Russians bought $5.75 billion worth of drugs & food supplements over three quarters of 2007

Over three quarters of 2007, Russians bought drugs and food supplements from pharmacies for $3.95 billion. The market volume in September 2007 amounted to $490 million or 9.6% more than that in August and 18% more than that in September last year. Analysts of “Pharmexpert” estimate that the capacity of the pharmaceutical market over nine months of 2007 amounted to $5.75 billion. “The difference is explained by DSM Group evaluating the market capacity in wholesales prices and “Pharmexpert”, in retail prices. The difference is made up by the commercial markup which is around 30%”, explains Alexander Kuzin, the general director of DSM Group.

Simultaneously, analysts observe a dynamic growth in the commercial segment of the pharmacy market: according to DSM Group, the growth has amounted to 20.19% against a similar period last year, “Pharmexpert” estimates the same at 18%. “The healthy growth in the segment is driven by the overall increase in public revenues and by the refusal of many beneficial patients to stay with the DLO program. Along with the shrinking of the beneficial segment in the pharmacy market, a shift toward commercial sales of medicines has begun”, adds the pharmacy market expert David Melik-Guseinov.

The capacity of the pharmacy market over the year is likely to amount to $14.4 billion (up 16%). Melik-Guseinov thinks that the figures will be less impressive, at $11.5-12 billion (plus 10%). According to him, the market has seen a tough year. “The market is stagnating which has been caused by a weaker dollar and by inflation. In 2006, market participants planned budgets assuming a 15% growth which has never happened", says Melik-Guseinov.

Vedomosti, 07.12.2007, “Pharmacists earn up to $5,75 billion”

Research and production bio tech center worth 60 million euros to be built in Vladimir’s region by 2010

The project that will last for four years is implemented within a program by the Ministry of Public Health and Social Development of Russia to produce import displacing medicines and includes the rehabilitation of the existing production and the construction of new production shops making bio additives, and the erection of lab buildings with an overall space of 4.5 sq. m. Investment in the project is expected to reach 60 million euros. New production branches for making tablets and capsules with an output of 10 million packages a year were recently commissioned at Volgynsky locality in Petushinsk near Vladimir. A production facility has been also launched for making genetically engineered drugs with a gas heating unit, administrative building, cafeteria in operation and service infrastructure having been rehabilitated. 

Rossiyskaya gazeta, 11.12.2007, “A profit tablet”

Owner of “SIA International” I.Rudinsky determined to build a chain of medical centers worth over $2.5 billion

The commercial medicine market will grow to $7 billion by 2010 as forecasted by experts; new services are to be benefited from by AFK “Systema”, “36.6 pharmacy chain”, and other investors. I.Rudinsky is committed to build multi-service medical centers and prenatal centers in regions. The new chain will presumably be owned solely by I.Rudinsky and he intends to create around 50 such centers until 2011-2012. The cost of each such center can amount to some $50-60 million and the aggregate expenses will exceed $2.5 billion. The businessman expects to raise the funds to invest in the new project from sale of “SIA International”. Starting from the last spring, the purchase was negotiated by Millhouse Capital Management; however, currently the American TPG Capital is seen as the principal suitor. However, by selling only 51% of SIA (I.Rudinsky controls almost 80%), the businessman will acquire more than $1 billion. A part of the assets will be used by him to develop the distribution business and the remaining funds will be vested in adjacent businesses”, reports a source close to SIA. Market analysts think that the new project of SIA's owner will be well in demand, especially in regions.

Kommersant Daily, 13.12.2007, “Igor Rudinsky invests in clinical conditions”

Bio additive producer “Mertsana” looking for a strategic investor

“Mertsana” company rated among the top five largest Russian makers of BAS is keen to find an investor. A market source familiar with the plans of “Mertsana” reports that it has to do with the sale of “at least a controlling stock to a strategic investor and the transfer of the whole company is viewed as an opportunity”. A co-owner of “Mertsana” I.Gukovsky has confirmed the information saying that the company is considering selling a substantial part of or the entire business. The whole stock of the company is evaluated by market participants at $10-15 million. A final buyer has not been defined yet; however, reports are that negotiations are underway with major domestic manufacturers (the three leaders of the Russian pharmaceutical market including “Pharmstandard”, “Otechestvennye lekarstva”, and Stada). Experts point out that the company has sustained substantial losses over nine months of 2007: sales volume fell 57.4% compared with a similar period in 2006. Unless the company gets additional investment, it will be unable to develop and will continue losing its market share.

Business & FM, 11.12.2007, “Mertsana” after a market leader”

“Rigla” pharmacy chains wins in “Beauty and Health” nomination of “Company of the Year” Prize

The annual “Company of the Year” Prize is called the “Prize of Prizes” in the world of business in Russia. The general director of “Rigla” pharmacy chain O.Sheludchenko says that the “Company of the Year” is one of the most respected prizes of the Russian business community. “The award is most important to our company. It means, above all, a high estimate of the quality of our work and competence, the acknowledgment that “Rigla” made a major contribution in the market development last year”, she pointed out. - Meanwhile, the award to us is yet another stimulus for going on further, advancing to become the first among the best in the retail market”.

Advis.ru - INFOLine (St. Petersburg), 11.12.2007, “Rigla” pharmacy chain merited as the “Company of the Year” on December 4, prizes granted for the National Business Award “Company of the Year 2007”

Researchers report a quarter of US made bio additives contain steroids

A study to verify the purity of bio additives commercially available in the US undertaken by a non-governmental organization Informed Choice under the guidance of Britain’s HFL found that a quarter of purchased samples of BAs contained traces of steroids and 11.5% of these held prohibited stimulants. HFL bought and tested the most selling brands of BAs but held back the names of the manufacturers and the medicines. Out of 52 additives subject to tests, 13 proved to have the traces of steroids. Researchers believe that prohibited substances were accidentally administered to the products as manufactures had failed to properly clean their equipment. “The presence of steroids and stimulants in BAs still presents a major problem. It is clear that not all manufactures adhere to technology and provides appropriate control to ensure the safety <…> of consumers of bio additives”, reports HFL.

Pharmvestnik.ru, 10.12.2007, “A quarter of bio additives (BAs) made in the US contains steroids”