Ukraine Pharmaceutical Market Monthly - Upharmacia - Apr 2017

Macroeconomic Environment
Market & Companies News
Regulatory Updates
Healthcare News
UPHARMACIA
Ukrainian Pharmaceutical
Market Monthly
Issued by UPharma Consulting
UPharma Consulting is a professional consulting
company, operating in the Life Sciences sector. We
deliver best global practices in market knowledge, people
management, marketing and strategy for Pharma and
Healthcare in the CIS/CEE.
04'17issue

2
Upharmacia April 2017
www.upharma-c.com
CONTENTS
/ Macroeconomic Indicators
/ Economy & Pharma Dashboard
Page
/ Economic News
/ Pharma Market News
/ Regulatory Updates
/ Healthcare News
/ CIS Pharma
3
5
5
6
7
8
10
Section Data period
Mar 2016-Mar 2017
Mar 2016-Mar 2017
Apr 2017
Apr 2017
Apr 2017
Apr 2017
Apr 2017
Disclaimer:
These publications have been prepared by the research department of UPharma Consulting (“UPC”). It is
provided to our clients and industry stakeholders for information purposes only, and UPC makes no express or
implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose
or use with respect to any data included in this publication. UPC will not treat unauthorized recipients of this
report as its clients.
The information contained in this publication has been obtained from sources that UPC’s research group
believes to be reliable, but UPC does not represent or warrant that it is accurate or complete. UPC is not
responsible for, and makes no warranties whatsoever as to, the content of any thirdparty web site accessed via
a hyperlink in this publication and such information is not incorporated by reference.
All rights reserved. No part of this publication may be reproduced in any manner without the prior written
permission of UPC. UPharma Consulting LLC is registered in Ukraine, Kyiv, 04212, 21st M. Tymoshenka str.,
building 7, office 5. Additional information regarding this publication will be furnished upon request.

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INDICATORS
2016 2017
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
MACROECONOMIC INDICATORS
Q1 Q2 Q3 Q4 Q1
GDP ($ bn) 17.655 21.053 26.185 27.930
growth, % y-o-y 0.1% -0.02% 0.87% 9.16%
Export ($ bn) 2.99 3.10 2.88 2.93 2.92 3.18 3.16 3.24 3.62 3.63 3.03 3.20 4.11
growth, % y-o-y -13% 1% -2% -5% -7% 3% -6% 0% 16% 8% 48% 20% 37%
Import ($ bn) 3.35 3.05 2.69 2.87 3.09 3.45 3.48 3.54 3.81 4.13 3.10 3.67 4.37
growth, % y-o-y 5% 7% 2% 4% 4% -11% 8% 10% 24% 32% 32% 18% 35%
Industrial Prod. Sales ($ bn) 5.41 5.17 5.39 5.44 5.61 5.57 5.62 6.39 6.91 7.64 6.34 6.44 6.91
growth, % y-o-y -2% -12% -5% -6% -2% 3% -2% 2% 17% 20% 29% 31% 28%
Retail Turnover ($ bn) 1.64 1.76 1.59 1.73 1.87 1.92 1.76 1.87 2.04 2.09 1.40 1.37 1.62
growth, % y-o-y 2% 6% -18% -6% -3% 2% -5% -8% 14% 4% -12% -8% -2%
Unemployment Rate (%) 1.7 1.6 1.6 1.5 1.4 1.3 1.3 1.2 1.3 1.5 1.6 1.7 1.5
Average Salary ($) 187 191 198 214 217 208 204 208 210 247 221 230 250
CPI of Ukraine 120.9 109.8 107.5 106.9 107.9 108.4 107.6 112.4 112.1 112.4 112.6 114.2 115.1
GfK Consumer
Sentiment Index
50.6 49.1 50.3 52.7 50.1 53.7 50.1 51.6 47.4 57.1 53.7 56.2 55.5
OFFICIAL CURRENCY EXCHANGE RATE
UAH / USD 26.4 25.6 25.2 25.0 24.8 25.1 26.3 25.8 25.7 26.2 27.2 27.0 27.0
UAH / EUR 29.2 29.1 28.5 28.1 27.5 28.1 29.5 28.5 27.8 27.6 28.8 28.8 28.8
PHARMACEUTICAL INDUSTRY INDICATORS
Export of Pharma Products
($ mio)
15.54 13.90 14.17 16.15 13.36 13.58 18.81 18.40 14.75 23.95 8.10 13.31 22.01
growth, % y-o-y 16% 3% 9% 5% -4% 51% 37% 51% 26% 52% -3% 0% 42%
Import of Pharma Products
($ mio)
125.1 130.0 110.4 132.1 133.1 137.3 140.6 137.3 142.6 169.1 102.4 123.4 150.6
growth, % y-o-y 21% 25% 31% 15% 25% 47% 15% -7% 1% 19% -1% -15% 20%
Retail Sales, values ($, mio) 187.3 178.1 177.6 174.8 175.4 180.9 190.4 212.2 224.7 268.0 233.2 225.4 187.0
growth, % y-o-y -5% -1% -8% -2% 2% 2% -1% 3% 14% 26% 17% 28% 0%
Retail Sales, volumes
(mio units)
133.8 125.2 123.6 122.6 122.7 126.2 135.5 138.6 139.9 164.1 148.8 147.6 121.9
growth, % y-o-y -5% 2% -1% 4% 3% 3% 7% 6% 8% 20% 11% 16% -9%
Average Cost of Pack (USD) 1.40 1.42 1.44 1.43 1.43 1.43 1.41 1.53 1.61 1.63 1.57 1.53 1.53
growth, % y-o-y 13% 1% -2% -6% -3% -1% -8% -3% 6% 5% 5% 10% 9%
CPI, Pharma Products 113.5 108.4 107.3 108.2 107.4 107.2 107.9 107.6 107.4 106.4 105.4 104.2 103.2
Local Companies share,
values (%)
42.7 42.3 42.9 42.8 42.8 42.6 43.4 42.4 42.3 41.7 41.9 43.4 44.1
Local Companies share,
volumes (%)
76.5 76.7 77.2 77.4 77.9 77.6 76.5 75.1 74.9 73.9 74.5 75.7 76.8
MACROECONOMIC
INDICATORS

