The Russian pharmaceutical market - current state of affairs

Oxana Kolosova of iVrach.com explores the Russian pharma market in pharmaphorum's emerging markets themed months and looks at the unmet needs of Russian healthcare providers and patients.

Although Russia spends just 4.5 per cent of its GDP on its healthcare, on a per capita basis it has more physicians, hospitals, and health care workers than almost any other country in the world. It is mainly a state-run single payer system. Private healthcare sector is limited, with leading private chain of Russian clinics accounting for only 1.3% of the total market.

Russia has the oldest population among other emerging markets, with 17% per cent of its citizens being aged 60 or older. Prevailing diseases are diabetes, cancer, cardiovascular diseases, AIDS and others. At a primary care level there is still a relatively low level of knowledge about prevention, diagnosis and treatment of many health problems. Evidence-based medicine is mostly favored by younger doctors while older generation of HCPs treats it with suspicion and relies on familiar opinion-based medical environment. Russian physicians are quite conservative in their clinical decisions and tend to prefer tried-and-trusted medications.

Russian patients do not trust physicians and are often reluctant to follow their recommendations. 37 per cent of them double check their doctors' recommendations online.

The Russian pharmaceutical market is 11th largest in the world, according to IMS Health and stood at $29bn in 2012. It is predicted that for the next four years it will see an average growth rate of 13.4% annually.

Up to 70 per cent of the pharmaceutical products are financed out-of-pocket by patients. The existing state reimbursement system covers around 20% of medication costs and guarantees free drug provision only to certain vulnerable groups of patients.

Russia currently contributes only 0.2 per cent of the world's supply of pharmaceuticals and its domestic market is dominated by imported drugs (75 per cent). The Russian government aims to increase the share of local drug producers to 50 per cent by 2020. As a result, a regulatory regime that favors local manufacturers was introduced. This left foreign companies to operate within a reduced commercial segment and therefore proper marketing strategies became of a paramount importance for them.

Marketing pharmaceuticals in Russia was never easy, yet it is becoming more and more challenging as promotional opportunities continue to shrink. Despite 10 per cent increase in field force spend in 2011 the number of reps' visits grew only by 2 per cent and just 34 per cent of Russian physicians were ready to start or increase a brand prescription following a rep visit. Furthermore, in 2012 access to physicians was significantly restricted legally and in 2013 steps were taken to stop OTC products' advertising to public.

With the decline of traditional communication channels new web-based tools emerged. The Internet penetration in Russia is expected to grow from 33% in 2009 to 55% in 2015 and mobile penetration is already very high. Daily audience annual growth of the Russian medical web was at 60% and third of all searches were for healthy lifestyle and eating advice, as well as information on medical conditions and their symptoms.

The proportion of physicians with internet access and usage has increased significantly over the past few years as well, with only a small minority of doctors distance themselves from this technology. In 2012, 65 per cent of Russian physicians reported using the internet for professional purposes and 52 per cent said they have accessed HCPs professional networks.

Inspired by these trends, pharmaceutical companies and healthcare service providers began to employ new digital formats to enhance their communication with physicians and patients. Dealing with digital media inevitably requires going through a learning curve and many pharmaceutical companies already began to acquire digital experience with appointing dedicated personnel and launching various digital projects. The results so far have been very positive and promise to bring considerable opportunities for the global pharmaceutical industry in addressing unmet needs of the Russian HCPs and patients.

About the author:

Oxana Kolosova is Managing Partner at iVrach.com –the leading professional network for Russian speaking physicians.

A graduate of Moscow Medial Academy, Oxana started her carrier in medical marketing with multinational pharma before focusing on medical communications and market research in the agency world. Originally from Moscow, Russia, Oxana worked for several years in Ukraine and then at Dendrite Europe in Windsor, England.

Oxana's cross cultural professional experience helped her a lot in developing iVrach to become the major online knowledge and information sharing hub that supports Russian-speaking physicians in making the best decisions for the care of their patients.

Closing thought: How can the unmet needs of Russian HCPs and patients be met?