Can the crisis benefit the Russian pharmaceutical market?

Experts expect that after the new US administration allows the import of generics from Canada (and this was one of Barack Obama's election promises), competition in the US pharmaceutical market will significantly increase, and this will affect the drug policy of companies in other countries. Prices for some drugs may decrease by the spring of next year. At the same time, for example, in Russia, domestic analogues may simply become uncompetitive. And if a law is passed in the United States in the near future, according to which manufacturers will have to set prices for medicines only during consultations with state regulatory authorities (insurance companies are currently coordinating them), then drug prices in America will decrease very significantly. According to the Senior Vice President of the Association of Pharmaceutical Researchers and Manufacturers of the USA (PhRMA) Ken Johnson, this measure alone will reduce the revenues of the industry giants by $10 billion to $30 billion. Manufacturers in Russia will also have to negotiate with the state on drug prices.

Gennady Shirshov, Executive Director of the Union of Professional Pharmaceutical Organizations (SPFO), commenting on this issue yesterday at a meeting of experts with journalists, called another factor influencing the price of drugs the tightening of budget policy in most countries, including in the Russian Federation, as well as the massive withdrawal of innovative Western medicines from patent protection, which will reach collapse sizes from 2010 to 2012. Pharmaceutical markets, including the Russian one, will begin to be filled with cheaper generic drugs instead of innovative bestsellers.

According to experts, government agencies in the Russian Federation are unlikely to increase duties on the import of drugs in the near future. "But what can happen already in 2009 is changes in the rules of public procurement of medicines. Currently, purchases of medicines under the OMNLS are made in the regions through auctions, and the main factor is the price, which is not decisive for the medicine. After all, no less important characteristics are the quality and safety of the drug. If the auction system is not changed, then with the only priority of a low price, the risk of low-quality drugs entering the state drug supply programs for beneficiaries increases, since unknown suppliers who do not spend resources on control systems can participate in auctions," Shirshov noted. But even with price restraint, according to the expert, over the past five years, the increase in drug prices averaged about 70%. "The price of medicines will also be affected by the transition of settlements in companies to euros and the rise in the cost of loans," adds WHO expert from the Russian Federation Andrey Meshkovsky.

According to experts' forecasts, the collapse risks are low for systemically important drug suppliers and leading domestic manufacturers, despite the financial crisis. The most difficult situation may be retail, where the turnover of money has slowed down, as well as manufacturers with a small assortment portfolio.

Deals on the acquisition of domestic companies in all sectors of the pharmaceutical market cannot be expected in the near future, as well as companies entering the IPO market before the stock market stabilizes. In general, experts believe that the financial crisis can become a catalyst and one of the engines for further updating of the pharmaceutical market, as it happened in the Russian Federation in 1998.