ukrainian pharmaceutical market
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Ukraine:in prospect September 2010
Definitions
ATC EphMRA classification for pharmaceuticals (ATCs are the intellectual property of EphMRA(European Pharmaceutical Market Research Association), and are used to assess products’ dynamics against similar products) and own SMD classification worked out for non-pharmaceuticals
Big Pharma the top twenty pharmaceutical companies and their two trade groups, Pharmaceutical Research and Manufacturers of America (PhRMA) and Biotechnology Industry Organization
CIS Commonwealth of Independent States. A regional organization, whose participating countries are former Soviet Republics, formed during the breakup of the Soviet Union. CIS countries: Republic of Belarus, the Russian Federation, Ukraine, Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Tajikistan, and Uzbekistan
Consumption final purchase of goods and services by individuals/consumers
Generic company company that produces and/or sells generics
Generic drug a medicine containing the same active ingredient in dosage form, safety, strength, route of administration, quality, performance characteristics and intended use as a particular originator drug and is not (or no longer) patent-protected
GMP Good Manufacturing Practice, a part of a quality system covering the manufacture and testing of active pharmaceutical ingredients, diagnostics, foods, pharmaceutical products, and medical devices
Originator company a corporation which holds the patent for the active ingredient of the product
Original drug a novel drug that was under patent protection when launched onto the market for the first time
Public Price Level price which is used to sell the product from the pharmacy (POS) to the final consumer. Pharmacy (POS) sales-out price level (Consumer Prices)
Trade Price Level (PPP)
price which is used to sell the product from a distributor/wholesaler to a pharmacy (pharmacy purchase price)
A. CIS Region B. Ukraine Pharma Market C. Forecasts
A. CIS Region
CIS Region Abstract
In Brief
The CIS is comparable to a very loose association of states and in no way comparable to a federation, confederation or supra-national organization such as the old European Community It is more comparable to the Commonwealth of Nations. Although the CIS has few supranational powers, it is more than a purely symbolic organization, possessing coordinating powers in the realm of trade, finance, lawmaking, and security
Russian Federation
Belarus
Ukraine
Armenia Azerbaijan
Kazakhstan Kyrgyzstan
Moldova
Turkmenistan Tajikistan
Uzbekistan
Georgia
The International Monetary Fund (IMF) has raised forecasts for economic growth in CIS countries in 2010 up to 4,3 percent
"World Economic Outlook"
• Total GDP is ~ $1.6 trillion (est. 2009) • GDP Growth Rate = 4.3% (IMF Forecast) • Population is ~276 mln people (est. July 2009)
Source: Eurostat, IMF, CIS Statistic Committee, SMD
Although the original drugs market in CIS will develop at a slower rate than that of generic drugs between 2010 and 2011, the growth rate of original medicines for the whole region will be positive. It has, for the time being, been compromised by the cost-containment policies of the CIS countries, which have been stepped up during the global financial crisis.
CIS Pharmaceutical Market Executive Summary
The global financial crisis left its footprint on the CIS Pharma market however the impact is dependant on the level of each country's health system development. In CIS countries where there is no reimbursement system there were remarkable changes in consumer behavior. In particular, increased price sensitivity with a switch to cheaper medicines and generic products although not significantly.
A number of consolidation processes recently took place in the generic arena, which were of great importance for the CIS region. For example, Israel’s Teva gained a strong presence in the region through the acquisition of Barr in July 2008, which included one of the largest local generic drug producers - the Croatian company Pliva.
The pharmaceutical market in CIS region is dominated by generic drugs. Market structure and key players are different from those in western markets.
Rx vs. OTC ratio is almost 50/50. OTC segment traditionally is more developed than in western markets
Indian pharma companies have increased their momentum in these markets through a spate of mergers and acquisitions, new tie-ups, setting up of joint ventures and subsidiaries. Some of these companies are making investments in terms of JVs and manufacturing facilities in Russia, Ukraine and Uzbekistan, for instance. Some individual companies are also looking at collaboration with local institutions or companies in R&D.
