To be driven by Pharma 2020 Strategy
Russia's over-the-counter medicines market, which increased by 12% to RUB480bn (US$16.4bn) at the manufacturers’ level in 2011, holds much potential for pharmaceutical companies, according to a new study by global research and consulting firm Kline & Company.
Although a slight fall in growth was observed compared with the previous year, the Russian market remains robust compared with the US market’s 2.4% growth and the 15% of neighbouring emerging market China.
The OTC drug segment in Russia takes a significantly larger share of sales than prescription drugs
According to the report, Emerging Markets Rx-to-OTC Switch: Forecasts and Opportunities, the OTC drug segment in Russia takes a significantly larger share of sales than prescription drugs at nearly 66% of the total pharmaceutical market. The OTC segment also posted a 14.2% growth in 2011, while the prescription market, tempered by a decrease in state budget allocations, saw growth of just under 9.0%.
Factors shaping current market dynamics in Russia include an increase in medication costs and consumers’ growing purchasing power, the study says. Among the positive factors driving sales is the implementation of new regulations under the Russian government’s $4bn Pharma 2020 Strategy to increase the amount of drugs manufactured in the country.
Foreign companies are largely driving pharmaceutical innovations in Russia, while local companies tend to focus on the manufacture of generic alternatives of innovative drugs, the report says. Local brands claim only 20% of the market and one of Pharma 2020 Strategy’s goals is to increase this to 50%.
Kline & Company estimates that the Russian OTC market will increase by a compound annual growth rate (CAGR) of 11.5% by 2016. Sales growth forecast for 2013 and beyond will come through price increases for products not included in the Vital and Essential Drugs List (EDL) and expansion of the Additional Medicines Supply (DLO) programme, which provides pensioners and low‐income families with free medicine.