Current issue #8, 2017

14.03.2017

Pharma community speculates about recent resignations of GPP top managers

Good Pharmacy Partners (GPP), the largest marketing partnership of independent pharmacies and pharmacy chains founded by 36.6 Group, lost two of their top managers over the last month, i.e. President Konstantin Tiunov and COO Garik Tadevosyan. Such massive executive resignations set pharma market players thinking about upcoming structural changes including breakup. The Pharmacy Chain 36.6 management notes that the resignations of the top managers are not due to any conflicts within the company and are solely associated with their desire to develop further in other companies.

[PharmVestnik # 08, 14/03/2017, p. 1, cont’d p. 4]

Antitrust reprisals

FAS makes pharma manufacturers cut prices

The Federal Antimonopoly Service (FAS) has succeeded in decreasing prices for more than 100 drugs – for the first time in Russia’s newest history, according to FAS head Igor Artemiev. The official explained that his method was very simple: if manufacturers do not cut prices, “we oust them from the market altogether”. A few days later PharmVestnik came to know that in fact there were more than 200 drugs with their prices cut. Experts think that it is good but that consumers will see the result only provided that drug prices are decreased on a mass scale.

[PharmVestnik # 08, 14/03/2017, p. 2]

Some experts speak about complete termination of cell technology law

On March 7th, the President of Russia signed a Federal law on introducing state fees for biomedical cell product (BMCP) registration. Three MoH-drafted documents on BMCP are currently undergoing public debate. One determines the ways to suspend the use of products if they are human life and health threatening; the other approves the Drug Master File amendment statement form; still other regulates that the BMCP quality assessment shall be conducted at its place of manufacture using the manufacturer’s equipment. Besides samples and materials, the manufacturer must provide the equipment as well as consumables and reagents required to operate such equipment. However, some experts think that this legislative process will kill the cell technology industry.

[PharmVestnik # 08, 14/03/2017, p. 5]

MoH started procuring drugs for Seven Diseases program at cut prices

At the end of February 2017, the Russian Ministry of Health (MoH) invited the first drug supply biddings for the Seven (High-Cost) Diseases program. In late 2016, the Russian Federal Antimonopoly Service (FAS) found that part of the medicinal products procured for this program were overpriced if compared with some other countries. PharmVestnik compared the purchase prices of the drugs that attracted FAS’ attention in 2016 and 2017. It turned out that the government saved approx. 40% of the funds allocated for drug procurement.

[PharmVestnik # 08, 14/03/2017, p. 6]

Orphan money

Regional rare disease treatment budget gap was 6 bn RUB as of 2016

In the end of February, several events were held dedicated to the International Rare Disease Day. On the eve of this day, the President of Russia ordered, before March 31st, to consider the issue of covering with drugs and medical devices of children with chronic diseases in need for a continuous drug or substitution treatment, irrespective of their disability status. Experts believe that this order will help improve the drug coverage situation even in the beneficiary regions. Whether the funds will be sufficient to cover rare disease adults is still a big question.

[PharmVestnik # 08, 14/03/2017, p. 10]

Chinese API manufacturers losing competitive advantages

A chemical and pharmaceutical manufacture upgrade process in China is currently at its active stage. Due to this process, manufacturers are facing API exporting problems. Russian customers have come across such situations more than once. However, they do not have any significant short-term effect on the Russian pharma market. In the longer term, the world API market is set to change. Russian companies may participate in such changes as well.

[PharmVestnik # 08, 14/03/2017, p. 11]

Immature regulations torpedo API market development

Grigory LEVITSKY, Chairman of the Board of Marbiopharm OJSC (Biotec Group), has first-hand knowledge about API manufacturing as he used to work at an API facility. Presently, the API segment in Russia basically reemerges. Mr. Levitsky speaks about the market situation on the whole, what hinders the market development, and what novelties leave him asking questions.

[PharmVestnik # 08, 14/03/2017, p. 12]

Drug distributors and manufacturers come to stay in government procurement sector

The Forbes Kings of Government Purchasing Ranking for the first time included pharma market players, four companies at once. PharmVestnik found out that there were many more large players in the government procurement sector, and their earnings seemed impressive even for oil and gas market players.

[PharmVestnik # 08, 14/03/2017, p. 13]

Report on pharmaceutical advertising in specialized medical and pharmaceutical media, Q1-316

Against the background of decreased marketing budgets, the specialized printed media pharmaceutical advertising market demonstrates sustainable growth. Based on the data of Contenta Medical IndexTM research “Monitoring of drug advertising and content analysis of scientific articles in printed medical and pharmaceutical journals” conducted by Ipsos Healthcare, as of quarters 1-3 2016, the pharmaceutical advertising market posted a 21% growth year-on-year in value terms and amounted to 1,124 m RUB, the number of advertising blocks being basically unchanged (+2% y-on-y).

[PharmVestnik # 08, 14/03/2017, pp. 14-15]

Rating of Russian pharmaceutical chains, 2016

Apart from the already habitual consolidation trends that continued in Q416, the pharmaceutical retail sector has become a witness and partially a participant of numerous processes associated with the evolution of the interest to the pharma market demonstrated by nonspecialized retailers. This interest demonstrated for the first time several years ago in the form of heated debates on the necessity to authorize drug sales beyond pharmacies has undergone a profound transformation to date. Presently, there are examples of a deeper partnership between FMCG and pharmaceutical retailers and even attempts to play independently on the pharma market.

[PharmVestnik # 08, 14/03/2017, pp. 18-21]

Report on immunomodulator / antiviral drug sales in out-of-pocket sector, 2016

As of 2016, the out-of-pocket market of ARVI prevention and treatment drugs with an immunomodulating and/or antiviral action amounted to 31.82 bn RUB in value terms and 98.61 packages in real terms, with a 21% and 12% growth year-on-year, respectively.

[PharmVestnik # 08, 14/03/2017, pp. 22-23]

Patient lists as a route cause

The rare disease patient care system in Russia develops too slowly

In some Russian regions, the drug coverage of orphan disease patients takes up to 70% of the entire drug coverage budgets. But, notwithstanding this fact, according to the EAEU Institute monitoring, 90% of the patients cannot receive the drugs required in full. These figures were voiced during the public debates at the Public Chamber of the Russian Federation on February 28th, on the Rare Disease Day.

[PharmVestnik # 08, 14/03/2017, p. 27]

Homeopathic remedy sales regulation

It was more than once mentioned during the recent homeopathic remedy debates that these remedies are registered in the same way as other pharmaceuticals. This is not exactly the case. In the process of registration of a product having therapeutic (or diagnostic, preventive, modulating) properties, it is referred either to pharmaceuticals or to medical devices. Such product cannot be either a nutraceutical product (including a dietary supplement), or cosmetic, or anything else. This approach is used in the EU, USA, Russia, and EAEU.

[PharmVestnik # 08, 14/03/2017, p. 28]

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