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Ukrainian pharmaceutical market

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Ukrainian pharmaceutical market 2010

Ukrainian pharmaceutical market 2010

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  • We introduce ourselves as one of the renowned Pharmaceuticals Manufacturing companies in Pakistan with the name of Glitz pharma. Our company has been declared as state of the art manufacturing facility by Ministry of Health, Pakistan in recognition to its modern and high tech equipments and highly qualified staff. The Company is focusing on the quality and economy while following latest cGMP requirements. We are already exporting our products to Asian Market........ looking for importer for our ranges of products in ukraine ...... please visit our website www.glitzpharma.net...... If any further information is required ,please don't hesitate to contact me. export.glitz@glitzpharma.net
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  • WE ARE MANUFACTURAR OF MEDICINES HAVING OUR UNIT IN HIMACHAL PARDESH , INDIA . IT IS A SPECIAL ECONOMIC ZONE , EXCISE FREE . WE HAVE ALL SECTIONS UNDER ONE ROOF. CONTACT US FOR IMPORTS IN YOUR COUNTRY. CALL ME AT +919501691371, OR VISIT US AT WWW.POSITIVEMEDICARE.COM OR MAIL AT kamal@positivemedicare.com
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  • looking for supplier who r interested to get registered their products in Ukraine. we r based in Ukraine and engaged in marketing and distributing pharmaceutical products.
    plz visit shivmed.com or contact at shiv_medpharms@mail.ru
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  • looking for a distributor for our ranges of products in ukraine
    please visit our website www.dynamictechnomedicals.com and if any interest please contact satishev@dynamictechnomedicals.com
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  • 1. Ukraine:in prospect September 2010
  • 2. DefinitionsATC EphMRA classification for pharmaceuticals (ATCs are the intellectual property of EphMRA(European Pharmaceutical Market Research Association), and are used to assess products’ dynamics against similar products) and own SMD classification worked out for non-pharmaceuticalsBig Pharma the top twenty pharmaceutical companies and their two trade groups, Pharmaceutical Research and Manufacturers of America (PhRMA) and Biotechnology Industry OrganizationCIS Commonwealth of Independent States. A regional organization, whose participating countries are former Soviet Republics, formed during the breakup of the Soviet Union. CIS countries: Republic of Belarus, the Russian Federation, Ukraine, Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Tajikistan, and UzbekistanConsumption final purchase of goods and services by individuals/consumersGeneric company company that produces and/or sells genericsGeneric drug a medicine containing the same active ingredient in dosage form, safety, strength, route of administration, quality, performance characteristics and intended use as a particular originator drug and is not (or no longer) patent-protectedGMP Good Manufacturing Practice, a part of a quality system covering the manufacture and testing of active pharmaceutical ingredients, diagnostics, foods, pharmaceutical products, and medical devicesOriginator company a corporation which holds the patent for the active ingredient of the productOriginal drug a novel drug that was under patent protection when launched onto the market for the first timePublic Price Level price which is used to sell the product from the pharmacy (POS) to the final consumer. Pharmacy (POS) sales-out price level (Consumer Prices)Trade Price Level price which is used to sell the product from a distributor/wholesaler to a pharmacy (pharmacy purchase price)(PPP)
  • 3. A. CIS RegionB. Ukraine Pharma MarketC. Forecasts
  • 4. A. CIS Region
  • 5. CIS RegionAbstract In Brief The CIS is comparable to a very loose association of states and in no way comparable to a federation, confederation or supra-national organization such as the old European Community Belarus It is more comparable to the Moldova Commonwealth of Nations. Although the CIS has few supranational powers, it is more Ukraine Russian Federation than a purely symbolic organization, possessing coordinating powers in the realm of trade, finance, lawmaking, and security Georgia Armenia Azerbaijan Kazakhstan Kyrgyzstan • Total GDP is ~ $1.6 trillion (est. 2009) Uzbekistan • GDP Growth Rate = 4.3% (IMF Forecast) • Population is ~276 mln people (est. July 2009) Turkmenistan Tajikistan The International Monetary Fund (IMF) has raised forecasts for economic growth in CIS countries in 2010 up to 4,3 percentSource: Eurostat, IMF, CIS Statistic Committee, SMD "World Economic Outlook"