Source: SMD, Sept 2010, EB
CIS Pharma Market Features
• Mainly the biggest countries, except Russia (DLO/7) is out of pocket markets. Where more than 80% is covered privately by patients.
• Almost absence of reimbursement / obligatory medical insurance (except Moldova and of rudimentary level in Kazakhstan and Georgia) – possible introduction in two / three years. (Russia and Ukraine are discussing the introduction of a system of public health insurance, which has been under discussion in Ukraine since at least 1996)
• Still according to Constitutions medical help used to be free of charge to the population. In practice a considerable amount of hospital treatments are compensated by governments.
• These markets are largely generic markets – approximately 85% is covered by brand generic products.
• However originator companies (patented Rx) are drivers of the market.
• Price difference between original (patented) and generic products is much lower than in mature markets
• Strong local production, mainly historically concentrated in Ukraine (makes 65% of consumption in units and 30% in values in 2009)
• Big Pharma have not included these markets in their patent exclusivity list – the consequence is that there are a lot of generics available for products currently covered by patent (e.g. Viagra, Liprimar) in Western countries
Source: SMD, Sept 2010, EB
CIS Pharma Market Dynamics
Population, mln people CIS
Pharma Market Values (USD),
mln Y2009
145,5 Russia* (incl. DLO, hospital)
17 500
46,7 Ukraine 2 674 16,9 Kazakhstan 975 10,4 Belarus 653 22,1 Uzbekistan* 520 7,4 Azerbaijan 240 5,4 Georgia 235 4,4 Moldova 179 3,7 Armenia* 112 4,5 Kyrgyzstan** 110
4,4 Turkmenistan** 100 5,7 Tajikistan** 100
277,1 Total 23 018 Source: SMD, *Pharmexpert, **SMD estimation
Russia* (incl. DLO, hospital) ;
74.81%
Ukraine; 11.41%
Kazakhstan ; 4.17%
Belarus ; 2,79%
Uzbekistan*; 2.22%
Azerbaijan ; 1,03%
Georgia; 1.00%
Moldova; 0.77%
Armenia*; 0.48% Kyrgyzstan**; 0.47%
Turkmenistan**; 0.43%
Tajikistan**; 0.43%
The pharmaceutical market is driven by factors such as ageing population, increasing demand for imported and expensive medicines, and increasing disposable incomes
CIS emerging Pharma Market (only medicines) made $23 bln in 2009 at TRADE price level, which is equal to $28 bln in PUBLIC price level
Growth Rate approx. [-5%] in USD in 2009 (TRADE price level), compare to growth in 2008 of +20% in USD as an impact of the crisis
Source: SMD, Sept 2010, EB
B. Ukraine Pharma Market
Ukraine Country Profile
Ukraine
Russia
Ukraine is the largest country in Europe in terms of territory. It covers a territory of 603,7 thousand square kilometers. (France is the second largest country on the continent with a territory of 544 thousand square kilometers).
In terms of population Ukraine is one of the largest in Europe. Ukraine has a population of ≈46 million people. It is one of the biggest consumer markets in Europe. Population density is about 77 people per sq. kilometer. Approximately 77.8% of the population are ethnic Ukrainians and 17.3% ethnic Russians. The remaining 4.9% of the population includes ethnic Poles, Jews, Bulgarians, Tatars, Hungarians, Romanians, Greeks, and other nationalities Ukraine surrounded in the east by the
Russian Federation, in the north by Belarus, in the west by Poland, Slovakia and Hungary, in the south west by Moldova and Romania, and in the south Ukraine by the Black Sea. Location
Population
Territory
Whilst Ukraine was hit hard by the economic crisis, the economy is expected to recover in 2010. The market is driven by strong import growth; imports rose by a CAGR of 34.0% over 2004-2008. Import growth is expected to remain strong due to a lack of locally manufactured innovative products. The pharmaceutical market will grow more rapidly if the government will manage to implement an effective health insurance system, which has been under discussion for several years
Trends
Ukraine has bilateral relationships with many countries all over the world. Despite getting its independence only less than 20 years ago (August 24, 1991), it is emerging as a major player in trade and industry in Eastern Europe. Its pharmaceutical industry is in need of help at the moment and this makes it a good time for foreign pharmaceutical companies to step in.
