Abundant Opportunities within the Russian OTC Market, Invest with
Caution when Making the Switch, Suggests Kline
PARSIPPANY, N.J., Dec. 3, 2012 /PRNewswire/ -- Russia's rapidly growing over-the-counter
market, posting a 12% increase to reach RUB
480 billion (USD 16.4 billion)
at the manufacturers' level in 2011, holds much potential for
pharmaceutical companies. Although a slight decrease in growth was
observed against the previous year, according to new analysis
Emerging Markets Rx-to-OTC Switch: Forecasts and
Opportunities by global consulting and research firm Kline
& Company, the Russian market remains highly robust
compared to the U.S. market's 2.4% growth and comparable with the
neighboring emerging market of China posting 15.0%.
The OTC drug segment in Russia
accounts for a significantly larger share of sales compared to
prescription medications claiming nearly 66% of the total
pharmaceutical market. Similarly, the OTC segment posts a healthy
14.2% growth in 2011, while the prescription market, tempered by a
decrease in state budget allocations, sees growth of a little under
9.0%.
Factors shaping current market dynamics in Russia are manifold, including an increase in
medication costs. Equally of note is consumers' growing purchasing
power. Among the positive factors driving sales growth is the
implementation of new regulations under the Pharma 2020 Strategy, a
Russian pharmaceutical revitalization program. "Specifically, this
is attracting numerous pharmaceutical companies following the
government's initiatives to modernize its national health care
system and educate the public about illnesses and medicines," says
Laura Mahecha, Kline's Healthcare
Practice Industry Manager.
Pharmaceutical innovations in Russia are largely driven by foreign
companies, while local companies tend to focus on the manufacture
of generic alternatives of innovative drugs. Local innovative
brands claim only 20% of the market and one of Pharma 2020
Strategy's goals is to increase the share to 50%. Nevertheless, the
initiative is set to create and encourage opportunities for both
foreign and local pharmaceutical companies.
There are some attractive prospects for Rx-to-OTC switch;
however, the costs of pursuing approval can be daunting. With a
lack of clear procedures for Rx-to-OTC switch set within
Russia, one of the main criteria
for the the Ministry of Health of the Russian Federation (Minzdrav) is
whether the medication has gained OTC status in other countries.
The challenge remains with the pharmaceutical industry to create
new ways of meeting consumer needs, overcoming regulatory hurdles,
and identifying which switch drugs will offer commercial
success.
The Russian OTC market is estimated to increase by an
approximate compound annual growth rate of 11.5% by 2016. Sales
growth forecast for 2013 and beyond will come through price
increases for products not included in the Vital and Essential
Drugs List (EDL) and expansion of the Additional Medicines
Supply (DLO) program which provides pensioners and low‐income
families with free medicine.
The vast and growing Russian market offers much promise, but
requires cautious assessment. For more information on key issues
and implications regarding Rx-to-OTC switches and more in both
Russia and China, inquire about Kline's Emerging
Markets Rx-to-OTC Switch: Forecasts and Opportunities. A
web-based, interactive forecasting model which predicts switch
probability and sales forecasts is also available to subscribers of
this report.
About Kline
Kline is a worldwide consulting and research firm dedicated to
providing the kind of insight and knowledge that helps companies
find a clear path to success. The firm has served the management
consulting and market research needs of organizations in the
chemicals, materials, energy, life sciences, and consumer products
industries for over 50 years. For more information, visit
www.KlineGroup.com.
For more information, contact:
Selma Smailagic
Marketing Executive
+420-222-33-00-20
Selma.Smailagic@klinegroup.com
SOURCE Kline