Russia Highlights – August 2014

Russia Highlights – August 2014
The review of the Russian
pharmaceutical market
in H1 2014
In the first half of 2014, total audited Russian pharmaceutical
market reached Rbl. 348 Bln. in trade prices. Market grew by
7% in H1’14 YoY supported by double digit growth rate in
retail and hospital segments (Fig 1). Sales by volume were
flat mainly due to retail sector improvement of previously
observed negative tendency.
Fig 1. Pharma market growth in H1 2014
Meet our team
Svetlana Nikulina
Sales Manager
[email protected]
Natalia Zorina
Service Manager
[email protected]
Maria Denisova
Senior Operations Manager
[email protected]
Stanislav Livanskiy
Market Analysis Manager, Russia & CIS
[email protected]
Anastasia Kruglova
Senior Consultant, Russia & CIS,
[email protected]
Source: IMS Health. TRD prices
IMS Health BC “Dvintsev”, Dvintsev str., 12, bld. 1B , Moscow, Russia 127018
Russia Highlights – August 2014
DLO segment
DLO sales dropped by 7% in H1 of 2014 by value driven by negative dynamic of both sub segments (7
nosology and ONLS). Thus, “7 nosology” part decreased by 3% in the analysed period (H1 2014 vs. H1
2013), while ONLS declined by deeper 11%. DLO size by value accounted for Rbl 54 Bln. in the first 6
months of 2014 including 7 nosology which is 59% of the total sales by value.
Roche, Johnson &Johnson and Teva still hold their leading positions in DLO due to securing top positions
in 7N segment. While top 3 leaders among brands (Mabthera, Velcade, Copaxone Teva) remained the same,
some products improved their position in the ranking significantly. Rebif 44 won back its share in Multiple
sclerosis market and therefore has become the fastest growing product among top 10 brands. Recombinate
by Baxter and Coagil VII by Pharmstandart are also experiencing excellent growth in 7N scheme.
Hospital segment
Market participants expressed concerns about transferring the financial burden on the regional level in the
beginning of 2014. IMS hospital data for the first half of the year didn’t not indicate any negative impact
in the hospital market. Thus, the procurement of medicines in the hospital segment grew by 10% in Rbl
reaching Rbl 58 Bln. in the first half of 2014
Fig 2. Retail market growth in H1 2014
compared to the same period in 2013. But,
it is still unclear how sustainable this growth
rate will be in terms of annual result.
The leading brands are Natrium chloridum,
Kaletra and Clexan, while the top 3
manufacturers are Sanofi, GSK and Roche.
Retail segment
Retail market has returned to the double
digit growth in Q2 being driven by Rx
products. Growth rate has accelerated
from 8% YoY in Q1 to 12% in Q2. Sales
growth YoY is impacted by high base effect
of the 1st quarter of last year amid a flu
epidemic. Totally, retail market increased
by 10% in H1 of 2014 having an up amount
of Rbl 236 Bln. in trade prices. OTC grew by
only 7% YoY in H1’14 while Rx shows +13%
by value.
Data for the first six months of 2014
shows that currency devaluation was not
transformed into inflation on retail market.
Moreover, price increase is at historically
low level (Fig 2).
Top 3 corporations rating in the retail
market stays the same with Sanofi, followed
by Bayer and Servier. The sales volume of
the Top 10 companies exceeded Rbl 83
Bln., accounting for 35% of the total retail
market by value.
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Source: IMS Health.*-data at TRD prices, Drop-out products are excluded due to low figures
IMS Health BC “Dvintsev”, Dvintsev str., 12, bld. 1B , Moscow, Russia 127018
Russia Highlights – August 2014
The leading brands in this segment are Essentiale N, Actovegin and Kagocel. Exoderil and Mexidol show
significant acceleration compared to the previous year.
Russia’s largest pharmacy chains, 1-2Q 2014
The total share of the 10 major pharmacy chains in the Russian pharmacy market in 1-2 Q 2014 increased by 4
pts compared to previous year and concentrate now made up to 18,62%. The retail market itself registered a 7%
growth in the analyzed period.
Overall growth of TOP-10 chains is higher than the market, but its driven by certain chains, some are not performing
well and will most probably go through restructuring or become M&A target, as it was in the previous year.
Observing the situation of increased competition and lack of growth chains are continuing to seek for enlargement
of their business by M&A and making marketing unions. According to the recent news, one of the leading Moscow
chains A5 Group and Pharmaimpex, the strong regional player in Volga and Ural regions, created a marketing
partnership company (COMPAS).The marketing union is aimed at increasing the number of direct contracts
with manufacturers, building a single portfolio of Private Label products and forming a joint marketing policy.