Trends
The pharmaceutical industry is a fast growing sector of the national economy. As one of the largest markets in Europe there exist greater tendencies for large financial turnovers. Today Ukraine is one of the biggest consumer markets in Europe. There are national pharmaceutical factories that produce medicines for local consumption. However, the production doesn’t match market requirements.
Such products must be imported from foreign manufacturers to supplement the local market needs. However, before importation, foreign medical products must be registered with the State Health Ministry. The latest statistics confirmed that the actual annual supply of essential imported medical products is far less than the demand.
Pharma
Source: SMD, Sept 2010, EB
Ukraine Economic Outlook
Ukraine
Ukraine benefits from a consumer market of approximately 46.01 million people, and enjoys an opportune geographical location, a mild climate, a rich natural resource base, a highly educated labor force, a well-developed transport infrastructure, and a well-developed tradition of scientific research and development. Despite the fact that Ukraine has experienced steady economic growth over the past five years, the country faced serious challenges in sustaining the negative consequences of the world economic crisis and remains in need of investment in all sectors of industry, with many industrial plants unable to meet current consumer demand.
The core export categories including ferrous and non-ferrous metals and metal products; chemical products; fertilizers; plastics and rubber; agricultural products and foodstuffs; engineering goods; various types of machinery and equipment (including various types of transport vehicles); textiles; and a wide variety of raw materials.
Foreign Trade
The Ukrainian financial sector has undergone substantial changes and improvements in the past several years with an effective regulatory framework being progressively created and a modern financial system, based on market principles, steadily emerging. However, like in other economies, Ukrainian financial sector is experiencing the negative effects of the world financial crisis.
The National Bank of Ukraine and the government are implementing a number of measures in order to fight the negative consequences of the world financial crisis. Such measures, inter alia, include recapitalization of Ukrainian banks, limitation of the outflow of capital from Ukraine and facilitation of the performance of debt obligations by Ukrainian borrowers.
Financial Sector
Ukraine Pharma Market Features. Retail + Hospital
Financial crisis also resulted in significant decrease in capital expenditures, making greenfield development a viable alternative
Domestic producers
traditionally focus on
cheap mass products
The lowest per capita medicine consumption among CEE countries, development of medical insurance and possible introduction of reimbursement system evidence high growth potential of the market after economy recovers
Drugs price structure shifts
to higher segments
Benefits of pioneering the
market remain as no global or
regional player has invested yet
Market is dominated by foreign companies in value (USD) (75.3%
in 2009)
The market is
free of VAT
Total Market CAGR is more
than 16%
Healthcare Expenditures
CAGR is ~18.5%
The Ukrainian retail pharmaceutical market is one of the fastest growing markets in Europe, growth fueled
by the increase in average price per pack
Increasing of Healthcare expenditures to 4.2% of GDP in 2010
Source: SMD [Sept 2010, EB], Roland Berger
Ukraine Pharma Market Features. Retail + Hospital (cont)
Major pressures for Ukrainian producers
• Fragmented nature of the Ukrainian pharmaceutical market allows an unimpeded entry
• Although Ukraine represents a potentially major and lucrative pharmaceutical market, most domestic manufacturers are very small and focus on the production of older drugs.
