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

Rating of Russian Pharmaceutical Distributors (Q1-Q2 2018)

Thursday, August 30, 2018

As of June 2018, a number of large Russian pharmaceutical wholesalers have experienced a significant revenue and market share decrease. The top three players in the rating are still the same, but the difference between the companies has already approached the boundaries of a statistical error, so the change of the leaders is a matter of time, which does not necessarily mean that the first and second places should switch spots.

The changes can be stimulated by two events. First, Sberbank put up for sale the building of the production and warehouse complex Raduga Production. The credit organization estimates the amount of the enterprise's debt at 4 bln RUB, while the real cost of the complex hardly exceeds 2-3 bln RUB. The amount is still significant, and given the specifics of the object, it will first be claimed by pharmaceutical distributors, especially fast-growing companies that are not yet represented in Saint Petersburg, for example Farmkomplekt, or those that might be interested in developing their presence in the region, such as Grand Capital, Puls, or ProfitMed.

Second, the board of Magnit, one of the largest Russian retailers, decided to postpone the purchase of the pharmaceutical distributor SIA International, since the terms of purchase are not fully worked out. The way they formulated their decision is rather ambiguous, but it is still possible to regard it as careful rejection of a problematic asset.

The turnover of SIA is nearly 4 times lower than that of the leaders of the Russian retail pharmacy, despite similar logistics capabilities. The stagnating infrastructure naturally generates losses, which, against the background of the already high debt burden, does not add financial stability to the company. If this business is suddenly liquidated, the market will very quickly digest those 3.7% of the wholesale market, which are still controlled by the company. For the remaining distributors, this could mean even more than a simple purchase of a regional, albeit very large, warehouse in Saint Petersburg.

Tab 1. Top 15 pharmaceutical distributors with the largest market share of direct shipments of drugs (including preferential shipments), in monetary terms (Q1-Q2 2018)