This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 8/14/2019

Overview

The Russian pharmaceutical market has tremendous promise and warrants consideration by U.S. exporters.  In 2018, per capita spending on medicines was $140 per person, placing Russia 17th out of 32 central and eastern European (CEE) economies.  $20.1 billion of pharmaceuticals were sold in Russia in 2018, equal to 1.2 % of GDP and 22.1% of the nation’s health spending.
The Russian pharmaceutical market can be divided into prescription drugs and over the counter (OTC) medicines. Prescription drug sales have traditionally dominated the market, and this trend continued in 2018: prescription medications represented 62.3% of sales. Of this amount, sales of generics constituted 67.6% of Russian prescription sales in 2018. Pharmaceutical sales (presciption and OTC combined) grew 25% in dollar terms from 2016-2017, and forecasts projected 9% growth for 2018.

 

2016

2017

2018

2019 estimated

Pharmaceutical Sales,

16,415

20,095

20,095

21,033

Prescription drugs sales

9,839

12,285

12,524

13,309

OTC drugs sales

6,575

7,811

7,571

7,724

Generic drugs sales

6,529

8,239

8,466

9,096

Exchange rates

67.00

58.5

60.4

 

Units: $ millions
Source: Fitch Solutions (formerly known as Business Monitor International)
For many years, the Russian government accounted for approximately half of health care expenditures.  However, industry anticipates a significant shift towards private healthcare spending.

The Russian healthcare system is funded by the federal government, social spending, and the Federal Mandatory Insurance Fund (FOMS). The FOMS’s budget consists of two revenue streams: companies paying for their employees and the federal government paying for the umemployed. The FOMS operated at a deficit in both in 2017 ($516 million) and 2018 ($1.25 billion), but experts project a 2019 surplus ($801 million) due to the scheduled increase in the payroll deduction for FOMS from 5.1% to 5.9%.
Drug manufacturers prefer not to work with retail pharmacy chains or pharmacies directly, relying instead on distributors to promote their products to retail outlets. Distributors operate vast networks of contacts and work to direct retail distribution channels.  Protek, Katren, Pulse, Pharmkomplekt, R-Pharm, Grand Capital, BCC, Profit-Med and CIA International are some of the major distributors in the Russian market. The number of pharmacy chains is growing and currently exceeds 50,000.  Major sales are coming from the following chains:  Asna, Rigla, Erkapharm, Apteka 36.6.

U.S. pharmaceutical exporters face a complex regulatory landscape in Russia.  Russia’s new Good Manufacturing Practices regime can lead to delays in foreign pharmaceutical products’ receiving market access, and there is relatively weak protection of intellectual property rights for patented drugs.  IPR issues include erosions in regulatory data protection and patent rights, and the risk of compulsory licensing.

Leading Sub-Sectors

Cardiovascular diseases, cancer and HIV are the most prevalent diseases in Russia and are driving demand for associated pharmaceutical products.  High rates of smoking and alcohol consumption also contribute significantly to illnesses. Per a 2015 WHO report, 39.1% of the Russian population smokes compared to a rate of 22.7% globally and 27.3% in Europe.  In addition, per capita alcohol consumption of 15.1 liters of pure alcohol per year between 2008 and 2010 far exceeded the global average of 6.04 liters.

Opportunities

Demographic factors will continue to drive pharmaceutical market growth as the population ages.  However, the Russian government’s desire to curb imports may constrain opportunities for U.S. exporters.

The Russian government is focused on creating its own pharmaceutical industry as outlined in its “Pharma 2020 Strategy,” which aims to reduce the reliance of the Russian economy on imported pharmaceuticals.  In July 2016, Prime Minister Medvedev said that he expected domestic production to increase from 28.5% to 75% of all medicine sold in Russia by 2020.  Despite the challenges that U.S. companies face as the result of this strategy, profitable opportunities persist, including licensing agreements/technology transfers by U.S. manufacturers of pharmaceutical products, as well as U.S. manufacturers supplying pharmaceutical production and packaging equipment. The Ministry of Industry and Trade is developing the “Pharma 2030 Strategy,” which will be a continuation of the existing “Pharma 2020 Strategy.” In the short-to medium-term, the market for generic drugs will continue its growth due to incentives from the Russian government, as well as population’s preference for cheaper drugs.

Trade Events

Pharmtech & Ingredients, International Exhibition of equipment, raw materials and ingredients for pharmaceutical production
November 19-22, 2019
Moscow

Zdravookhraneniye, International Exhibition for Health Care, Medical Engineering and Pharmaceuticals
December 2-6, 2019
Moscow

Web Resources

Ministry of Health Care
DSM Group - Russian pharmaceutical marketing agency
Association of International Pharmaceutical Manufacturers (AIPM)
Association of Pharmaceutical Companies «Innovative Pharma» (InPharma)
Remedium
Pharmaceutical Herald
Vademecum
Fitch Solutions (former Business Monitor International)
U.S. Commercial Service Contact
Yuliya Vinogradova, Commercial Specialist
Tel: +7 (495) 728-5405

Customs, Regulations & Standards

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.