1. Financial
• No access to cheap funds for operations and growth;
• Liquidity problems trigger sales of assets
2. R&D
• In view of Ukraine’s accession to WTO, some manufacturers will need to seriously redesign their portfolio as cheap copying of patented drugs becomes impossible in Ukraine
3. Technological
• Introduction of GMP requirements (now postponed till 2011) will require an investment of 1 to 18 million USD per production line
51%
59%
53%
World USA UK
20%
33%
TOP-5 TOP-10
MARKET SHARE OF TOP-10 COMPANIES IN UKRAINE [USD, 2009]
MARKET SHARE OF TOP-10 COMPANIES IN OTHER COUNTRIES
More than 800 companies operate in Ukraine ø ~54%
Source: Datamonitor, IMS, Nomura, Roland Berger, SMD [Sept 2010, EB]
Pharmaceutical manufacturing remains vulnerable to counterfeiting and low quality generic production. But this reluctance to enforce standards is counter-productive - the net result is that consumers often turn to branded generics made by foreign manufacturers with a reputation for quality and reliability
Ukraine
Source: SMD, Sept 2010, EB
Ukraine Pharma Market Key Data. Retail + Hospital
1.3 1.3
0.8 1.1 1.5
1.9 2.3
2.9 2.7
2003 2004 2005 2006 2007 2008 2009 1 HY 2009 1 HY 2010
• Market value - $2.7 bln (public price level)
1.9 2.2 0.8 0.9
1.2 1.4 1.7 2.1 2.0
2003 2004 2005 2006 2007 2008 2009 1 HY 2009 1 HY 2010
• Average cost of a pack: $2.24 (public price level)
• Annual consumption per capita (USD, public price level) 27.6 28.9
16.8 22.3 32.4
40.1 49.4
62.0 58.5
2003 2004 2005 2006 2007 2008 2009 1 HY 2009 1 HY 2010
Source: SMD, Sept 2010, EB
75.7% 74.1%
66.2% 68.5%
71.1% 73.8% 74.7% 76.0% 75.3%
2003 2004 2005 2006 2007 2008 2009 1 HY 2009 1 HY 2010
• Foreign manufacturers’ market share (value: [USD], public price level)
Source: SMD, Sept 2010, EB
Source: SMD, Sept 2010, EB
Source: SMD, Sept 2010, EB
Source: SMD, Sept 2010, EB
Total Pharma Market Dynamics & Structure Values: [USD]
Values, mln USD 2007 2008 2009 CAGR in 2004-2009, USD [%]
Drugs, Retail 1 762 2 199 2 055 16.7 Drugs, Hospital 239 324 245 9.1
Cosmetics & Personal Care Products 91 131 129 37.9
Biologically Active Nutrition & Self Medication 71 111 102 30.7
Patient Care Products 120 154 150 16 Total in Pharmacy Purchase Price 2 283 2 919 2 681 16.8
Total in Final Consumer Price 2 740 3 438 3 168 16.8
0%10%20%
30%
40%
50%
60%
70%
80%
90%
100%
20082009
75.3 76.7
11.1 9.1
4.5 4.8
3.8 3.8
5.3 5.6 Patient Care products
Biologically activenutritions & selfmedication
Cosmetics & personalcare products
Medicines Hospitals
Medicines Pharmacies
The Ukrainian retail pharmaceutical market is one of the fastest growing markets in Europe, growth fueled by the increase in average price per pack
Roland Berger Strategy Consultants
Medicines make 85,8% in 2009. They lost market share vs. 2008 of 86,4% due to better performance of other sectors
Source: SMD, Sept 2010, EB
Ukrainian Total Pharma Market CAGR of Market Sub-Sectors in 2004-2009 Values: [USD]
