Russian manufacturers produced 149.6 billion rubles worth of pharmaceutical drugs between January and March 2021 (manufacturer’s prices, VAT included), up 47% from the same period last year in monetary terms (rubles). While it is early to make predictions, it has been the highest growth rate in five years. The growth rate in physical terms (units) was +7%, with the production volume of 1.07 billion units. The growth rate was even lower, if calculated in MDUs (minimum dosage units), reaching 4.2%, with the production volume of 19.4 billion MDUs.

Russia imported 34.5 billion rubles worth of veterinary drugs in 2020 (customs clearance and VAT included), down 8.4% in monetary terms (rubles) from 2019. The seemingly negative growth rate was due to the high-base effect, since back in 2019, the market players had stocked up their warehouses to get ready for the upcoming regulatory changes. As for feed supplements, the import volume amounted to 40.2 billion rubles, with the growth rate of +10.5%.

At the first stage of the movement, more than 82% of all goods are shipped from distributors to the final destination, which is pharmacies, healthcare facilities and others. Pharmacies are, without a doubt, the main channel for the commercial market, accounting for more than 75% of the total volume of the first stage shipments. Another 5% are shipped to the warehouses of pharmacy chains, and then the goods are redistributed to specific points of sale by the pharmacy chain’s own logistics services.

Between January and February 2021, Russian manufacturers produced RUB 101.4 bln worth of pharmaceutical drugs (manufacturer’s prices, VAT included), which is in monetary terms (rubles) 61% higher than in 2020. The growth rate in physical terms (units) is a bit lower, +16%, with the production volume of 700 mln units. If calculated in minimum dosage units (MDU), the growth rate is only +2.4% and the production volume is 11.9 bln MDUs.

In 2020, the total volume of online sales or reservation of medicinal products (pharmaceutical drugs and parapharmaceuticals) in Russia amounted to RUB 137.5 bln (end-user prices, VAT included), which is 9.3% of the market volume. The e-commerce segment in this ranking is represented only by organizations selling medicinal products on a regular basis; these volumes do not include the revenue of gray online businesses importing original drugs to Russia from other countries, as well as services selling generics unregistered in Russia.

As of January 1, 2021, a total of 67,296 pharmacies were operating in Russia. (Only pharmacies purchasing goods from distributors were counted.) Compared to January 1, 2020, the number has decreased by 1,539. The downward trend started back in April 2020, a clear impact of the COVID-19 outbreak in Russia, as well as the set of measures taken to stop the spread of the epidemic. Then the situation deteriorated due to general economic problems, including the decreasing incomes of the population, as well as the fact that it is no longer possible to impose UTII on labeled goods.

In 2020, the Central Federal District manufactured RUB bln 291.4 worth of ready-made pharmaceuticals (manufacturers’ prices, VAT included), accounting for almost 55% of the total drug production in Russia in monetary terms. However, the growth rate in monetary terms is somewhat lower than the national average – +20%, while the national average exceeded +25.6%.

January 2021 saw an occasion, curious in every aspect, which is the capitalization of the Russian Internet retailer Ozon exceeding the stock market valuation of the X5 Retail Group. It is noteworthy that the revenue of the companies for 2020 differs by more than 10 times. Moreover, Ozon did not plan to pay dividends in the near future. In fact, the company was given a truly huge credit of trust, which was naturally fueled by the boost of e-commerce last year.

For the Russian pharmaceutical market, 2020 seems to be the year of hype and defect. Both of these phenomena are absolute evil for all market participants, with distributors being no exception. However, wholesalers are obviously those of the few participants in the distribution system who can at least try to turn the situation to their advantage. Their opportunities here are quite extensive, ranging from demanding prepayment to imposing products that are not in demand, etc. This approach, well tested in the last years of the Soviet economy, found application in the new market realities, although it was mostly local in nature.

In 2020, Russian manufacturers produced RUB 534.3 bln worth of pharmaceutical drugs (manufacturer’s prices, VAT included), which is in monetary terms (rubles) 25.6% higher than in 2019. The positive growth rates have been maintained for the second year in a row; it was +26.6% last year. The production volume in physical terms (units) amounts to 4.87 bln units, with the growth rate of +4.3%. If calculated in minimum dosage units (MDU), the growth rate is remarkably higher (+5.9%) and the production volume is 81.9 bln MDUs.