Market Overview

Factors defining the RF pharmacy market growth

• Sustained growth of welfare-related parameters like per capita income, consumer spending, etc.
• Consumption shift towards more expensive medicines for practically all brackets of population and high demand for modern (advanced) medical drugs
• National social policy — introduction of new approaches to medical drug provision financing
• Incidence rate in a wide range of nosology
• Increasingly attractive Russian pharmaceutical market

Characteristics of the retail pharmaceutical market

• The retail pharmacy market includes the medicine market, pharmaceutical products, cosmetics and hygiene products, as well as accompanying fast-moving goods the sales of which are permitted in pharmacies.
• 2008 was a year of high growth of the pharmaceutical market in Russia. According to the research agency DSM Group commercial segment grew by 26% in ruble terms.
• In 2008, the aggregate share of the first 10 pharmacy chains in Russia was 22% in comparison with 21% in 2007 (for reference, in 2002 – only 5%). It is estimated that by 2010 as a result of the consolidation process 4-5 largest pharmacy chains will control up to 30% of the domestic market.
• According to Pharmexpert the Russian pharmaceutical market in 2008 was USD 16.2 billion which is 29% higher than in 2007. The per capita consumption of medical drugs amounted to around USD 114, i.e. an average each person consumed worth of RUB 2 834 in 2008.
• According to Pharmexpert commercial sector of the Russian pharmaceutical market in 2008 reached USD 8.97 bn at wholesale prices (+ 28% vs 2007); in packs, there was a 1% growth. Before 2008, commercial segment of the pharma market had been developing dynamically: the average growth rate (USD) was 24% in 2006 and 34% in 2007; the market volume was stagnating in packs, a maximum growth not exceeding 6%.
• In 2008, the average price growth rate in the commercial segment was 28% (largely due to the ruble devaluation). However, notwithstanding the relatively stability of the currency market in 2007 the average drug price growth rate equaled 34%.
• In 2008 the state segment also demonstrated growth which is mainly associated with the Drug Reimbursement Program (DLO). It was allocated a total of RUR 73 bn to finance DLO program (≈ 2.9 USD 2.9 bn). According to the monitoring data provided by healthcare authorities of the constituent entities of the Russian Federation in 2008, medicinal products for the total amount of RUR 66.2 bn were supplied to regions (32% higher compared to that in the same period of 2007). As a result, 61.0 million prescriptions were serviced for RUR 57.3 bn (≈ USD 2.3 bn).
• The share of accompanying products and parapharmacy has enjoyed steady sales growth in the structure of commercial sector sales. In 2008, the sales growth of para-pharmaceutical products distributed through pharmacies was 28% compared to 2007 which equates to USD 4 bn in consumer prices.

Market Size Trend

Retail prices, USD million, VAT incl.

2005—2012** Market Size Forecast

Retail prices, USD million, VAT incl.

* Hereinafter the market data and industry standing data according to research agency Pharmexpert.
** Forecast. Source: Research Agency Pharmexpert.