One’s own medicine. The share of domestic manufacturers is increasing in the pharmaceutical market

26 Mar, 2019 10:44

The share of domestic pharmaceutical companies in the Russian market reached 30 percent, as  the study of the investment company Novus Capital shows. The total volume of the pharmaceutical market reached 930 billion rubles in 2018.

"Since 2014, the share of Russian companies increased from 24 to 30 percent, and if we talk about the generic segment of the market, the share increased from 29.4 to 41.4 percent. These are serious figures that indicate that import substitution and localization in the pharmaceutical industry work out. New pharmaceutical productions are founded in Russia, companies are expanding their product portfolio, foreign investors are interested in consolidating their positions in the Russian Federation, "Alekander Lobakov, managing partner of Novus Capital, commented on the results of the research.

Companies from Europe, the USA, Asia and Israel also work at the Russian pharmaceutical market. Germany became the leader among foreign countries in 2018. German companies sold 13 percent of the total volume of pharmaceutical goods in the Russian Federation. The companies from the United States rank second with 12 percent of the market. This is followed by French and English drug manufacturers (6% each). A more modest share in the Russian pharmaceutical market take India, the Netherlands, Italy and some other countries.

The volume of pharma products imports in 2018 amounted to 650 billion rubles. Original products prevailed in its structure. Medications for the digestive tract and metabolism (17.3%), anticancer drugs and immunomodulators (12.3%) are among them.

The volume of imports of pharma products in 2018 amounted to 650 billion rubles

According to Alexander Lobakov, the share of domestic pharmaceutical companies in the Russian market will continue to grow due to their greater mobility in registration of new products, active participation in expanding the product portfolio through M & A deals (mergers and acquisitions) and the growing cash flow from the overall consolidation of the business. According to Alexey Serebryanny, Deputy Chairman of the Healthcare Committee of the Moscow Department of OPORA Russia, it is necessary to stimulate the development of pharma products by Russian pharmaceutical companies: “This is the basis of future success. Since this is a very long and capital-intensive process, financial incentives are needed. As long as our domestic production is limited, it is necessary to continue to localize the production of imported pharmaceuticals. "

The pharmacy segment is also actively consolidated both through the growth of leaders and through M & A deals. Pharmaceutical organizations in the last 2-3 years have significantly consolidated their bargaining position and in some cases are able to dictate the terms of trade to manufacturers. One of the few ways for manufacturers to remedy the situation is to grow the business through expanding the product portfolio by registering or purchasing new products in M ​​& A deals.