  • 6. CIS Pharmaceutical MarketExecutive SummaryAlthough the original drugs market in CIS will develop at a slower rate than that of generic drugsbetween 2010 and 2011, the growth rate of original medicines for the whole region will be positive.It has, for the time being, been compromised by the cost-containment policies of the CIS countries,which have been stepped up during the global financial crisis. The global financial crisis left its footprint on the CIS Pharma market however the impact is dependant on the level of each countrys health system development. In CIS countries where there is no reimbursement system there were remarkable changes in consumer behavior. In particular, increased price sensitivity with a switch to cheaper medicines and generic products although not significantly. Indian pharma companies have increased their momentum in these markets through a spate of mergers and acquisitions, new tie-ups, setting up of joint ventures and subsidiaries. Some of these companies are making investments in terms of JVs and manufacturing facilities in Russia, Ukraine and Uzbekistan, for instance. Some individual companies are also looking at collaboration with local institutions or companies in R&D. A number of consolidation processes recently took place in The pharmaceutical market in CIS region is the generic arena, which were of great importance for the CIS dominated by generic drugs. Market region. For example, Israel’s Teva gained a strong presence in structure and key players are different from the region through the acquisition of Barr in July 2008, which those in western markets. included one of the largest local generic drug producers - the Rx vs. OTC ratio is almost 50/50. OTC Croatian company Pliva. segment traditionally is more developed than in western marketsSource: SMD, Sept 2010, EB
  • 7. CIS Pharma MarketFeatures • Mainly the biggest countries, except Russia (DLO/7) is out of pocket markets. Where more than 80% is covered privately by patients. • Almost absence of reimbursement / obligatory medical insurance (except Moldova and of rudimentary level in Kazakhstan and Georgia) – possible introduction in two / three years. (Russia and Ukraine are discussing the introduction of a system of public health insurance, which has been under discussion in Ukraine since at least 1996) • Still according to Constitutions medical help used to be free of charge to the population. In practice a considerable amount of hospital treatments are compensated by governments. • These markets are largely generic markets – approximately 85% is covered by brand generic products. • However originator companies (patented Rx) are drivers of the market. • Price difference between original (patented) and generic products is much lower than in mature markets • Strong local production, mainly historically concentrated in Ukraine (makes 65% of consumption in units and 30% in values in 2009) • Big Pharma have not included these markets in their patent exclusivity list – the consequence is that there are a lot of generics available for products currently covered by patent (e.g. Viagra, Liprimar) in Western countriesSource: SMD, Sept 2010, EB
  • 8. CIS Pharma Market Dynamics Ukraine; Pharma Market Population, 11.41% mln people CIS Values (USD), mln Y2009 Russia* (incl. DLO, Russia* (incl. 145,5 17 500 hospital) DLO, hospital) ; 74.81% 46,7 Ukraine 2 674 16,9 Kazakhstan 975 10,4 Belarus 653 22,1 Uzbekistan* 520 7,4 Azerbaijan 240 5,4 Georgia 235 Kazakhstan ; 4.17% 4,4 Moldova 179 Tajikistan**; 0.43% Belarus ; 2,79% Uzbekistan*; 2.22% 3,7 Armenia* 112 Turkmenistan**; Azerbaijan ; 1,03% 4,5 Kyrgyzstan** 110 0.43% Georgia; 1.00% 4,4 Turkmenistan** 100 Moldova; 0.77% Kyrgyzstan**; Armenia*; 0.48% 5,7 Tajikistan** 100The pharmaceutical market 0.47% 277,1 Total 23 018is driven by factors such as Source: SMD, *Pharmexpert, **SMD estimationageing population,increasing demand for CIS emerging Pharma Marketimported and expensivemedicines, and increasing (only medicines) made $23 bln Growth Rate approx. [-5%]disposable incomes in 2009 at TRADE price level, in USD in 2009 (TRADE price which is equal to $28 bln in level), compare to growth in PUBLIC price level 2008 of +20% in USD as an impact of the crisis Source: SMD, Sept 2010, EB
