With a predicted growth of about 20 per cent, the pharmaceutical market in Russian Federation offers enormous opportunities for foreign pharmaceutical companies seeking to do business with Russia. A whopping143 million consumers make Russia one of the world's biggest market places.
As there is only a limited number of Russian companies that produce for national consumption, the largest part of pharmaceuticals sold in Russia is imported. This is mainly due to lack of modern production facilities that correspond to new Russian and international standards. Modernisation of the Russian pharma production is essential. International companies, who set up their own distribution channels, cooperate with local partners or establish their own production facilities in Russia now, are able to benefit from the huge potential of this market. The Russian pharmaceutical market has been on the rise with a total turnover increase of 16% in 2002, 10% in 2001 and 9.3% in 2000.Experts believe that investment activity on the Russian pharmaceutical market is growing due to the high probability of investments both in distribution and production.
According to the data of the "Retail Audit of Drugs in Russia, conducted by the RMBC since 2000, the volume of the Russian pharmaceutical retail (pharmacy) market in the first half of 2004 amounted for $1.6 Bio. in pharmacy purchasing prices, which is 30 per cent above the same figure of last year. Average retail mark-up increased from 27 per cent in the first half of 2003 to 28.4 per cent a year later.
The top 20 manufacturers represented 44 per cent of the total pharmacy sales by value. All companies from the list increased their sales in absolute values compared to the first half of 2003. Several manufacturers significantly improved their market shares. Thus, Berlin-Chemie / Menarini Pharma G.m.b.H. increased its share by 0.8 p.p. and replaced Gedeon Richter Ltd. on the 2nd position. Servier Pharmaceuticals rose by 0.7 p.p. in terms of share and moved up to the 4th place. On the contrary, the most significant drop of share was registered for GlaxoSmithKline(-0.4 p.p.). Novartis and Bristol - Myers Squibb also decreased their shares (-0.2 p.p. both). The new top 20 entrant is Schering AG.
The ranking of brands demonstrates more significant changes. Thus, 5 of the top 20 trade names are the new entrants in the first half of 2004. Among them are Preductal and Xenical, which have the highest growth rates in terms of sales value in the top 20 list (178 per cent and 68 per cent respectively).
Several trade names from the first half of 2003 top list also significantly increased their sales. Among them are: Crataegi tinctura (grew by 41 per cent), Mezym forte (46 per cent), Actovegin (55 per cent) and Essentiale N (42 per cent). The former leaders: No-spa, Enap and Cavinton increased their sales in absolute figures, but lost their shares and ranking positions. Shares of those products plus Pentalgin-ICN all decreased by 0.1 p.p.
The cumulative share of the 10 leading INNs was about 12 per cent in the first half of 2004. The highest growth rates in terms of shares were achieved by Pancreatin and Crataegi fructus: their shares all grew by 0.1 p.p. compared to the first half of 2003.
The sales of the top 10 ATC classes listed accounted for 39 per cent of the total pharmacy sales in the first half of 2004. Two leading groups, Antibacterials for Systemic Use and Analgesics, have the most significant drop of shares (by 0.6 p.p. and 0.8 p.p. respectively). On the contrary, Sex Hormones and Modulators of the Genital System and Immunomodulating Agents are the leading groups in terms of sales increase (+0.3 p.p. and +0.4 p.p. respectively).
According to the data of the "Hospital Audit of Drugs in Russia", conducted by the RMBC since 2001 the value of drugs purchased by hospitals accounted for $405 Mio. in purchasing prices. This is 23 per cent more than a year ago ($330 Mio.).
Sanofi-Synthelabo and Pfizer are the leaders by sales value for the analyzing period. They occupy 8% of the total hospital purchases value.Both of the leaders increased their sales values, but Sanofi rose faster than the whole segment (+61 per cent) and Pfizer with the average hospital market rate (+23 per cent). Other companies among the top 20, which had outstripping growth rates, are: AstraZeneca (+66 per cent), Bristol - Myers Squibb (2 times), Lek (+61per cent), Eli Lilly (+63 per cent), Medochemie (4 times), Abolmed (+63 per cent), Novo Nordisk (+45 per cent), Berlin-Chemie / Menarini Pharma (+64 per cent) and Synthez (+71 per cent).
On the other hand, several out of the 20 leading manufacturers didn't increase by value or even decreased. Among them are: Aventis Intercontinental (-21%), F. Hoffmann-La Roche (-14 per cent) and GlaxoSmithKline (+3 per cent).
Due to the lower growth rates or decrease of sales, three companies left the 20 leaders list in H1 2004: Merck Sharp & Dohme Idea Inc. (-4 per cent) dropped from the 16th to 21st place, Janssen Pharmaceutica NV (+4 per cent) failed 3 positions and occupies 23rd place only and Schering-Plough (-39 per cent) which was 15th in H1 2003 and went down to the 32nd position a year later.
The majority of the 20 leaders in the hospital equipment sector are foreign manufacturers; two out of the rest companies in the list are domestic manufacturers. Totally the top 20 list is rather stable - 17 members are the same within the analyzing periods.
As for the leading trade names, there are noticeable changes among the top 20. Several best sellers of Y2003 dropped: Tienam (moved from the 8th to 16th place), Cefobid (from the 7th to 17th place) and Taxotere (from the 4th to 39th place). Taxotere decreased its hospital sales value by 60 per cent in H1 2004 compared to the same period of 2003. Another drugs which were present among the top 20 in H1 2003 and dropped are: Rocephin (-30 per cent), Ampicillin (-14 per cent), Claforan (-53 per cent), Cavinton (0 per cent), Neupogen (-22 per cent) and Essentiale N (-11 per cent). All of these drugs occupies from 12ve till 19th places a year ago.
On the other hand, Medocef increased most of all the 20 leading drugs. Its sales value rose in 7.8 times compared to the H1 2003. Thus, the above mentioned improving of its manufacturer, Medochemie, has taken place. Other fast growing brands are: Gemzar (3 times), Zyprexa (2.1 times), Rispolept (+97 per cent), Sulperason (+80 per cent), Meronem (+79 per cent) and Amoksiklav (+72 per cent). Totally 13 trade names from the H1 2004 top 20 list entered the ranking a year ago.
- RMBC