Russia's commercial retail pharmaceutical market grew in value by 11% year-on-year, in local currency terms, during 2012; meanwhile, Japanese pharma major Eisai has announced the opening of its representative office in the country.
IHS Global Insight perspective | |
Significance | The value of Russia's commercial retail pharmaceutical market rose by 11% year-on-year during 2012 in local currency terms, reaching USD16.8 billion. Meanwhile, major Japanese pharmaceutical company Eisai has recently announced the opening of its representative office in Moscow. |
Implications | The market's volume reportedly fell by 3%, indicating a continued shift in favour of high-cost innovative drugs on the Russian market. |
Outlook | This same trend can be expected to continue, as emphasised by the arrival of Eisai onto the Russian market, as it seeks to benefit from the continued growth observed in Russia while sales on major EU markets stagnate or decline. |
Russia's retail pharma market grows 11% y/y in 2012
Russia's commercial retail pharmaceutical market grew by 11% year-on-year (y/y) in local currency terms during 2012, to reach a total value of RUB521 billion (USD16.8 billion), reports Russian pharmaceutical news provider Pharmvestnik, based on data from IMS Health. In US dollar terms, the market's growth was reported to be 6% y/y. In volume terms, in contrast, it is reported that the market declined by 3% y/y, with the total number of packages reaching 4.4 billion.
Top 10 remains almost unchanged
In terms of the top companies on the Russian market, according to IMS Health's data the top 10 has remained remarkably consistent, with only a change between the eighth and ninth positions, with Abbott (US) overtaking Gedeon Richter (Hungary) into eighth, and Richter falling to ninth.
Top 10 pharmaceutical companies in Russia by sales value, commercial retail sector (% USD), 2012 | |||||
Ranking 2012 | Ranking 2011 | Company | Market share, 2012 | Market share, 2011 | Sales growth (%) 2011-2012 |
1 | 1 | Novartis (Switzerland) | 6.56 | 6.46 | 13.0 |
2 | 2 | Sanofi (France) | 5.45 | 5.54 | 10.0 |
3 | 3 | Pharmstandard (Russia) | 4.56 | 5.07 | 0.3 |
4 | 4 | Bayer Healthcare (Germany) | 4.04 | 3.83 | 18.0 |
5 | 5 | Nycomed/Takeda (Switzerland/Japan) | 3.44 | 3.45 | 11.0 |
6 | 6 | Servier (France) | 3.24 | 3.16 | 14.0 |
7 | 7 | Teva (Israel) | 2.93 | 2.77 | 18.0 |
8 | 9 | Abbott (US) | 2.79 | 2.72 | 15.0 |
9 | 8 | Gedeon Richter (Hungary) | 2.57 | 2.74 | 5.0 |
10 | 10 | Stada (Germany) | 2.44 | 2.47 | 10.0 |
Source: Pharmvestnik, IMS Health | |||||
Eisai announces establishment of new office
Meanwhile, Japanese pharmaceutical major Eisai has announced that it has opened a representative office in Moscow that will be responsible for the company's sales and marketing in Russia, which coincides with the launch on the Russian market of its breast cancer treatment Halaven (eribulin mesylate). As revealed in a press release, Halaven is due to be launched in Russia in the second quarter of 2013.
Gary Hendler, president and CEO of Eisai in Russia, Europe, Africa, and the Middle East, has stated that the company has a number of products in the late approval stage in Russia and is hoping to launch four or five products within one year of establishing its Russian office. Entry into the Russian market is part of the company's "Hayabusa" mid-term strategic plan, as laid out in 2011 (see Japan: 4 March 2011: Eisai Shifts Business Focus from US, EU to Asia, New Mid-Term Strategic Plan Revealed).
Outlook and implications
Looking at figures given for the Russian market by local market research organisation DSM Group, it can be seen that the IMS Health data show slightly lower growth in terms of value, and similarly a slightly greater decline in volume terms (see Russia: 4 February 2012: Russian pharmaceutical retail sector grows 13.6% in value during 2012). Comparing with the top 10 companies for the entire Russian market (i.e. not just the commercial retail sector) for 2011, as compiled by DSM Group, it can be seen that the top two are the same companies in both cases, although Sanofi tops the overall market, while another Swiss major, Roche, is the fourth largest company overall, but is not even present in the top 10 in the commercial retail sector.
The top 10 underlines the growing importance of high-cost imported medicines on the Russian market, as indicated by the high growth figures for companies such as Bayer Healthcare and Abbott, while only Teva – of the three companies in the top 10 mostly engaged in the production of generics – was able to emulate the same kind of growth. This trend of growing importance for high-cost drugs is emphasised by the decline in the market's volume, while the value continues to rise in double-digit figures, indicating a continued rise in the average price of medicine packages consumed.
Eisai's entry on to the Russian market underlines this trend further. The company has already launched one product on the Russian market (see Japan - Russia: 27 June 2012: Russian Ministry of Health Grants Marketing Authorisation for Eisai's Zonegran). Over the coming years, Eisai can be expected to benefit from the increasing trend in favour of more expensive, innovative drugs in Russia, and while sales in the largest European Union markets stagnate, sales in Russia are likely to grow dynamically.