The best trends are in cosmetics and bioactive nutrition & self medications
16.7%
9.1%
37.9%
30.7%
16.0% 16.8%
0%
5%
10%
15%
20%
25%
30%
35%
40%
MedicinesPharmacies
MedicinesHospitals
Cosmetics &personal care
products
Biologicallyactive
nutritions &self medication
Patient Careproducts
Total PharmaMarket
All market segments have more than +16% CAGR in USD [Except Hospital segment with its +9%]
Hospital segment has the worst dynamic due to problems with state financing. However, healthcare expenditures increasing to 4,2% of GDP in 2010 would affect this segment positively
Financial crisis also resulted in significant decrease in capital expenditures, making greenfield development a viable alternative
Roland Berger Strategy Consultants
Source: SMD, Sept 2010, EB
Source: SMD, Sept 2010, EB
Values, mln UNITS 2007 2008 2009 CAGR in 2004-
2009, UNITS [%] Drugs, Retail 1 372 1 386 1 345 4.0 Drugs, Hospital 127 143 103 -3.1
Cosmetics & Personal Care Products 46 53 57 18.6 Biologically Active Nutrition & Self Medication 47 55 59 20.1 Patient Care Products 608 691 636 5.4
Total Pharma Market 2 200 2 328 2 200 3.7
Total Pharma Market Dynamics & Structure Values: [UNITS]
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20082009
59.5% 61.1%
6.1% 4.7%
2.3% 2.6%
2.4% 2.7%
29.7% 28.9%
Patient Care products
Biologically active nutritions& self medication
Cosmetics & personal careproducts
Medicines Hospitals
Medicines Pharmacies
Cosmetics & Personal Care Products and Biologically Active Nutrition & Self Medication segments have good development indicators
Medicines volume grow stable year-over-year together with weighted average cost per pack raising and medicines' price range shifting to higher segments
Source: SMD, Sept 2010, EB
Ukrainian Total Pharma Market CAGR of Market Sub-Sectors in 2004-2009 Values: [UNITS]
Cosmetics & personal care products together with Biologically active nutrition & self medication raise well both in USD and Units
Volumes of retail pharmacies’ purchases in UNITS has stagnating trend due to reduction of low-cost old drugs
Source: SMD, Sept 2010, EB
Source: SMD, Sept 2010, EB
4.0%
-3.1%
18.6% 20.1%
5.4% 3.7%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
MedicinesPharmacies
MedicinesHospitals
Cosmetics &personal care
products
Biologicallyactive
nutritions & selfmedication
Patient Careproducts
Total PharmaMarket
USD Market Share, %
[2009] CAGR, %
[2003-2009]
C Cardiovascular system 23.6 22.2
G Genito-urinary system and sex hormones
13.3 17.2
A Alimentary tract and metabolism
12.4 15.0
R Respiratory system 12.2 21.4
J General anti-infectives systemic
11.5 15.5
Others 26.9 16.2
24%
13%
12% 12%
12%
27%
C Cardiovascular system
G Genito-urinary systemand sex hormones
A Alimentary tract andmtabolism
R Respiratory system
J General anti-infectivessystemic
Others
Original Medicines Development Period: [2003-2009] Values: [USD]
Original Medicines. ATC 1 Level Development [USD]
Original 2007 2008 2009 CAGR, %
