Strategic Analysis of the Russian Pharmaceutical Market

Frost & Sullivan, January 2011, Pages: 89

This research service titled Strategic Analysis of the Russian Pharmaceutical Market provides a thorough analysis of the challenges, drivers and restraints of the market against a backdrop of the economic slowdown as well as recent legislative changes and competitive profiles of the key participants.

Market Overview

Government Initiatives to Spur Sustained Expansion of the Russian Pharmaceutical Market

With total revenues of $15.3 billion in 2009, the Russian pharmaceutical market is one of the largest in the world. The market is anticipated to remain on a path of dynamic growth from 2010 to 2016 mainly due to multiple initiatives of the Russian Government. However, in the short term, the process of implementing legislative changes could slightly restrain the market’s development. The Russian state’s policy of improving the demographic situation in the country and providing adequate healthcare services to its population is projected to be one of the main pillars for the expansion of the pharmaceutical market. “Multiple initiatives undertaken by the Government aim at enhancing pharmaceutical provision in Russia,” notes the analyst of this research service. “Through amending the law and declaring its support for domestic industry, the Russian Government appears to be a guarantor of pharmaceutical market growth.”

For example, the 2020 Pharmaceutical Development Programme (Pharma 2020) aims at strengthening domestic manufacturers of pharmaceuticals. It seeks to ensure that by 2020, at least 50 per cent of pharmaceuticals (in value terms) circulated in Russia will be of domestic origin. Introduced in September 2010, Federal Law # 61, ‘About Circulation of Medicines’, simplifies the circulation of drugs and makes authorisation procedures faster and more transparent. Moreover, implementation of pharmaceutical insurance has been planned as a part of the 2020 Healthcare Development Programme.

Legislative Changes Act as a Double-edged Sword - Promote Long-term Growth, but Short-term Uncertainty

Uncertainty in the legislative environment, resulting from multiple changes in pharmaceutical law, could potentially restrain growth of the Russian pharmaceutical market during the short term. “Russian legislation in regards to pharmaceuticals has witnessed numerous changes in recent years with the Government working on multiple legislative transformations, including ZLVLS List, GMP introduction and Pharma 2020, among others,” remarks the analyst. “Although new legislation should not necessarily restrain the market development but rather bring clarity and coherence, the expectation process per se is likely to stretch through 2010 and early 2011, temporarily restraining the market’s development.”

Although the Russian Government has announced and explained a number of amendments, there are many questions that remain unanswered. The best strategy in this case is to closely observe the market and follow new declarations and proposed changes. “The changing legislative environment can bring significant benefits for pharmaceutical manufacturers,” concludes the analyst. “For instance, companies which decide to establish production facilities in Russia, can count on government support and preferential treatment.” Nevertheless, companies need to closely observe the changes to assess their impact on potential growth opportunities.

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

- Commercial retail
- Reimbursement (DLO)
- Hospitals

1. Introduction
1.1 Aim, Objectives and Research Methodology
1.2 Market Segmentation and Definitions Used
1.3 Scope of the Research

2. Executive Summary
2.1 Introduction
2.2 Market Overview
2.3 Market Segmentation
2.4 Market Drivers and Restraints and Industry Challenges
2.5 Summary of Major Findings

3. Overview of Russian Healthcare System

4. Analysis of the Total Russian Pharmaceutical market
4.1 Market Overview
4.2 Regulatory Framework
4.3 Industry Challenges
4.4 Market Drivers
4.5 Market Restraints
4.6 Market Revenue Forecasts
4.7 Key Market Trends

5. Commercial Retail Market Analysis
5.1 Market Overview
5.2 ATC Analysis
5.3 Overview of Over-the-counter and Prescription Sub-segments
5.4 Revenue Forecast

6. Reimbursement (DLO) Market Analysis
6.1 Regulatory Framework
6.2 Market Overview
6.3 ATC Analysis
6.4 Revenue Forecast

7. Hospital Market Analysis
7.1 Regulatory Framework
7.2 Market Overview
7.3 ATC Analysis
7.4 Revenue Forecast

8. Competitive Landscape for the Russian Pharmaceutical Market
8.1 Competitive Landscape
8.2 Profiles of Selected Market Participants

9. Conclusions

10. Appendix

11. Abbreviations

12. Research Methodology in Depth

13. About Frost & Sullivan

List of Figures:

Pharmaceutical Market: Market Segmentation (Russia), 2009
Pharmaceutical Market: Market Segmentation (Russia), 2009
Pharmaceutical Market: Industry Challenges, Market Drivers and Restraints (Russia), 2010-2016
Pharmaceutical Market: Current and Future Trends by Segment (Russia), 2009-2016
Healthcare System: Organization of the Healthcare System (Russia), 2009
Healthcare System: Number of Hospital Beds (Russia), 2008
Healthcare System: Number of Physicians by Specialization (Russia), 2008
Healthcare System: Healthcare Insurance Scheme (Russia), 2009
Healthcare System: Rates of Social Insurance Contributions (Russia), 2010 and 2011
Pharmaceutical Market: Geographic Market Segmentation (Russia), 2009
Pharmaceutical Market: Key Regulatory Changes in Pharmaceutical Market (Russia), 2009
Pharmaceutical Market: Pharma 2020 Expenditure Breakdown (Russia), 2009-2020
Pharmaceutical Market: Industry Challenges (Russia), 2010-2016
Pharmaceutical Market: Market Drivers Ranked in Order of Impact (Russia), 2010-2016
Pharmaceutical Market: Market Restraints Ranked in Order of Impact (Russia), 2010-2016

List Of Charts:

Pharmaceutical Market: Volume Indices of GDP Production (Russia), 2009
Healthcare System: Population Size (Russia), 1989-2009
Healthcare System: Average Life Expectancy at Birth (World), 2009
Healthcare System: Per Cent of Causes of Death (Russia), 2008
Healthcare System: Number of Hospitals (Russia), 1992-2008
Healthcare System: Number of Physicians (Russia), 1992-2008
Healthcare System: Total Healthcare Expenditure (Russia), 2006-2009
Healthcare System: 2020 Healthcare Development Programme Projections for Healthcare Expenditure (Russia), 2010-2020
Pharmaceutical Market: Market Revenue and Growth Rate in US Dollar Terms (Russia), 2006-2009 Pharmaceutical Market: Market Revenue and Growth Rate in Ruble Terms (Russia), 2006-2009
Pharmaceutical Market: Pharma 2020 Objective for Pharmaceutical Market Structure (Russia), 2009 and 2020
Pharmaceutical Market: Breakdown between ZNVLS and Other Drugs by Value (Russia), 2009
Pharmaceutical Market: Breakdown between ZNVLS and Other Drugs by Volume (Russia), 2009
Pharmaceutical Market: Revenue Forecasts (Russia), 2006-2016
Pharmaceutical Market: Market Revenue Forecasts by Segment (Russia), 2006-2016
Pharmaceutical Market: Percent of Revenues by Segment (Russia), 2009 and 2016
Pharmaceutical Market: Percent of Revenues by Type of Drugs (Russia), 2009
Pharmaceutical Market: Revenue Forecasts for Generics (Russia), 2006-2009
Pharmaceutical Market: Breakdown by ATC Groups (Russia), 2008 and 2009
Pharmaceutical Market: Foreign versus Domestic Production (Russia), 2008
Pharmaceutical Market: Structure of Pharmaceutical Prices (Russia), 2009
Pharmaceutical Market: Revenue for Commercial Retail Market (Russia), 2006-2009
Pharmaceutical Market: Breakdown of the Commercial Retail Segment by ATC (Russia), 2006-2009
Pharmaceutical Market: Breakdown of the Commercial Retail Segment into Prescription and OTC Drugs (Russia), 2009
Pharmaceutical Market: Revenue Forecasts for Commercial Retail Market (Russia), 2006-2016 Pharmaceutical Market: Revenue for Reimbursement Market (Russia), 2006-2009
Pharmaceutical Market: Breakdown of Reimbursement Market (DLO) by ATC (Russia), 2006-2009 Pharmaceutical Market: Revenue Forecasts for Reimbursement (DLO) Market (Russia), 2006-2016 Pharmaceutical Market: for Hospital Market (Russia), 2006-2009
Pharmaceutical Market: Breakdown of Hospital Market by ATC (Russia), 2007-2009
Pharmaceutical Market: Revenue Forecasts for Hospital Market (Russia), 2006-2016
Pharmaceutical Market: Company Market Share by Revenues (Russia), 2009
Pharmaceutical Market: Company Market Share by Revenues for Commercial Retail Market (Russia), 2009
Pharmaceutical Market: Company Market Share by Revenues for the Reimbursement Market (Russia), 2009
Pharmaceutical Market: Company Market Share by Revenues for the Hospital Market (Russia), 2009

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