The MoH’s IT Department has a shortage of skilled specialists, and the Expert Panel has not met for several years.
[PharmVestnik # 07, 27/02/2018, p. 10]
// R&D – Pharma & Medical
Scientists seek ways for import substitution in nuclear medicine
In 2015, the Russian Government approved a roadmap for the development of nuclear medicine centers. Among other things, the project provides for amendments to the Federal Target Program ‘Pharma-2020’, drafting a sector-wide plan for the development of radiopharmaceutical production as well as nuclear medicine equipment. Russia has inherited well-developed engineering capabilities for nuclear medicine, but after several decades of underfunding, there is a gap from international advances in the area. The ways to bridge the gap were discussed at the 1st conference of the Russian national cancer and radiology centers on 8 February.
[PharmVestnik # 07, 27/02/2018, p. 10]
// Pharma Industry – General
Summing up Pharma-2020
The Ministry of Industry and Trade has summed up the interim results of the Pharma-2020 strategy implementation and has already started working on a new document that will include mechanisms to support a rapid development of the pharma industry until 2030. The priorities will differ from those for the Pharma-2020 program with a major focus on innovations. Deputy Minister of Industry and Trade Sergey TSYB released this information during the 13th International Conference ‘Pharmaceutical Business in Russia: a 2018 market outlook’.
[PharmVestnik # 07, 27/02/2018, p. 11]
// Pricing – Pharma
The new pricing procedure to hurt more than just drug manufacturers
In Russia, there is a property rights protection system in place, but, despite this, originator drug manufacturers state that that their property rights are being disregarded. There is another major concern not only for originator but also for generic manufacturers, namely, new VED pricing approaches. The main objective behind these approaches is driving prices down. But whose margin is to be sacrificed? This issue was the focus of the interview with Sanofi Eurasia CEO Naira ADAMYAN within the framework of the conference ‘Pharmaceutical Business in Russia 2018’.
[PharmVestnik # 07, 27/02/2018, p. 12]
// Regulatory & Legal – Pharma Retailing
Drugs selling at food stores carry a threat nation-wide
Representatives of pharmacy associations, pharmaceutical manufacturers, distributors, and healthcare experts jointly oppose the bill permitting to sell drugs through FMCG retail channels. They made their comments on the bill drafted by the Ministry of Industry and Trade during the “zero reading” at the Public Chamber.
[PharmVestnik # 07, 27/02/2018, p. 13]
// Regulatory & Legal – General
Pharma wants to unite regulatory authorities
The conference ‘Pharmaceutical Business in Russia 2018’ traditionally marked the beginning of a new business year. Analysts summed up the 2017 results and shared their 2018 forecasts. Heads of pharmaceutical companies, economists, and representatives of industry-specific associations tried to understand whether the existing regulatory environment provided for the forecasts coming true.
[PharmVestnik # 07, 27/02/2018, p. 14]
// Insight – Pharmacies
Pharmacy market, 2017: a report
According to IQVIA, the pharmacy sector failed to make its traditional annual finishing kick in the 4th q 2017. Obviously, the Russians tend to overcome seasonal disorders backed by their innate resources.
[PharmVestnik # 07, 27/02/2018, pp. 20-21]
// Insight – Specialized Media
Pharmaceutical advertising in specialized print media, Q1-317: a report
The market of pharmaceutical advertising in specialized print media has stopped growing for the first time over the past five years. According to Ipsos Healthcare, as of the first three quarters of 2017, the size of the market in question in Russia was 1.3B RUB, which indicated zero growth year over year. However, in 2016, the same market size was indicative of a 22% growth in value terms, and a 11% growth in real terms (the number of advertising blocks).
[PharmVestnik # 07, 27/02/2018, p. 22-23]
// Insight – Cosmeceuticals
Cosmeceutical market, 2017: a report
According to DSM Group, cosmetic products selling at pharmacies are stable under financial and other turbulences of the recent years. Sales have been trending up year over year. In 2017, 182.6M units of cosmeceuticals were sold in Russia, up by 2.6% year over year. In value terms, sales reached 44.5B RUB to exceed the 2016 level by 6.3%.
[PharmVestnik # 07, 27/02/2018, pp. 24-25]
// Cartels
Regional pharmacy chains complain about dumping practices of federal pharmaceutical retailers
Chelyabinsk pharmaceutical retailers filed a complaint with the regional department of the Federal Antimonopoly Service in respect of cartel practices used by certain federal pharmacy chains. According to the complainant parties, Zhivika, Vita, and Apteka Ot Sklada pharmacy chains devastate the competitors through dumping. While the authority is looking into the case, the local players call on each other to close the ranks.
[PharmVestnik # 07, 27/02/2018, p. 26]
// Court Action
Escom may be forced to pay for construction of pharmaceutical cluster infrastructure
The Stavropol territorial government filed a court application on the cancellation of the investment agreement made with pharmaceutical concern Escom in 2011. The plaintiff also claims damages incurred due to funding the pharmaceutical cluster project as the respondent party has failed to build an antibiotic manufacturing facility. Similar efforts made by Stavropol administration before have not yielded any results.
[PharmVestnik # 07, 27/02/2018, p. 27]
// Pharma Manufacturing
Manufacturers aim at producing originator drugs and outqualifying imports
In early February, St. Petersburg media started mooting the issue of stagnation at the local pharmaceutical cluster pointing to the decreased drug output in 2017 vs. 2016, whereas there was a 42% growth in 2016. Some experts believe that this decrease indicates that import substitution has reached its limits. Others think that everything works out well, although not as fast as before.
[PharmVestnik # 07, 27/02/2018, p. 28]
// Monitoring – EAEU
In Kazakhstan, beneficiary drug coverage problems relate to subjective root causes
Back in the Soviet time, problems related to supplying pharmacies with drugs for the coverage of eligible beneficiaries used to emerge in the beginning and end of every year. The drug procurement funds had been either not allocated yet or already expended. The Soviet Union has been nonexistent for many years; however, the problem persists.
[PharmVestnik # 07, 27/02/2018, p. 28]
