Russian Pharmaceutical Market Trends in 2020
Deloitte CIS Research Center
We are pleased to present our overview of the trends that shaped the Russian pharmaceutical market in 2019 and the first nine months of 2020.
In 2019, the Russian pharmaceutical market increased its growth in ruble terms for the first time in years. This was driven by higher prices for medicines, demand shifting towards more expensive medicines and an increase in the share of the public segment (in ruble terms), which has a higher weighted average cost per package than the commercial segment. However, overall consumption of medicines fell after five years of sustained growth. The ongoing pandemic — the main story of 2020 — amplified trends that had already started emerging in 2019, such as higher prices for medicines and lower sales in unit terms.
One outcome of the COVID-19 pandemic in Russia was a heightened government focus on regulating the prices of medicines and medical devices. In 2020, legislators amended Federal Laws No. 61-FZ of 12 April 2010 “On the Circulation of Medicines” and No. 323-FZ of 21 November 2011 “On the Basic Principles of Healthcare in the Russian Federation”. These laws now permit the state to cap price rises for medicines that are not on the Vital and Essential Drug List (VED) and medical devices needed in the event of an emergency and/or the imminent spread of a disease that poses a threat to public health, or if the retail prices for these products rise sharply (by 30+ percent).
The pharmaceutical market took a major leap forward in terms of digitalization in 2020 with the launch of online sales of medicines, burgeoning interaction with healthcare professionals through webinars and email newsletters, a surge in online advertising, the maturing of native advertising, and the move to work-from-home arrangements. These trends, fueled by the pandemic, took off in 2020 but are also likely to stay with us over the long-term, serving as the foundation for the pharmaceutical market going forward.