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ECONOMY & PHARMA
DASHBOARD
ECONOMIC NEWS
—— On Apr 6, European Parliament approved
granting visa-free to Ukrainian citizens by the
EU. The decision was supported by 521 European
deputies.
—— On Apr 3, the IMF approved USD 1.0 bn tranche
for Ukraine. The Acting Chair of IMF stated that
for sustainable growth, Ukraine needs to start
privatization and agricultural land market reform,
as well as decisively tackle corruption. Another
three tranches are planned in 2017.
—— National Bank of Ukraine forecasted inflation to
amount 9.1% in 2017, 6% in 2018 and 5% in 2019.
—— The Draft Budget of the USA for 2018, foresees
reduction in aid to Ukraine by 68.8% to USD 177
mio.
—— After meeting with US Commerce Secretary,
the Minister of Finance of Ukraine stated
that Trump’s administration is interested in
strengthening US business in Ukraine. The
government is developing the corresponding
proposals to discuss them at the highest level.
—— Ukraine’s PM insists on the necessity to develop
legislation on industrial and technological
parks in Ukraine.
187.3
178.1 177.6 174.8 175.4
180.9
190.4
212.2
224.7
264.9
233.2
225.4
187.0
133.8
125.2 123.6 122.6 122.7
126.2
135.5
138.6 139.9
164.1
148.8
147.6
121.9
100
120
140
160
180
80
120
160
200
240
280
Pharmaceutical Market Retail Sales
mio USD
mio units
2016 2017
15.5
13.9 14.2
16.1
13.4 13.6
18.8 18.4
14.8
23.9
8.1
13.3
22.0
125.1 130.0
110.4
132.1 133.1 137.3 140.6 137.4
142.6
169.1
102.4
123.4
150.6
0
30
60
90
120
150
180
0
5
10
15
20
25
30
Ukraine's International Trade
in Pharma Production
Export
Import
2016mio USD 2017
5.41
5.17
5.39 5.44 5.61 5.57 5.62
6.39
6.91
7.64
6.34 6.44
6.91
1.64
1.76
1.59
1.73
1.87 1.92
1.76
1.87
2.04
2.09
1.40 1.37
1.62
0.0
0.5
1.0
1.5
2.0
2.5
3.0
0
1
2
3
4
5
6
7
8
Industrial Production Sales &
Retail Turnover of Enterprises Surplus
2016bn USD 2017
26.4 25.6 25.2 25.0 24.8 25.1 26.3 25.8 25.7 26.2 27.2 27.0 27.0
29.2 29.1 28.5 28.1 27.5 28.1 29.5 28.5 27.8 27.6
28.8 28.8 28.8
120.9
109.8 107.5 106.9 107.9 108.4 107.9
112.4 112.1 112.4 112.6 114.2 115.1
0
20
40
60
80
100
120
140
160
0
10
20
30
40
50
UAH/USD
UAH/EUR
CPI
2016
Official Currency Exchange Rates
vs. Consumer Price Index
2017

