Pharmacy Chain 36.6 launches federal retail import substitution program

April 26, 2010, MOSCOW — OJSC Pharmacy Chain 36.6 have signed a contract under which it will supply its private label goods (PL^[1]) to pharmacies of the state unitary enterprise (SUE) «BryanskFarmatsia» (“Pharmacy of Bryansk”) and LLC «Farmatsia» (“Pharmacy”). First 500 thousand ruble worth order for bestseller parapharmaceutical items will be shipped to pharmacies of the Bryansk region within two weeks. Likewise, a letter of intention was signed with SUE “Gubernskie apteki” (“Provincial Pharmacies”) from the Krasnoyarsk region. A number of the state unitary enterprises from the Tver and Tula regions as well as from other regions of the Central Federal District (CFD) have expressed interest in the project.

The project is the logical extension of the Federal retail import substitution program which was presented by Sergey Krivosheev, Chairman of the Board of Directors of Pharmacy Chain 36.6 on March 12^th at the meeting with an Authorized representative of the President’s Council of the Russian Federation in CFD. As of today, shielding domestic producers has strategic importance for further development of the pharmaceutical industry. The program envisages action-oriented proposals that will strengthen competitive position of the parapharmaceuticals industry in Russia, and will promote distribution of 36.6 PL goods in SUEs in order to provide the population of the regions with an opportunity of buying high-quality domestic goods in the state pharmacies.

36.6 PL goods are manufactured at 85 certified domestic companies located in 21 regions of the Russian Federation. Lack of a long wholesale distribution chain as well as lack of advertising costs allow the goods to be delivered and sold at prices 10—15% lower than the analogues, while maintaining highest quality guaranteed by the certified producers and by the brand 36.6.

Sergey Krivosheev, Chairman of the Board of Directors of JSC “Pharmacy Chain 36.6”:
“Pharmacy Chain 36.6, listed among the backbone enterprises in Russia, is aware of its social responsibility to the population. This is why we took an active part in implementation of the state program aimed at development of the pharmaceutical industry and drafted the federal retail import substitution program, which not only will encourage domestic producers’ development, but also will improve the quality and availability of pharmaceutical care to the population of Russia.”

German Inozemtsev, Commercial Portfolio and Development Director of “Pharmacy Chain 36.6”:
“Pharmacy Chain 36.6 is implementing the national Health project and expanding availability of the high-quality pharmaceutical care for the population of Russia. Such partnership will boost both turnover and incremental profits of the municipal and regional pharmacies. It will strengthen domestic producers and ensure that social strata receive high-quality goods at affordable prices. We estimate that the program’s potential for retail import substitution in municipal and regional pharmacies is worth at least 100 mln. rubles.”

^[1] PL (private label) goods are goods ordered at different manufacturing enterprises and having common package design, coding style, and level of consumer properties. The goods are delivered directly to retail chain or pharmacies. PL goods don’t carry any expenses for media advertising. As of today, 36.6 produces 945 PL items.

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