  • 9. B. Ukraine Pharma Market
  • 10. Ukraine Territory Ukraine is the largest country in Europe in terms of territory. It covers a territoryCountry Profile of 603,7 thousand square kilometers. (France is the second largest country on Russia the continent with a territory of 544 thousand square kilometers). Pharma Trends The pharmaceutical industry is a fast Ukraine has bilateral relationships with many growing sector of the national economy. countries all over the world. Despite getting its As one of the largest markets in Europe independence only less than 20 years ago there exist greater tendencies for large (August 24, 1991), it is emerging as a major financial turnovers. Today Ukraine is player in trade and industry in Eastern Europe. one of the biggest consumer markets in Its pharmaceutical industry is in need of help at Europe. There are national the moment and this makes it a good time for pharmaceutical factories that produce foreign pharmaceutical companies to step in. medicines for local consumption. Ukraine However, the production doesn’t match market requirements. Population In terms of population Ukraine is one of the largest in Europe. Ukraine has a Such products must be imported from foreign population of ≈46 million people. It is one manufacturers to supplement the local market of the biggest consumer markets in needs. However, before importation, foreign medical Europe. Population density is about 77 products must be registered with the State Health people per sq. kilometer. Approximately Ministry. The latest statistics confirmed that the 77.8% of the population are ethnic actual annual supply of essential imported medical Ukrainians and 17.3% ethnic Russians. The products is far less than the demand. remaining 4.9% of the population includes ethnic Poles, Jews, Bulgarians, Tatars, Hungarians, Romanians, Greeks, and other nationalities Ukraine surrounded in the east by theTrends Russian Federation, in the north by Whilst Ukraine was hit hard by the economic crisis, the economy is expected to recover in 2010. The Belarus, in the west by Poland, Slovakia market is driven by strong import growth; imports rose by a CAGR of 34.0% over 2004-2008. Import and Hungary, in the south west by growth is expected to remain strong due to a lack of locally manufactured innovative products. The Moldova and Romania, and in the south pharmaceutical market will grow more rapidly if the government will manage to implement an Ukraine by the Black Sea. effective health insurance system, which has been under discussion for several years LocationSource: SMD, Sept 2010, EB
  • 11. UkraineEconomic OutlookUkraine benefits from a consumer market of approximately46.01 million people, and enjoys an opportune geographicallocation, a mild climate, a rich natural resource base, a highlyeducated labor force, a well-developed transportinfrastructure, and a well-developed tradition of scientificresearch and development. Despite the fact that Ukraine hasexperienced steady economic growth over the past five years,the country faced serious challenges in sustaining the negativeconsequences of the world economic crisis and remains in needof investment in all sectors of industry, with many industrialplants unable to meet current consumer demand. UkraineThe Ukrainian financial sector has undergone substantial changes and improvements in thepast several years with an effective regulatory framework being progressively created anda modern financial system, based on market principles, steadily emerging. However, like inother economies, Ukrainian financial sector is experiencing the negative effects of theworld financial crisis. The National Bank of Ukraine and the government are implementing a number of measures in order to fight the negative consequences of the world financial crisis. SuchFinancial Sector measures, inter alia, include recapitalization of Ukrainian banks, limitation of the outflow of capital from Ukraine and facilitation of the performance of debt obligations by Ukrainian borrowers. Foreign Trade The core export categories including ferrous and non-ferrous metals and metal products; chemical products; fertilizers; plastics and rubber; agricultural products and foodstuffs; engineering goods; various types of machinery and equipment (including various types of transport vehicles); textiles; and a wide variety of raw materials.