UNITS, mln 33.3 37.3 33.3 10.4
USD, mln 223.5 284.8 251.8 17.8
UAH, mln 1 129.7 1 493.4 1 974.1 24.5
EURO, mln 162.8 195.2 181.1 14.8
10.4%
17.8%
24.5%
14.8%
0%
5%
10%
15%
20%
25%
30%
UNITS USD UAH EURO
Source: SMD, Sept 2010, EB
Source: SMD, Sept 2010, EB
Source: SMD, Sept 2010, EB
Original 2007 2008 2009 CAGR, %
UNITS, mln 33.3 37.3 33.3 10.4
USD, mln 223.5 284.8 251.8 17.8
UAH, mln 1 129.7 1 493.4 1 974.1 24.5
EURO, mln 162.8 195.2 181.1 14.8
10.4%
17.8%
24.5%
14.8%
0%
5%
10%
15%
20%
25%
30%
UNITS USD UAH EURO
Original Medicines Development Period: [2003-2009] Values: [UNITS]
UNITS Market Share, %
[2009] CAGR, %
[2003-2009]
C Cardiovascular system 27.5 9.1
R Respiratory system 16.0 15.2
S Sensory organs 11.7 12.9
J General anti-infectives systemic
10.7 14.3
A Alimentary tract and metabolism
9.9 6.8
Others 24.1 8.2
27%
16%
12%
11% 10%
24%
C Cardiovascular system
R Respiratory system
S Sensory organs
J General anti-infectivessystemic
A Alimentary tract andmtabolism
Others
Source: SMD, Sept 2010, EB
Source: SMD, Sept 2010, EB
Source: SMD, Sept 2010, EB
Original Medicines. ATC 1 Level Development [UNITS]
Original Medicines Development Forecast Period: [2010-2015] Values: [USD, mio]
Source: SMD, Sept 2010, EB
The Market is to be grown by $0.5 bln during next 5 years
2009-2015 CAGR ~10-12% in USD
80
252
488
29.6%
48.1%
20.7% 20.8%
27.4%
-11.6%
26.5%
10.6% 9.6% 8.8% 8.1% 7.5%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
0
100
200
300
400
500
600
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Original Medicines Rx [USD] Original Medicines Rx [USD; PPG, %]
17
33
59
11.3%
33.2%
20.2%
12.0% 12.1%
-10.8%
24.2%
8.3% 7.6% 7.1% 6.6% 6.2%
-20%
-10%
0%
10%
20%
30%
40%
0
10
20
30
40
50
60
70
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Original Medicines Rx [UNITS] Original Medicines Rx [UNITS; PPG, %]
Source: SMD, Sept 2010, EB
Source: SMD, Sept 2010, EB
USD, mln 2009
PPG, % Market
Share, % Total Market 336.9 -9.4 100.0
Servier Group 46.3 -12.3 13.8
Sanofi-Aventis Group 45.6 -19.3 13.5
Glaxosmithkline 37.8 -12.0 11.2
Roche 25.6 235.4 7.6
Pfizer Incorporated 24.3 -20.6 7.2
Merck Sharp Dohme 22.6 6.6 6.7
Bayer Healthcare 21.2 -1.1 6.3
Boehringer Ingelheim 18.0 -19.2 5.3
Novartis 15.5 -8.2 4.6
Alcon 12.5 2.1 3.7
Others 67.5 -22.8 20.0
• TOP-10 Corporations control about 90% of market share in units
Ukrainian Pharma Market Leading Originator Companies. Retail + Hospital [Rx] Values: [USD, UNITS]. Price level [TRADE]
UNITS , mln 2009
PPG, % Market
Share, % TOTAL MARKET 36.1 -12.0 100.0
Sanofi-Aventis Group 7.7 -17.6 21.4
Glaxosmithkline 6.7 0.5 18.5
Servier Group 5.5 -10.7 15.1
Alcon 2.4 -16.1 6.6
Novartis 2.3 -10.8 6.4
Bayer Healthcare 1.7 -1.3 4.6
Merck Sharp Dohme 1.6 -17.8 4.5
Boehringer Ingelheim 1.6 -19.3 4.4
Astellas 1.5 -5.4 4.2
Pfizer Incorporated 1.3 -26.0 3.7
Other 4.0 -13.4 10.5
Source: SMD, Sept 2010, EB
9.8 10.1 6.2 7.3
8.1 8.1 8.7 9.9 9.8
2003 2004 2005 2006 2007 2008 2009 1 HY2009
1 HY2010
