Currently growing at double the rate of the global pharmaceutical market which is over 10 per cent annually, the Russian pharmaceutical market is one of the fastest developing markets.
Russia is benefiting from a growing economy and with the increased healthcare investments being made by the government, the market is set to enjoy a sustained and prolonged period of expansion.
The Russian pharmaceutical market is experiencing a grand period of expansion, four years into its Pharma 2020 plan. With increased support from the government, coupled with the desire to increase domestic production by 50 per cent, the Russian pharma landscape is proving to be a very attractive venture for international buyers and suppliers looking to break into this market.
The Russian market experienced high double-digit growth in recent years and is positioned firmly at the forefront of pharmerging markets. Russia is currently the eleventh largest pharmaceutical market in the world.
As with the other BRIC (Brazil, Russia, India, and China) nations, Russian pharmaceutical market offers strong growth potential. In 2012, the market was valued at $17.1 billion and grew at a compound annual growth rate (CAGR) of 17.7 per cent between 2008 and 2012 . The market is expected to grow at a CAGR of between eight and 11 per cent for the period of 2013 to 2017 and reach between $23 billion and $33 billion by 2017.
The Russian Government's ambitious Pharma 2020 plan, introduced in 2009, includes funding of nearly US$ 5 billion and seeks to dramatically increase domestic pharmaceutical manufacturing and R&D capabilities.
As a result of the Pharma 2020 plan the demand for international pharmaceutical ingredients and manufacturing and packaging equipment will be increasing dramatically in order to upgrade existing manufacturing sites to GMP standards.
Innovation and local production are the key features of the Russian government initiative launched in 2009 on the topic: "development of the pharmaceutical and medical industry of the Russian Federation until 2020". Its aim is to aid the transition of the pharma industry to an innovative model of development. The program assumes financing to the tune of 177.6 billion rubles ($4.8 billion). One of the primary goals of the program is to increase the local production of drugs at least 50 per cent of consumption. Currently this proportion is less than 20 per cent.
The policy document lists the major systemic problems of Russia's pharmaceutical industry. They include an imbalance of regulatory requirements facing Russian as opposed to foreign producers, the lack of economic motivation of domestic producers, and a shortage of highly qualified staff. Other problems affecting the industry are a shortage of financing for drug production, insufficient protection of intellectual property rights and the need to raise quality in line with Good Manufacturing Practices (GMP).