Russia Pharma Market - Slides from the Generics and Biosimilars Strategies EMEA Conference 2011,...

Russia: The “Next Frontier”?

Milena IzmirlievaPanel Discussion Opening Remarks

Next Gen: Generics and Biosimilars Strategies EMEA, Istanbul, Turkey, 27 September 2011

Copyright © 2011 IHS Global Insight. All Rights Reserved.

Agenda

What are the key market trends, regulations and healthcare system considerations?

What do Russian patients/customers expect?

What is the best strategy for entering the market and securing growth?

What impact may biosimilars have in Russia and how should they be approached?


Russia: an Emerging Market

Russia: the R in BRIC-MT

What qualifies Russia as an emerging market?

– Unutilised potential (USD88 per capita compared to OECD average of USD404)

– Impressive growth rate

– Expected to continue growing at nearly 10% in local currency (Source: IHS Global Insight’s forecast)


Russia: P&R System in Flux

Full reimbursement for hospital drugs – in theory

Out-patient reimbursement under the DLO programme (federal and regional beneficiaries): expenditure per person set to increase by 26% y/y to US$33.4

Two DLO reimbursement lists:

– Essential Drug List

– Chronic Disease List (“7 Nosologies”) list

Universal access to reimbursable medicines planned for 2015


Russia: P&R Controls

Price regulation delays

Price caps

Class/Therapy area reference pricing

Positive list

Prescribing guidelines

Tendering

Other


Tendering Yields Savings

Russia saved 4.1 bln roubles (12.7%) in comparison to 2009 on the seven nosologies reimbursement programme:

– 2% saving (646 mil rbl on tenders in which two or more companies participated)

– Starting price was lower even though in 26 out of 39 tenders there was only one participant

– More than 80% of savings came from blood clotting factors

– Availability of Russian-made biosimilar versions contributed to savings


What’s in a Package?

So far little technology transfer as Russian companies are involved in the last – packaging – part of the process

But re-packaging is a useful cost-containment tool:

– Price of Mabthera packaged by Pharmstandard was 0.5% lower than that sought by the originator in 2009

– Price of Velcade (packaged by Pharmstandard) fell 14% in 2010

– Price of Interferon beta-1a (packaged by Protera and Biotek) was 19% lower in 2010


Price Increases Still Possible

Data from PharmOnLine International (POLI)

Rate of change: 8%

Number of values %

CONSTANT PRICE 1784 23.9%

PRICE DROP 168 2.2%

PRICE INCREASE 5516 73.9%

Total 7468 100.0%


Russia: A Mature Generics Market?

Characteristics that set Russia apart from other emerging markets

Long traditions with generics – particularly branded generics

Long established trade patterns and trusted brands from regional generic players

Not that different from European peers in terms of cost-containment trends


Russia: A Branded Generics Market

“Generics account for slightly more than 50% of prescriptions we dispense. Our clients want the cheaper drugs. Nobody really explains to them the differences between generics and branded.”

Pharmacy Manager, St Petersburg

“If a prescription is for a generic, it is for a named generic.”Pharmacy Manager, St Petersburg

“Many of the patients will not accept substitution.”Head of Pharmacy, Astrahan

Source: IHS Global Insight’s GMP Panel, World Markets Generics and Biosimilars Service: Russia country report


Russian Biosimilars Landscape

Biosimilar human growth hormone Pharmstandard: Rastan (somatropin)

Tevagrastim: price differential vs Neupogen 31%

Average price/unit/MGGENOTROPIN

Average price/unit/

MGBIOSIMILAR

% differential

Average price/unit/MGHUMATROP

Average price/unit/

MGBIOSIMILAR

% differential

898.51 741.54 0.17 854.67 741.54 0.13


Market Entry Strategy Considerations

Local alliances

Vertical integration

Clinical trials location

Local production/technological exchange

Creating good will

Being there for the long term


Visit the IHS Healthcare & Pharma Blog

Get weekly insights on the events and trends shaping the industry:

www.ihs.com/healthcareblog

Russia Pharma Market - Slides from the Generics and Biosimilars Strategies EMEA Conference 2011,...

Health & Medicine

Transcript of Russia Pharma Market - Slides from the Generics and Biosimilars Strategies EMEA Conference 2011,...