Marketing unions (such as Alphega Apteka, UMG, SoyuzPharma) already become a strong tool for negotiations
with manufacturers. The other way to sustain the business and protect from high competition on retail market for
chains to continue the development of multiformat. To maintain different formats (open format, discounters) will
make adjustments basing on profitability of key retail market players.
Table 1. Market shares of ТОР10 Russia’s pharmacy chains and associations
in retail pharmaceutical market, 1-2Q 2014
Rate
Pharmacy chains
HQ location
Number of
outlets as of
June 1,2014
Pharmacy chains
1
Rigla
Moscow
1074
2
A.V.E. Group (inc.36,6)
Moscow
669
3
А5 Group**
Moscow
1019
4
Doctor Stoletov** (Inc.Ozerki) Moscow
415
5
Implozia* and **
Samara
1060
6
Raduga
S.Petersburg
752
(Inc. Pervaya Pomosch )
7
Pharmaimpex
Izhevsk
510
8
Pharmakor**
S.Petersburg
394
9
ASNA
Moscow
370
10
Pharmland
Ufa
360
Pharmacy associations
1
Alphega Apteka
Moscow
1164
2
SoyuzPharma**
Moscow
3196
3
UMG
Moscow
1394
* Including franchising pharmacies
** Expert estimation
*** Shares of each pharmacy chain before consolidation
MS in retail pharmaceutical
market, %
1-2Q 2014
1-2Q 2013
2,94
2,33
2,18
2,17
2,06
1,73
2,85
1,31/(1,89)***
2,17
0,79***
1,46
0,95/(0,76)***
1,55
1,31
1,30
1,05
1,52
1,26
1,34
0,89
2,02
1,96
1,83
2,01
3,05
2,19
Source: IMS Health — Pharmacy chains rating; based on data from rating participants Market Insights
IMS Health BC “Dvintsev”, Dvintsev str., 12, bld. 1B , Moscow, Russia 127018
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Russia Highlights – August 2014
Cumulative rating of Russian pharmaceutical
distributors, Q1-2 2014
For Q1-2 2014 the cumulative share of the TOP 10 distributors on the direct sales market reached 80%.
Distributor Protek strengthened its leadership position in the first half of 2014 with 14, 70 MS in direct drug
supply, though with loss of market share (-2%).Almost all distributors, national and regional, demonstrated a
decline in direct sales.
Interregional players, that were the main newsmakers with high growth rates, in this year significantly
reduced (Pulse, Farmkomplekt) the rate of growth or even has a negative growth (Oriola).Such visible decline
demonstrated a high demand from the major market players for father logistic optimization, investment
in computerization and improving procedures of interaction with drugstores. It is becoming all the more
evident that industry is in need of quantum leap to maintain its progress. The ways of future development
will be closely tied with the provision of both guaranteed basic services and additional customized services,
which would allow cutting distributors costs and provide additional opportunities to improve business
technologies.
Table 2. ТОР10 distributors by direct DRUG supply share
(including beneficiary drug coverage), Q1-2 2014
Rank
1
2
3
4
5
6
7
8
9
10
* Expert estimation
Distributor
Protek
Katren
ROSTA
SIA International*
Alliance Healthcare
Pulse
Oriola
R-Pharm
Farmkomplekt
BSS
Direct drug supply share, %
Q1-2 2014
Q1-2 2013
14,70
14,99
14,40
15,26
12,44
12,36
8,71
8,78
8,33
8,46
5,74
5,66
5,51
5,76
4,87
5,05
3,64
2,88
2,05
2,42
Source: IMS Health — Distributor’s rating; based on data from rating participants
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IMS Health BC “Dvintsev”, Dvintsev str., 12, bld. 1B , Moscow, Russia 127018
Russia Highlights – August 2014
News from the employees
Anton Kalyapin is appointed to the role of Senior Manager, Offering, Russia & CIS effective July 1st, 2014. Over
the last 1,5 years Anton successfully performed in position of Leading KAM in IMS Russia&CIS .
Galina Osina will replace Anton Kalyapin effective August 20, 2014.
Galina joins IMS Health from ConvaTec where she was working on different sales roles. Galina has over 6
years experience in the Pharmaceutical Industry. She graduated from Fundamental Medicine at Lomonosov
Moscow State University
Upcoming IMS Health events
We cordially invite you to the annual IMS Health Russia and CIS Customer Forum, which will be hosted on
September 25, 2014. Along with an overview of the local market dynamics, our keynote speaker - Sarah
Rickwood, Director, Thought Leaderships – will provide an outlook on the Global pharma and how HQs see
Russia in the game. Another focus will be on technology where Michal Kozlowskiy, Engagement Manager,
Tech&Apps will share insights how applications can help to optimize resources.
IMS Health BC “Dvintsev”, Dvintsev str., 12, bld. 1B , Moscow, Russia 127018
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