Russia's pharmaceutical market grew 14% year on year in value terms to RUB1.045 trillion (USD28.91 billion) in 2013.
IHS Global Insight perspective | |
Significance | The Russian pharmaceutical market's value amounted to RUB1.05 trillion (USD28.91 billion) in 2013, a 14% year-on-year (y/y) growth. In terms of volume, however the market declined by 2% y/y. |
Implications | Apart from one Russian company, the top 10 manufacturers on the market were foreign manufacturers, potentially, pointing to the continued dominance of foreign manufacturers. |
Outlook | With a 14% y/y growth in 2013, preceded by 12% y/y increase in 2012, the Russian market continues to be an attractive market for pharmaceutical companies. The market has been forecast to grow by 12% y/y in 2014. |
Russia's pharmaceutical market increased 14% year on year (y/y) in value terms in 2013, amounting to RUB1.05 trillion (USD 28.91 billion). As per market data presented by DSM Group at the conference entitled "Pharmaceutical Business in Russia 2014: Growth Factors", y/y increase in value terms was reported across all of the segments of the market: commercial, government segment (which includes the reimbursement programme DLO and the hospital segment), and parapharmaceuticals, with these increasing between 13-14% y/y. In particular, the 14% y/y growth in 2013 in the government segment of the market follows the 4% y/y growth in 2012. Separately, as per the data, in 2013 the "inflation" on drugs increased 6% y/y for the commercial segment, and 1.2% y/y in the hospital segment. On the other, hand the DLO segment reported a 2.3% y/y decline.
Pharmaceutical market value (RUB bil.) | |||||
Segment | 2013 | %change | 2012 | % change | 2011 |
Commercial | 609 | 13 | 537 | 15 | 468 |
Government segment | 267 | 14 | 234 | 4 | 226 |
Parapharmaceuticals | 169 | 14 | 149 | 14 | 130 |
Total | 1,045 | 14 | 919 | 12 | 824 |
Unlike 2012, when the volume of the market remained virtually unchanged compared to 2011, in 2013 the market declined 2.1% y/y to around 5.5 billion packages. The decrease in volume terms was reported for all the market segments, with the DLO segment in particular decreasing 10% y/y in 2013. In 2012, the DLO segment fell 14% y/y in volume terms.
Pharmaceutical market volume (mil. packages.) | |||||
Segment | 2013 | %change | 2012 | % change | 2011 |
Commercial | 4,429 | -0.6 | 4,458 | 0.1 | 4,454 |
Hospital segment | 956 | -7.9 | 1,038 | 1.9 | 1,019 |
DLO | 75 | -10.4 | 83 | -14.0 | 97 |
Total | 5,460 | -2.1 | 5,579 | 0.2 | 5,570 |
In terms of the top 10 manufacturers on Russia's market, Pharmstandard continued to be the only Russian company to fall in the list, with its market share being almost 4%. The top 10 manufacturers also included Abbott (US), Bayer (Germany), and Roche (Switzerland),
Top five manufacturers | ||
Rank | Manufacturer | Market share |
1 | Sanofi-Aventis (part of Sanofi, France) | 5.3% |
2 | Novartis (Switzerland) | 5.1% |
3 | Pharmstandard | 3.7% |
4 | Teva (Israel) | 3.2% |
5 | Takeda (Japan) | 3.2% |
Outlook and Implications
Although the data presented at the conference did not include a breakdown for the value of the DLO and hospital market, it was reported earlier that the hospital and the DLO segments of the market increased by 17.19% and 5.99% y/y respectively (see Russia: 12 February 2014: Russian pharmaceutical market grows 16% in Q4 2013).
Separately, although the y/y change in the value of imports was not included, the report nonetheless pointed to the continued dominance of foreign producers on the Russian market, with all but one of the top 10 manufacturers being foreign companies. This comes despite the Russian government's continued efforts to boost domestic manufacturing, and increase the share of domestic manufacturers on the country's market. For that purpose, the government had previously announced it would aim to increase the volume of domestic production of medicines on the country's list of vital and essential drugs (ZHNVLP) to 90% by 2018 and the total share of domestically-produced pharmaceuticals and medical products consumed in the country to 48% by 2020 (see Russia: 10 May 2012: Russian president signs decree onimprovement of public health policy and Russia: 12 September 2012: Volume of investment in Russian pharma industry will increase to 27–29% of total production by 2020).
Overall, Russia's pharmaceutical market in 2013 continued its dynamic growth following a 12% y/y increase reported for both 2012 and 2011. In 2014, the market has been forecast to grow 12% y/y in value to RUB1.174 trillion, with the commercial segment of the market expected to increase 14% y/y to RUB691 billion and the government segment 8% y/y to RUB289 billion.