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20DEVELOPMENT OF THE PHARMACEUTICAL INDUSTRY IN THE RUSSIAN FEDERATION
Zoshchouk J.
Master of Business Administration CEO ALCOPACK Republic of Belarus
ABSTRACT
The article deals with trends in the development of the pharmaceutical market of the Russian Federation. The analysis of the development of the Russian pharmaceutical market has been carried out, which showed that it is characterized by high dynamics of development. The export-import structure of the Russian pharmaceutical market was considered. Its analysis showed that the share of imports significantly exceeds exports ofmedicines. The main importer of pharmaceuticals on the territory of the Russian Federation is the European Union countries. The main export destination forpharmaceuticals manufactured in Russia is the post-Soviet countries. Due to the predominance of imported drugs in the market of the Russian Federation import substitution strategies need to be introduced and implemented substitution strategies.
Keywords: pharmaceutical market, development, structure, export, import, drugs.
Introduction
The functioning of the pharmaceutical industry is characterized by high dynamics of development. It creates conditions for a constant search for ways to improve industry competitiveness. This is especially important for countries with a low level of pharmaceutical industry development and high import dependence. The pharmaceutical industry, which includes the development, production and marketing of drugs, is actively expanding and developing in Russia. In this regard, issues related to its development on the territory of the Russian Federation are of great interest.
Analysis of Results and Discussion
The pharmaceutical market is one of the fastest growing and developing markets inthe global economy. In 2018, the volume of the pharmaceutical market in Russia amounted to 1,682 billion rubles. This is 2.6% higher than in 2017. Figures for the first half of 2019 showed an increase of 0.6% compared to the same period in 2018. Despite the optimistic figures, there is also cause for concern. Although profits are growing year-on-year, the dynamics of its growth in monetary terms have fallen by about 1%. This is due to the decline in purchasing power of the population and the resulting decrease in consumptionof medicines [6].
In 2018, the Russian Federation's pharmaceutical market was the 16th largest in theworld in terms of size in dollar terms, while in 2017 - 12th place after the USA, China, Japan, Germany, France, Brazil, Italy, UK, Spain, Canada and India [3].
The Russian Federation ranks fifth in the world in terms of sales of OTC drugs. Its share amounted to about 3.8% or $4.8 billion. The current crisis situation in the Russian economy had a negative impact on the dynamics of the OTC segment of the domestic pharmaceutical market. Consumers switched to cheaper drugs and refused to buy the so-called life-style drugs. Nevertheless, according to expert forecasts, the average annual growth rate of the OTC market is expected to reach 7% by 2020. It should also be notedthat Russians have increased their consumption of Russian drugs [4].
According to estimates of world experts, by 2021 the world pharmaceutical marketwill grow by 26.3% in U.S. dollars, by 2022 - by 35.5%. Experts forecast a
31.4% growth in sales of the Russian pharmaceutical market in the coming years. The Russian Federationis not in the top ten by market volume, but according to the forecast, sales in the country willincrease one and a half times over five years [4].
The Russian Federation has the highest share of consumption of reproduced drugs, namely generics, among developed countries. If compared to the countries of the European Union, it is 2.5 times higher and amounted to 64% [5]. In European countries the share ofconsumption of generics was on average 26% [5]. If we compare the cost of original drugswith the cost of generics, it can be concluded that in the Russian Federation it is 4.3 timeshigher than the cost of generic drugs. In the European Union, the difference in cost betweenthese groups of drugs is a quarter lower than in the Russian Federation. Here generic drugs are 3.2 times cheaper compared to the original drugs. This indicates that in the Russian Federation the price difference between the drugs is significantly higher [5].
If we consider the ratio of export and import of drugs in the Russian Federation, theshare of imports significantly exceeds the export of drugs. Thus, according to the data for 2018,import of drugs was 13 times higher than their export. In spite of that, in the given period oftime in value terms export of drugs increased by almost 9 %. As for imports, there was adecrease in imports in value terms by 2% [3].
The main export destination for pharmaceuticals produced in Russia is the post- Soviet countries. Their share in the total structure of Russian drug exports was about 70%.The largest share was accounted for by the EAEU countries, namely 34%. Other post- Soviet countries accounted for 33% of exports [3].
The main importer of pharmaceuticals to the territory of the Russian Federation arethe countries of the European Union. Their share in the total import structure was 73%. The main importers among the countries of the European Union are such countries as Germany, France and Italy. Their shares were 21%, 8% and 6% respectively [3].
Import of pharmaceutical substances is an important attribute of pharmaceutical market development in the Russian Federation.
The main importer of drug substances remains China, whose share is almost 60%.This country has a wide range of substances offered. Their number is more than 120 items.In addition, Chinese substances have a significant advantage in terms of price. If we compare the price of substances offered by European countries, the Chinese ones are 53 times lower.
However, in recent years, there has been a downward trend in the share of drug substance purchases made in China. This trend is associated with the development of import substitution programs, through the implementation of which the volume of production and sales of their own substances is increasing [2]. In addition to China, European countries such as Belgium, Germany, Slovenia and France are also actively importing drug substances into the Russian market.
Having considered the export-import structure of drugs and their substances, we can conclude that in the Russian Federation there is an import dependence of this segment.Undoubtedly, the current structure of foreign trade in drugs and pharmaceutical substances, indicating import dependence of the Russian Federation [1].
Another area of pharmaceutical industry development is the market for veterinary drugs. The Russian market for veterinary drugs is still highly dependent on imports. So far, Russian manufacturers are unable to fully meet the market's needs for high-quality drugs and vaccines, but they are definitely striving to do so and are making progress. The Russian market for veterinary drugs is growing rapidly. In the current period, it is an areaof focus for many people - pets are part of the family, healthy animals in agriculture are important for healthy food production. The level of industry development is still low compared to Europe and the USA, where animal health needs and opportunities can be described as equal.
The development of the market for veterinary drugs is the basis for ensuring biological safety and one of the indicators of the state of the livestock industry in the countries of the Eurasian Economic Union. Representatives of these countries are interested in increasing the share of veterinary drugs produced in the states of the Eurasian Economic Union, increasing their competitiveness both in the domestic and foreign markets, and veterinary officials are interested in acquiring effective drugs that allow themto increase the volume of agricultural products.
Conclusion
In conclusion, despite the fact that the activity of Russian drug manufacturers is gradually increasing, the pharmaceutical industry of the Russian Federation is "catching up" in relation to the global industry and has a number of problems, which include: inability to meet the needs of the Russian pharmaceutical market for drugs in the main pharmacotherapeutic groups; high dependence of domestic producers on imported substances; presence of a large number of obsolete and low-margin drugs in the portfolio of domestic manufacturers; lack of investment in scientific research programmes and little development of new innovative medicines; the depreciation of production resources and difficulties for domestic producers to switch to GMP standards.
References
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