Pharmacy chains activity analysis

Pharmacy chains activity analysis

Russian pharmaceuticals retail chain segment evaluation, both on the level of the state and in particular regions. Pharmacy chains development forecast


Product sales and separate market development forecast, based on unique mathematical models

Business and marketing plan development

Development of detailed business-plans, required to evaluate the reasonability of project start

Search of partners for contract production in Russia

Potential partners search and evaluation, based on their technical opportunities, appropriate experience, and reputation

Monitoring of import substitution

assessment of the main trends of import substitution policies and localization processes in the pharmaceutical market in Russia, the key beneficiaries and companies at risk

Ranking of Russian Pharmaceutical Distributors (Q1 – Q2)

Tuesday, August 27, 2019

It is unlikely that by the end of this year the pharmaceutical wholesale will have seen any significant achievements or failures. As of yet, the market is only developing in terms of public procurement. The public procurement segment has always been a very specific area, with a limited circle of players and its own rules, which are also very vaguely worded. For example, that massive breakdown in trading due to difficulties in setting the initial maximum price of the contract.

However, given the economic conditions and the general direction of the regulatory policy in healthcare, typical retail players began to show interest in the public procurement segment. In particular, GDP, the wholesale division of Pharmacy Chain 36.6. It is probably not only about additional revenue but also about increasing the overall profitability of the business, and the battle for increasing profitability in the pharmaceutical wholesale is in full swing. The options here are different, though. Some are entering new segments, some are expanding their customer base. For example, Protek resumed deliveries to Pharmacy Chain 36.6, after a long hiatus due to the settlement of financial obligations.

There are more radical examples. Magnit Pharma (formerly SIA International) announced a gradual refusal to cooperate with third-party clients in the pharmaceutical retail, since they are planning to focus on building their own retail. The latter, however, is still difficult, as of July 1, 2019, Magnit had only 252 pharmacies, which is a very small number for the once largest pharmaceutical distributor in Russia. They are not completely refusing to work with other pharmaceutical chains, but rather trying to select the most stable players. By the way, the new owners have put their regional assets on sale, and are also trying to load empty capacities with non-medicinal products, in particular to Magnit Cosmetic stores.

In addition, distributors will soon have to solve another non-trivial problem that can arise due to the active development of marketplaces. The latter are still perceived as partners, however, in the near future, they will surely be tempted to build direct relations with manufacturers, at least in terms of actively promoted products. So far, the constraining factor is the lack of licensed warehouse capacities for online marketplaces and the rather high cost of an entrance ticket to the market, but very soon it will be possible to imagine a situation where these capacities will be rented from the leaders of the pharmaceutical wholesale.

Tab 1. Top 15 pharmaceutical distributors with the largest market share of direct pharmaceutical drug shipments (including preferential shipments), in monetary terms (Q1 – Q2 2019)