• Average cost of a pack: $10.1 (public price level)
• TOP-5 Corporations control over 50% of market share in USD
Source: SMD, Sept 2010, EB
Ukrainian Pharma Market Leading Generic Companies. Retail + Hospital. [Rx] Values: [USD, UNITS]. Price level [TRADE]
USD, mln 2009
PPG, % Market
Share, % Total Market 980.5 -11.0 100.0
Menarini Group 57.7 -3.8 5.9
Arterium 48.4 -20.9 4.9
Darnitsa Pharma 46.2 -18.9 4.7
Nycomed 45.5 -1.1 4.6
Zdorovje Group 42.7 -2.1 4.4
Gedeon Richter 37.6 -10.3 3.8
KRKA 36.9 -13.0 3.8
Farmak JSC, Kiev 30.5 -0.7 3.1
Yuria Ukr 24.9 3.8 2.5
TEVA 24.6 -5.7 2.5
Other 585.5 -12.4 59.7
UNITS, mln 2009
PPG, % Market
Share, % Total Market 494.6 -8.3 100.0 Zdorovje Group 57.3 -1.3 11.6 Darnitsa Pharma 53.7 -13.4 10.9 Arterium 46.6 -4.9 9.4 Yuria Ukr 26.3 18.0 5.3 Borschagovsky Chimfarm 24.1 0.4 4.9 Genom Biotech India 18.9 8.4 3.8 Farmak JSC, Kiev 17.2 7.7 3.5 Menarini Group 11.9 -5.1 2.4 Gedeon Richter 9.2 -19.2 1.9 KRKA 8.8 -8.5 1.8 Other 220.5 -14.3 44.6
1.3 1.5
0.5 0.6 0.8
1.0 1.1
1.4 1.4
2003 2004 2005 2006 2007 2008 2009 1 HY2009
1 HY2010
• Average cost of a pack: $1.5 (public price level)
• Low-priced domestic drugs cover over 45% of local market in units
Source: SMD, Sept 2010, EB
• Generic market is more fragmented both in USD, and in units than Innovative one
Source: SMD, Sept 2010, EB
USD, mln 2009
PPG, % Market
Share, % Total Market 2 293.6 -9.4 100.0 Menarini Group 104.2 -7.3 4.5
Sanofi-Aventis Group 99.4 -15.6 4.3
Novartis 86.6 -13.7 3.8
Farmak JSC, Kiev 77.4 4.7 3.4
Darnitsa Pharma 69.0 -15.7 3.0
Servier Group 63.0 -13.7 2.7
Arterium 62.0 -19.1 2.7
Bayer Healthcare 60.4 -11.2 2.6
Glaxosmithkline 60.1 -6.4 2.6
Nycomed 58.6 1.2 2.6
Other 1 553.1 -8.9 67.7
Ukrainian Pharma Market Leading Companies. Retail + Hospital Values: [USD, UNITS]. Price level [TRADE]
UNITS, mln 2009
PPG, % Market
Share, % Total Market 1 447.7 -5.3 100.0
Darnitsa Pharma 197.1 -2.0 13.6
Farmak JSC, Kiev. 103.0 -0.4 7.1
Zdorovje Group 93.4 -1.0 6.5
Arterium 76.4 -5.1 5.3
Borschagovsky Chimfarm 55.9 -5.1 3.9
Kiev Vitamin Factory 46.0 -1.9 3.2
Menarini Group 30.7 -13.8 2.1
Yuria Ukr 26.9 18.4 1.9
Zhitomir FF Ukr 25.0 19.4 1.7
Sanofi-Aventis Group 24.3 -10.3 1.7
Other 768.9 -8.1 53.1
Source: SMD, Sept 2010, EB
• TOP-10 Foreign companies control over 30% of market in USD
75.7% 74.1%
66.2% 68.5%
71.1% 73.8% 74.7% 76.0% 75.3%
2003 2004 2005 2006 2007 2008 2009 1 HY 20091 HY 2010
• Foreign manufacturers’ market share (value: [USD], public price level)
• TOP-10 Local companies cover over 45% of retail market in UNITS
Source: SMD, Sept 2010, EB
USD, mln 2009
PPG, % Market
Share, % Total Market 957.9 -7.0 100.0
Novartis 50.1 -13.8 5.2
Farmak JSC, Kiev 46.2 9.1 4.8
Menarini Group 45.5 -10.4 4.7
Bayer Healthcare 38.2 -15.6 4.0
Sanofi-Aventis Group 37.5 -11.8 3.9
Omega Pharma Group 28.5 -0.9 3.0
Interchem Ukr 22.6 48.3 2.4
Darnitsa Pharma 22.3 -7.1 2.3
Bionorica 22.2 -0.4 2.3
Glaxosmithkline 22.0 4.7 2.3
Other 622.9 -8.3 65.0
UNITS, mln 2009
