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Russia holds immense potential for pharma growth
A D Pradeep Kumar , Mumbai | Thursday, November 5, 2009, 08:00 Hrs  [IST]

The economic crisis notwithstanding, Russia remains a major opportunity for pharmaceutical growth and a vital and complex market with a high level of hitherto unmet needs. Essentially, the drive to improve healthcare provision has had a positive impact on the pharmaceutical industry to date and will continue to do so, according to David Campbell, senior principal, Product Portfolio Strategy, ORG IMS Research Pvt. Ltd.

The Russian economy is forecasted to improve in 2010 and Russia is expected to be among the fastest to recover after the crisis. The Russian market is expected to remain relatively buoyant, and it is one of the strongest of the seven ‘pharmerging markets’ which include Brazil, China, India, Mexico, South Korea and Turkey, delivering a strong double-digit annual growth over the coming years, he said.

According to him the Government plans for healthcare expansion were based on a much higher oil-price and with 40 per cent of GDP linked to the oil industry, the financial crisis will set back prospects for much-needed reform of the healthcare system and funding is being challenged by significant exchange rate volatility. Also, the government’s own finances will deteriorate through 2009, while sharp increases in unemployment will limit the ability – and willingness – of patients and their employers to contribute financially to an insurance-based universal reimbursement scheme.

In an environment highly dependent on patients’ ability to pay, reforms have sought to expand the provision of healthcare, and in 2005 the Beneficiary Drug Provision Program (DLO) was established to provide subsidized pharmaceuticals in the outpatient sector.  The scheme started with nearly 15 million potential beneficiaries but the number has fallen dramatically to five million in 2009 as eligible people opted out and instead, took a cash payment to purchase their drugs. In 2008, the government unveiled plans to build on a 2005 reform package to extend the average life expectancy from 65 years to 75 years by 2020. Some further improvement in levels of public sector provision will be witnessed this year and next, but major structural reform now appears unlikely for some years to come.

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