November 19th, business conference “Pharmaceutical market 2014: growth points” organized by Pharmaceuticals Observer magazine took place in Moscow. RNC Pharma presented it’s view on the trends and development perspectives of retail market in general, and Russian pharmacy segment in particular.

On the basis of 1-3 quarters of 2014, the significant increase of pharmacy chain segment concentration level is obvious. Currently, 42.3% of the top-100 Russian pharmacy chains is commercial retail market. The segment consolidation level has positive influence on investment attractiveness. The main consolidation instruments are M&A deals, which we observed during the past 1,5-2 years, along with marketing associations development. These processes have significantly changed power balance between largest pharm retailers in Russia. Rigla pharmacy chain is still a leader; however, A.V.E. Group is already close, loosing just a 0,1%. Doctor Stoletov chain also made it to the top-5 with a share of 2,4%, thanks to the union with “Ozerki”. We suppose, the merge and company takeover trend will continue for half a year at minimum, at least for the previously announced deals. At the same time, many market players interpret crisis periods in economy as a positive moment for business development.

We see a reduction of the consumption level in real terms for years now. This is accompanied by the average price growth, which is boosted, among other things, by the inflation. This, in it’s turn, confirms a steady growth trend in the market popularity of the so-called "Smart packages". Nevertheless, the crisis in the pharmaceutical market is not so noticeable, and the forecast of further industry development is so far quite optimistic. For instance, the pharmacy retail growth rates for 2014 will will be in the range of 10-12% in a rubble equivalent, 2015 forecast shows the more mild dynamics (between 8-10%), mostly due to the Rx-drugs group development. In the current macroeconomic situation, OTC-products (Over The Counter) and, in greater degree, dietary supplements may soon be in the risk group, if the demand falls due to the compensatory price increase of these assortment groups.

Complete presentation is available by the link