  • 12. Ukraine Pharma Market Features. Retail + Hospital The lowest per capita medicine The Ukrainian retail Domestic consumption among CEE countries, pharmaceutical market Drugs price producers development of medical insurance is one of the fastest structure shifts traditionally and possible introduction of growing markets in to higher focus on reimbursement system evidence Europe, growth fueled segments high growth potential of the cheap mass by the increase in market after economy recovers products average price per pack Benefits of Market is dominated pioneering the by foreign companies market remain as The market is in value (USD) (75.3% no global or free of VAT in 2009) regional player has invested yet Financial crisis also resulted in significant Healthcare Total Market Increasing of decrease in capital Expenditures CAGR is more Healthcare expenditures, making CAGR is greenfield than 16% expenditures to 4.2% ~18.5% of GDP in 2010 development a viable alternativeSource: SMD [Sept 2010, EB], Roland Berger
  • 13. Ukraine Pharma Market Features. Retail + Hospital (cont) MARKET SHARE OF TOP-10 MARKET SHARE OF TOP-10 COMPANIES IN COMPANIES IN UKRAINE OTHER COUNTRIES [USD, 2009] More than 800 companies 59% operate in Ukraine ø ~54% 53% 51% Ukraine 33% 20% Major pressures for Ukrainian producers Source: SMD, Sept 2010, EB 1. Financial TOP-5 TOP-10 World USA UK • No access to cheap funds for operations and growth; • Liquidity problems trigger sales of assets 2. R&D• Fragmented nature of the Ukrainian pharmaceutical • In view of Ukraine’s accession to WTO, some manufacturersmarket allows an unimpeded entry will need to seriously redesign their portfolio as cheap copying of patented drugs becomes impossible in Ukraine 3. Technological• Although Ukraine represents a potentially major and • Introduction of GMP requirements (now postponed tilllucrative pharmaceutical market, most domestic 2011) will require an investment of 1 to 18 million USD permanufacturers are very small and focus on the production production lineof older drugs. Pharmaceutical manufacturing remains vulnerable to counterfeiting and low quality generic production. But this reluctance to enforce standards is counter- productive - the net result is that consumers often turn to branded generics made by foreign manufacturers with a reputation for quality and reliabilitySource: Datamonitor, IMS, Nomura, Roland Berger, SMD [Sept 2010, EB]
  • 14. Ukraine Pharma MarketKey Data. Retail + Hospital 2.9 2.7 2.3 1.9 • Market value - $2.7 bln 0.8 1.1 1.5 (public price level) Source: SMD, Sept 2010, EB 1.3 1.3 2003 2004 2005 2006 2007 2008 2009 1 HY 2009 1 HY 2010 2.1 2.0 1.4 1.7 1.2 • Average cost of a pack: $2.24 0.8 0.9 1.9 2.2 Source: SMD, Sept 2010, EB (public price level) 2003 2004 2005 2006 2007 2008 2009 1 HY 2009 1 HY 2010 62.0 58.5 49.4 40.1 32.4 • Annual consumption per capita 16.8 22.3 27.6 28.9 (USD, public price level) Source: SMD, Sept 2010, EB 2003 2004 2005 2006 2007 2008 2009 1 HY 2009 1 HY 2010 76.0% 75.7% 75.3% 74.1% • Foreign manufacturers’ market share 71.1% 73.8% 74.7% 68.5% (value: [USD], public price level) 66.2% Source: SMD, Sept 2010, EB 2003 2004 2005 2006 2007 2008 2009 1 HY 2009 1 HY 2010Source: SMD, Sept 2010, EB
