Government Initiatives will Unlock Enormous Potential Opportunities for the Russian Pharmaceutical Market

10-Dec-2010 - United Kingdom

With total revenues of $15.3 billion in 2009, the Russian pharmaceutical market is one of the largest in the world. The market is anticipated to remain on a path of dynamic growth from 2010 to 2016 mainly due to multiple initiatives of the Russian Government. However, in the short term, the process of implementing legislative changes could slightly restrain the market’s development. New analysis from Frost & Sullivan, Strategic Analysis of Russian Pharmaceutical Market, finds that the market earned revenues of $15.31 billion in 2009 and estimates this to reach $37.15 billion in 2016.

“The Russian state’s policy of improving the demographic situation in the country and providing adequate healthcare services to its population is projected to be one of the main pillars for the expansion of the pharmaceutical market,” notes Frost & Sullivan Research Analyst Dominika Grzywinska. “Multiple initiatives undertaken by the Government, aim at enhancing pharmaceutical provision in Russia. Through amending the law and declaring its support for the domestic industry, the Russian Government appears to be a guarantor of pharmaceutical market growth.”

For example, the 2020 Pharmaceutical Development Programme (Pharma 2020) aims at strengthening domestic manufacturers of pharmaceuticals. It seeks to ensure that by 2020, at least 50 per cent of pharmaceuticals (in value terms) circulated in Russia will be of domestic origin. Introduced in September 2010, Federal Law # 61, ‘About Circulation of Medicines’, simplifies the circulation of drugs and makes authorisation procedures faster and more transparent. Moreover, implementation of pharmaceutical insurance has been planned as a part of the 2020 Healthcare Development Programme.

Uncertainty in the legislative environment, resulting from multiple changes in pharmaceutical law, could potentially restrain growth of the Russian pharmaceutical market during the short term.

“Russian legislation in regards to pharmaceuticals has witnessed numerous changes in recent years with the Government working on multiple legislative transformations, including ZLVLS List, GMP introduction and Pharma 2020, among others,” remarks Grzywinska. “Although new legislation should not necessarily restrain the market development but rather bring clarity and coherence, the expectation process per se is likely to stretch through 2010 and early 2011, temporarily restraining the market’s development.”

Although the Russian Government has announced and explained a number of amendments, many questions remain unanswered. The best strategy in this case is to closely observe the market and follow new declarations and proposed changes.

“The changing legislative environment can bring significant benefits for pharmaceutical manufacturers,” concludes Grzywinska. “For instance, companies which decide to establish production facilities in Russia can count on government support and preferential treatment. Nevertheless, companies need to closely observe the changes to assess their impact on potential growth opportunities.”

https://www.bionity.com/en/news/127143/government-initiatives-will-unlock-enormous-potential-opportunities-for-the-russian-pharmaceutical-market.html