PPG, % Market
Share, % Total Market 903.7 -2.9 100.0
Darnitsa Pharma 142.1 3.4 15.7
Farmak JSC, Kiev. 84.5 -1.5 9.4
Kiev Vitamin Factory 39.7 -0.3 4.4
Zdorovje Group 35.2 -0.5 3.9
Borschagovsky Chimfarm 31.2 -9.0 3.5
Arterium 29.4 -4.4 3.3
Zhitomir FF Ukr 22.8 25.7 2.5
Ternopharm Ukr 21.9 7.8 2.4
Lektravi Zhitomir 21.0 6.6 2.3
Fitofarm Artemov 19.6 -0.8 2.2
Other 456.2 -6.7 50.5
Ukrainian Pharma Market Leading OTC Companies. Values: [USD, UNITS]. Price level [TRADE]
• OTC segment CAGR is more than 19% (2003-2009) in USD
• 9 of TOP-10 OTC companies are Ukrainian ones, covering more than 45% of market in UNITS
• Foreign companies are controlling 25% of market in money terms
Source: SMD, Sept 2010, EB
B. Forecasts
• After the decline of the retail Pharma market in 2009 during crisis, we foresee stabilization in 2010 and growth in Values from +5% to +11% in coming periods
• We used currency exchange rate for USD 8, based on a margin of 7,9 – 8,3 per $1
Ukrainian Pharma Market Retail. Forecast for 2010-2012 Values: [USD, bln]. Price level [TRADE]
44.2%
23.1% 22.5%
24.8%
-6.8%
9.0%
6.0%
11.0%
-10%
0%
10%
20%
30%
40%
50%
0.5
1.0
1.5
2.0
2.5
3.0
2004 2005 2006 2007 2008 2009 2010 (f) 2011 (f) 2012 (f)
bln
USD (ths) PPG
Source: SMD, Sept 2010, EB
Source: SMD, Sept 2010, EB
Ukrainian Pharma Market Retail. Forecast for 2010-2012 Values: [UNITS]
• The market was hit hard by the crisis declining the pharma market in units during 2009 fall till mid 2010
• The main trend was in shifting price segments to more expensive levels declining of old domestic drugs amounts in pharmacies purchases
11.5%
3.6%
4.2%
1.0%
-3.0%
-5.5%
-1.0%
2.2%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
1.0
1.1
1.1
1.2
1.2
1.3
1.3
1.4
1.4
1.5
2004 2005 2006 2007 2008 2009 2010 (f) 2011 (f) 2012 (f)
bln
Units (ths) Growth in Units
Source: SMD, Sept 2010, EB
Source: SMD, Sept 2010, EB
• Hospital segment development mainly depends on governmental healthcare expenditures • Based on dynamic of its development, we foresee stabilization of Hospital market in 2010 with further visible growth
11.8%
37.1%
8.3%
39.1%
-26.9%
34.2%
9.0%
8.3%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
100
150
200
250
300
350
400
2004 2005 2006 2007 2008 2009 2010 (f) 2011 (f) 2012 (f)
Ukrainian Pharma Market Hospital. Forecast for 2010-2012 Values: [USD, mln]. Price level [TRADE]
• Healthcare expenditures CAGR is ~18.5% [2006-2010]
Source: SMD, Sept 2010, EB
Source: SMD, Sept 2010, EB
Ukraine:in prospect September 2010
SMD (Support in Market Development) - is a leading provider of market research, sales management and forecasting services to the pharmaceutical industry. Researches of: · Pharmaceutics establishments' purchase and sale audit · Hospital establishments' purchase audit · Second distribution audit · Import medicine analyses · Doctor prescription analyses · Ad Hoc research · Analytical services
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