  • 15. Total Pharma Market Dynamics & Structure Values: [USD] CAGR in 2004- Values, mln USD 2007 2008 2009 2009, USD [%] Drugs, Retail 1 762 2 199 2 055 16.7 Drugs, Hospital 239 324 245 9.1 Cosmetics & Personal Care Products 91 131 129 37.9 Biologically Active Nutrition & Self Medication 71 111 102 30.7 Patient Care Products 120 154 150 16 Total in Pharmacy Purchase Price 2 283 2 919 2 681 16.8 Total in Final Consumer Price 2 740 3 438 3 168 16.8 5.3 5.6 Patient Care products 100% 3.8 4.5 3.8 90% 4.8 11.1 9.1 Biologically active 80% Medicines make 85,8% in 2009. They lost nutritions & self 70% medication market share vs. 2008 of 86,4% due to 60% Cosmetics & personal better performance of other sectors 50% 75.3 care products 76.7 40% 30% The Ukrainian retail pharmaceutical market is Medicines Hospitals 20% one of the fastest growing markets in 10% Europe, growth fueled by the increase in 0% average price per pack Medicines Pharmacies 2008 Roland Berger Strategy Consultants 2009Source: SMD, Sept 2010, EB
  • 16. Ukrainian Total Pharma Market CAGR of Market Sub-Sectors in 2004-2009 Values: [USD] The best trends are in cosmetics 40% 37.9% and bioactive nutrition & self medications All market segments have 35% 30.7% more than +16% CAGR in USD 30% [Except Hospital segment with its +9%] 25% 20% 16.7% 16.0% 16.8% 15% 9.1% 10% 5% 0% Hospital segment has the worst Source: SMD, Sept 2010, EB Medicines Medicines Cosmetics & Biologically Patient Care Total Pharma dynamic due to problems with state Pharmacies Hospitals personal care active products Market financing. However, healthcare products nutritions & expenditures increasing to 4,2% of self medication GDP in 2010 would affect this segment positively Financial crisis also resulted in significant decrease in capital expenditures, making greenfield development a viable alternative Roland Berger Strategy ConsultantsSource: SMD, Sept 2010, EB
  • 17. Total Pharma Market Dynamics & Structure Values: [UNITS] CAGR in 2004- Values, mln UNITS 2007 2008 2009 2009, UNITS [%] Drugs, Retail 1 372 1 386 1 345 4.0 Drugs, Hospital 127 143 103 -3.1 Cosmetics & Personal Care Products 46 53 57 18.6 Biologically Active Nutrition & Self Medication 47 55 59 20.1 Patient Care Products 608 691 636 5.4 Total Pharma Market 2 200 2 328 2 200 3.7 Patient Care products 100% Cosmetics & Personal Care Products and 90% 29.7% Biologically Active Nutrition & Self 28.9% 80% 2.4% Biologically active nutritions Medication segments have good 2.7% 70% 2.3% 2.6% & self medication development indicators 60% 6.1% 4.7% 50% 40% Cosmetics & personal care Medicines volume grow stable year- products 30% 59.5% 61.1% over-year together with weighted 20% Medicines Hospitals average cost per pack raising and 10% medicines price range shifting to 0% higher segments 2008 Medicines Pharmacies 2009Source: SMD, Sept 2010, EB
  • 18. Ukrainian Total Pharma Market CAGR of Market Sub-Sectors in 2004-2009 Values: [UNITS] 25.0% Volumes of retail pharmacies’ 20.1% 20.0% 18.6% purchases in UNITS has stagnating trend due to reduction of low-cost old drugs 15.0% 10.0% 5.4% 5.0% 4.0% 3.7% Cosmetics & personal care 0.0% Source: SMD, Sept 2010, EB products together with Biologically active nutrition & self -5.0% -3.1% medication raise well both in Medicines Medicines Cosmetics & Biologically Patient Care Total Pharma USD and Units Pharmacies Hospitals personal care active products Market products nutritions & self medicationSource: SMD, Sept 2010, EB
