2021 Russian pharmaceutical market facing recession

2021 Russian pharmaceutical market facing recession  

Next year will be a challenge for a pharmaceutical Russian market as a result of unified tax on imputed income cancellation, labelling and 20% market limitation for drug stores.

What will next year bring?

Eugeny Nifantiev (CEO of Neopharm pharmacy chain) believes that the next year will be a challenge for the whole Russian pharmaceutical market due to legislative changes planned for 2021 which will surely affect the field and evaluate the prospects.

Eugeny Nifantiev declares that the market is too much full of regulation. If some new regulating factors are added the field is at risk to be collapsed leaving the folks with no drugs. Cheap drugs may become first, since their prime cost and manufacture costs will be in excess of their prices.

Eugeny Nifantiev also believes that prohibition to go beyond market share will strongly affect regional chains only. Pharmacy chains of municipalities and federal cities never exceed the 20% share in any region; thus in the regions, they will have a more advantageous position than their regional contenders who never achieve such values.

Prohibition of marketing bonuses from drug manufacturers to the lowest ever 5% is also an obstacle. Currently the bonuses strongly help to promote the pharmaceutical industry and any restrictions will increase the drug cost.

Drug labeling as a collapse forerunner

Anatoly Tenzer (Head of Business Development of the Katren Research and Production Company) is more pessimistic regarding the pharmaceutical industry. Unproved labelling program may seriously affect pharmaceutical market in the immediate future. Possibly, next month will show the consequences of unproved innovations. 

Vendors cannot sell almost half of the labeled products; drug stores often fail to accept up to 40% of the goods recieved.

Number of claims for support due to latest innovations increased dramatically and keeps ascending; in early days we had hundreds of daily cases. Now these make about a thousand a day, Tenzer states.

However, not all of the participants are pessimistic about the legal changes in pharmaceutical industry.

G. Inozemtsev (Head of Lekarstvennaya Ecosistema, LLC) is pretty sure all the pessimists go wrong about Russian pharmaceutical industry. Current recession is much due to COVID-19 pandemia and labelling changes, and will negatively affect second half of the year; however future periods will not be affected.

A. Filippov (Rigla CEO) is pretty sure about soonest labelling concessions which will contribute to normal volumes of manufactured production. He predicts medical market return to stability at the end of 2021.