10.29.2013

According to the latest report from PMR, a research and consulting company, entitled “OTC market in CIS countries 2013. Russia, Ukraine and Kazakhstan. Comparative analysis and development forecasts for 2013-2015” the OTC market in the region will increase by around 13% in euro in 2013 and will be worth around €10bn.

Russia emerges as the largest region, and Kazakhstan as the most promising

In 2012 there was a year-on-year increase of around 17% in the OTC market in the CIS countries, to around €8.9bn. PMR forecasts suggest that in 2013 the growth of the market will slow to around 13% in euro. “The main cause will be a less substantial increase in the OTC drug and dietary supplement market in Russia (which accounts for 84% of the market). In Ukraine the growth rates for the OTC drug  and dietary supplement subgroups also will be lower than those of 2012, but because of the smaller sizes of these markets, this will not have such a significant effect on the overall OTC market in the CIS”, according to Agnieszka Skonieczna, a Senior PMR Pharmaceutical Market Analyst and the author of the report. 

According to PMR forecasts, the most attractive market in the next three years in the region, among the countries analysed, taking forecast market growth into account, will be Kazakhstan, where the market will develop relatively fast and reach the CAGR of 17% between 2013 and 2015.

Non-pharmacy OTC sales not allowed in the region

At present, non-pharmacy sales of OTC drugs and dietary supplements are not allowed in any of the CIS countries analysed.

The idea of introducing the sale of some OTC drugs at places other than pharmacies has recently been discussed in Russia. This is not the first attempt to widen the OTC drug subgroup by means of non-pharmacy sales outlets. In 2009 the Ministry of Industry and Trade suggested such an idea, but it was rejected by the Ministry of Health and Social Development.

In late 2012, the Health Ministry said that it did not see any reason for opposing the sale of OTC drugs at places other than pharmacies. In January and April 2013, the ministry even announced that it intended to create a list of drugs which retail chains will be allowed to sell. After much discussion,

however, no decision has been made. Opponents of the idea have doubts about the lack of appropriate conditions for the storage of OTC medicines by supermarkets and other food stores.

“Furthermore, as OTC drugs account for a substantial proportion of pharmacy turnover, the introduction of non-pharmacy sales could lead to the closure of many pharmacies and, therefore, a reduction in the availability of drugs in general” adds Agnieszka Skonieczna.

The CIS countries are characterised by high shares of OTC drugs in the respective pharmaceuticals markets, which range from 40% in Kazakhstan to 49% in Russia.

Share of OTC drugs in total pharmaceutical markets of the CIS region (%),  by value, 2012

Sourse: PMR  

Domestic companies play an important role on the OTC market

Companies of local origin are important players on the OTC market in the CIS region. In Russia the largest OTC drug manufacturer is Pharmstandard, whereas the dietary supplement market is dominated by domestic players. Evalar alone accounts for between one-quarter and one-fifth of the market, and, along with RIA Panda/Vis and Akvion – one-third of pharmacy dietary supplement sales.

The OTC drug market in Ukraine is led by Farmak. The leading three players in both 2012 and H1 2013 include three more domestic companies: Interchem, Darnitsa and the Kiev Vitamin Factory.  

In Kazakhstan, whose OTC market is the least well-developed in the region, the situation differs from that in Russia and Ukraine – multinational companies play a leading role on the OTC drug market. The most highly ranked local company, Chimpharm, owned by the Polish concern Polpharma, was ranked in tenth place in 2012, with a market share of around 3% by value.

Note: total OTC market value includes pharmacy sales of OTC drugs and dietary supplements in Russia and Ukraine, and pharmacy and hospital sales of OTC drugs in Kazakhstan.

Sourse: PMR, 2013