  • 19. Original Medicines Development Period: [2003-2009] Values: [USD] 30% 24.5% Original 2007 2008 2009 CAGR, % 25% 20% 17.8% 14.8% UNITS, mln 33.3 37.3 33.3 10.4 15% 10.4% USD, mln 223.5 284.8 251.8 17.8 10% 5% UAH, mln 1 129.7 1 493.4 1 974.1 24.5 0% EURO, mln 162.8 195.2 181.1 14.8 UNITS USD UAH EURO Source: SMD, Sept 2010, EB Original Medicines. ATC 1 Level Development [USD] C Cardiovascular system Market Share, % CAGR, % USD [2009] [2003-2009] 24% G Genito-urinary system C Cardiovascular system 23.6 22.2 27% and sex hormones G Genito-urinary system and 13.3 17.2 A Alimentary tract and sex hormones 13% mtabolism A Alimentary tract and 12% 12.4 15.0 R Respiratory system metabolism 12% 12% R Respiratory system 12.2 21.4 J General anti-infectives J General anti-infectives 11.5 15.5 systemic systemic Others 26.9 16.2 Source: SMD, Sept 2010, EB OthersSource: SMD, Sept 2010, EB
  • 20. Original Medicines Development Period: [2003-2009] Values: [UNITS] 30% 24.5% Original 2007 2008 2009 CAGR, % 25% 20% 17.8% 14.8% UNITS, mln 33.3 37.3 33.3 10.4 15% 10.4% USD, mln 223.5 284.8 251.8 17.8 10% 5% UAH, mln 1 129.7 1 493.4 1 974.1 24.5 0% EURO, mln 162.8 195.2 181.1 14.8 UNITS USD UAH EURO Source: SMD, Sept 2010, EB Original Medicines. ATC 1 Level Development [UNITS] C Cardiovascular system Market Share, % CAGR, % 11% 10% UNITS [2009] [2003-2009] 24% R Respiratory system 12% C Cardiovascular system 27.5 9.1 S Sensory organs R Respiratory system 16.0 15.2 S Sensory organs 11.7 12.9 16% J General anti-infectives J General anti-infectives 27% systemic 10.7 14.3 systemic A Alimentary tract and A Alimentary tract and mtabolism 9.9 6.8 Others metabolism Source: SMD, Sept 2010, EB Others 24.1 8.2Source: SMD, Sept 2010, EB
  • 21. Original Medicines Development Forecast Period: [2010-2015] Values: [USD, mio]600 48.1% 60% The Market is to be grown by 488500 50% $0.5 bln during next 5 years 40% 29.6%400 27.4% 26.5% 30% 20.8% 20.7%300 252 20% 10.6% 9.6% 8.8% 8.1% 7.5% 10%200 0%100 80 -11.6% -10% Source: SMD, Sept 2010, EB 0 -20% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Original Medicines Rx [USD] Original Medicines Rx [USD; PPG, %] 70 40% 33.2% 59 2009-2015 60 24.2% 30% 20.2% CAGR ~10-12% in USD 50 20% 11.3% 12.0% 12.1% 40 33 8.3% 7.6% 7.1% 6.6% 6.2% 10% 30 0% 20 17 10 -10.8% -10% Source: SMD, Sept 2010, EB 0 -20% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Original Medicines Rx [UNITS] Original Medicines Rx [UNITS; PPG, %] Source: SMD, Sept 2010, EB
  • 22. Ukrainian Pharma Market Leading Originator Companies. Retail + Hospital [Rx] Values: [USD, UNITS]. Price level [TRADE] 9.9 9.8 USD, mln Market 8.1 8.1 8.7 PPG, % 7.3 2009 Share, % 6.2 9.8 10.1 Total Market 336.9 -9.4 100.0 Servier Group 46.3 -12.3 13.8 Sanofi-Aventis Group 45.6 -19.3 13.5 Source: SMD, Sept 2010, EB Glaxosmithkline 37.8 -12.0 11.2 Roche 25.6 235.4 7.6 2003 2004 2005 2006 2007 2008 2009 1 HY 1 HY Pfizer Incorporated 24.3 -20.6 7.2 2009 2010 Merck Sharp Dohme 22.6 6.6 6.7 Bayer Healthcare 21.2 -1.1 6.3 • Average cost of a pack: $10.1 Boehringer Ingelheim 18.0 -19.2 5.3 Novartis 15.5 -8.2 4.6 (public price level) Alcon 12.5 2.1 3.7 Others 67.5 -22.8 20.0 • TOP-5 Corporations control over UNITS , mln PPG, % Market 50% of market share in USD 2009 Share, % TOTAL MARKET 36.1 -12.0 100.0 Sanofi-Aventis Group 7.7 -17.6 21.4 Glaxosmithkline 6.7 0.5 18.5 Servier Group 5.5 -10.7 15.1 Alcon 2.4 -16.1 6.6 Novartis Bayer Healthcare 2.3 1.7 -10.8 -1.3 6.4 4.6 • TOP-10 Corporations control about Merck Sharp Dohme 1.6 -17.8 4.5 90% of market share in units Boehringer Ingelheim 1.6 -19.3 4.4 Astellas 1.5 -5.4 4.2 Pfizer Incorporated 1.3 -26.0 3.7 Other 4.0 -13.4 10.5Source: SMD, Sept 2010, EB
  • 23. Ukrainian Pharma Market Leading Generic Companies. Retail + Hospital. [Rx] Values: [USD, UNITS]. Price level [TRADE] USD, mln Market PPG, % 1.4 1.4 2009 Share, % 1.1 Total Market 980.5 -11.0 100.0 1.0 1.5 Menarini Group 57.7 -3.8 5.9 0.8 1.3 0.5 0.6 Arterium 48.4 -20.9 4.9 Darnitsa Pharma 46.2 -18.9 4.7 Source: SMD, Sept 2010, EB Nycomed 45.5 -1.1 4.6 Zdorovje Group 42.7 -2.1 4.4 2003 2004 2005 2006 2007 2008 2009 1 HY 1 HY Gedeon Richter 37.6 -10.3 3.8 2009 2010 KRKA 36.9 -13.0 3.8 Farmak JSC, Kiev 30.5 -0.7 3.1 • Average cost of a pack: $1.5 Yuria Ukr 24.9 3.8 2.5 TEVA 24.6 -5.7 2.5 (public price level) Other 585.5 -12.4 59.7 UNITS, mln Market • Low-priced domestic drugs PPG, % 2009 Share, % cover over 45% of local market in Total Market 494.6 -8.3 100.0 Zdorovje Group 57.3 -1.3 11.6 units Darnitsa Pharma 53.7 -13.4 10.9 Arterium 46.6 -4.9 9.4 Yuria Ukr 26.3 18.0 5.3 • Generic market is more Borschagovsky Chimfarm 24.1 0.4 4.9 Genom Biotech India 18.9 8.4 3.8 fragmented both in USD, and in Farmak JSC, Kiev Menarini Group 17.2 11.9 7.7 -5.1 3.5 2.4 units than Innovative one Gedeon Richter 9.2 -19.2 1.9 KRKA 8.8 -8.5 1.8 Other 220.5 -14.3 44.6Source: SMD, Sept 2010, EB
  • 24. Ukrainian Pharma Market Leading Companies. Retail + Hospital Values: [USD, UNITS]. Price level [TRADE] USD, mln Market PPG, % 76.0% 75.3% 75.7% 74.1% 2009 Share, % 73.8% 74.7% 71.1% Total Market 2 293.6 -9.4 100.0 68.5% Menarini Group 104.2 -7.3 4.5 66.2% Source: SMD, Sept 2010, EB Sanofi-Aventis Group 99.4 -15.6 4.3 2003 2004 2005 2006 2007 2008 2009 1 HY 20091 HY 2010 Novartis 86.6 -13.7 3.8 Farmak JSC, Kiev Darnitsa Pharma 77.4 69.0 4.7 -15.7 3.4 3.0 • Foreign manufacturers’ market share Servier Group 63.0 -13.7 2.7 (value: [USD], public price level) Arterium 62.0 -19.1 2.7 Bayer Healthcare 60.4 -11.2 2.6 Glaxosmithkline 60.1 -6.4 2.6 Nycomed 58.6 1.2 2.6 Other 1 553.1 -8.9 67.7 • TOP-10 Foreign companies control UNITS, mln Market over 30% of market in USD PPG, % 2009 Share, % Total Market 1 447.7 -5.3 100.0 Darnitsa Pharma 197.1 -2.0 13.6 Farmak JSC, Kiev. Zdorovje Group 103.0 93.4 -0.4 -1.0 7.1 6.5 • TOP-10 Local companies cover over Arterium 76.4 -5.1 5.3 45% of retail market in UNITS Borschagovsky Chimfarm 55.9 -5.1 3.9 Kiev Vitamin Factory 46.0 -1.9 3.2 Menarini Group 30.7 -13.8 2.1 Yuria Ukr 26.9 18.4 1.9 Zhitomir FF Ukr 25.0 19.4 1.7 Sanofi-Aventis Group 24.3 -10.3 1.7 Other 768.9 -8.1 53.1Source: SMD, Sept 2010, EB
  • 25. Ukrainian Pharma Market Leading OTC Companies. Values: [USD, UNITS]. Price level [TRADE] USD, mln PPG, % Market • OTC segment CAGR is more 2009 Share, % Total Market 957.9 -7.0 100.0 than 19% (2003-2009) in USD Novartis 50.1 -13.8 5.2 Farmak JSC, Kiev 46.2 9.1 4.8 Menarini Group 45.5 -10.4 4.7 Bayer Healthcare 38.2 -15.6 4.0 Sanofi-Aventis Group 37.5 -11.8 3.9 Omega Pharma Group 28.5 -0.9 3.0 • 9 of TOP-10 OTC companies are Interchem Ukr Darnitsa Pharma 22.6 22.3 48.3 -7.1 2.4 2.3 Ukrainian ones, covering more Bionorica 22.2 -0.4 2.3 than 45% of market in UNITS Glaxosmithkline 22.0 4.7 2.3 Other 622.9 -8.3 65.0 UNITS, mln Market PPG, % 2009 Share, % Total Market 903.7 -2.9 100.0 • Foreign companies are Darnitsa Pharma 142.1 3.4 15.7 Farmak JSC, Kiev. 84.5 -1.5 9.4 controlling 25% of market in Kiev Vitamin Factory 39.7 -0.3 4.4 money terms Zdorovje Group 35.2 -0.5 3.9 Borschagovsky Chimfarm 31.2 -9.0 3.5 Arterium 29.4 -4.4 3.3 Zhitomir FF Ukr 22.8 25.7 2.5 Ternopharm Ukr 21.9 7.8 2.4 Lektravi Zhitomir 21.0 6.6 2.3 Fitofarm Artemov 19.6 -0.8 2.2 Other 456.2 -6.7 50.5Source: SMD, Sept 2010, EB
  • 26. B. Forecasts
  • 27. Ukrainian Pharma Market Retail. Forecast for 2010-2012 Values: [USD, bln]. Price level [TRADE] • After the decline of 3.0 50% 44.2% the retail Pharma market bln in 2009 during crisis, we 40% 2.5 foresee stabilization in 2010 and growth in 30% Values from +5% to 2.0 22.5% 24.8% +11% in coming periods 23.1% 20% 1.5 11.0% 9.0% • We used currency 6.0% 10% exchange rate for USD 8, 1.0 based on a margin of 7,9 0% – 8,3 per $1 -6.8% 0.5 -10% Source: SMD, Sept 2010, EB 2004 2005 2006 2007 2008 2009 2010 (f) 2011 (f) 2012 (f) USD (ths) PPGSource: SMD, Sept 2010, EB
  • 28. Ukrainian Pharma Market Retail. Forecast for 2010-2012 Values: [UNITS] • The market was hit 1.5 14% bln hard by the crisis 1.4 11.5% 12% declining the pharma 10% 1.4 market in units during 8% 2009 fall till mid 2010 1.3 6% 4.2% 1.3 4% • The main trend was in 1.2 3.6% 2.2% 2% 1.0% shifting price segments 0% 1.2 to more expensive -1.0% -2% levels declining of old 1.1 -3.0% -4% domestic drugs 1.1 amounts in pharmacies -5.5% -6% purchases 1.0 Source: SMD, Sept 2010, EB -8% 2004 2005 2006 2007 2008 2009 2010 (f) 2011 (f) 2012 (f) Units (ths) Growth in UnitsSource: SMD, Sept 2010, EB
  • 29. Ukrainian Pharma Market Hospital. Forecast for 2010-2012 Values: [USD, mln]. Price level [TRADE] • Healthcare expenditures• Hospital segment 400 CAGR is ~18.5% [2006-2010] 50%development mainly 39.1% 37.1% 40%depends on governmental 34.2% 350healthcare expenditures 30%• Based on dynamic of its 300 20%development, we foresee 9.0% 10%stabilization of Hospital 11.8% 250 8.3% 8.3%market in 2010 with 0%further visible growth 200 -10% -20% 150 -30% -26.9% 100 Source: SMD, Sept 2010, EB -40% 2004 2005 2006 2007 2008 2009 2010 (f) 2011 (f) 2012 (f)Source: SMD, Sept 2010, EB
  • 30. SMD (Support in Market Development) - is a leading provider of market research, salesmanagement and forecasting services to the pharmaceutical industry.Researches of:· Pharmaceutics establishments purchase and sale audit· Hospital establishments purchase audit· Second distribution audit· Import medicine analyses Ukraine, 03680· Doctor prescription analyses Bojenko str., 86i, Kiev· Ad Hoc research tel/fax: +38 044 206 17 17 e-mail: office@smd.net.ua· Analytical services http://www.smd.net.ua Ukraine:in prospect September 2010

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