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PHARMA MARKET NEWS
Russian Drugs
and Medical
Devices could
be Prohibited in
Ukraine
Acting Minister of Healthcare of
Ukraine Ulana Suprun declared
the intention to initiate the
prohibition of Russian drugs
and medical devices in Ukraine.
Mrs. Suprun stated that
currently the Ministry does
not approve registration or
reregistration of drugs, which
are produced or even packed
and imported from Russia,
as “there is a lot of questions
regarding the quality of Russian
medicines and medical devices”.
“The Ministry is developing
amendments to the Order of
the President of Ukraine to
include Russian drugs and
medical devices in the sanction
list,” Mrs. Suprun said. “This is a
political decision of the Ministry.
Ukr aine is at war with Russia.
It is wrong that we add to their
economy additional funds from
our state budget, buying drugs.”
Ukraine is the biggest importer
of Russian drugs. In 2016, Russia
supplied drugs in Ukraine
for RUB 2.1bn. According to
calculations of RNC Pharma,
Russian companies may lose
RUB 1.7bn in 2017, if Ukraine
impose sanctions on Russian
drugs.
Almost all Russian drugs
and medical devices have
substitutions on Ukrainian
market, so the prohibition
would not affect the patients
drastically, the acting Minister
considers. Russian imports in
Ukraine were failing over the
last years, while imports to the
occupied territories of Donetsk
and Lugansk regions are
increasing.
Pharmstandard
Sold 50%
Share in Boilek
Russian pharmaceutical
company Pharmstandard
decreased the share of
Ukrainian producer of
vaccines and immunobiologi-
cal preparations Biolek from
96.93% to 46.93%. The buyer of
shares is undisclosed.
Pharmstandard acquired 55%
share of Biolek in 2011 for USD
13.1 mio. In 2013, the share of
Russian company increased
to 97%. Pharmstandard is one
of the biggest pharmaceutical
companies in Russia with about
5.5 ths employees.
Biolek is among TOP-20
Ukrainian producers of
vaccines, infusion and injection
drugs. In 2015, the company’s
income amounted USD 5.9 mio.
Farmak
Launched
Gep-Art
Ukrainian pharmaceutical
company Farmak launched
the drug for the treatment of
liver Gep-Art (ademetionine).
The drug fills the shortage of
endogenous ademetionine and
stimulates its production in the
body. Gep-Art is indicated for
the treatment of intrahepatic
cholestasis in adults and
pregnant. The drug is sold only
by prescription.
Farmak retained first position
on Ukrainian retail drug market
in 1Q2017. Drugs for alimentary
tract and metabolism form
about 21% of the company’s
portfolio.
Acino Pharma
Start signed
Distribution
Agreement with French
Company
In Feb, Ukrainian company
Acino Pharma Start signed
agreement with French
company Laboratoires Gilbert
SAS on the right of commercial
sale of some OTC drugs in
Ukraine. From Apr 2017 to
2024, Pharma Start (part if
Swizz ACINO Group) will be
representing 3 trademarks of
Laboratoires Gilbert. These
trademarks are: Marimer®,
A-Cerumen Neo® and Liniderm.
First two trademarks were
earlier represented in Ukraine
by Takeda Ukraine.
Marimer® (seawater) is the
mean for daily hygiene of
the nasal cavity. A-Cerumen
Neo® possesses 60% of the
segment of hygiene products
for external ear canal. Liniderm
(almond oil/calcium hydroxide)
is used for to care for a baby’s

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Biofarma is to
invest USD
55 mio in
development and production
The President of Ukrainian
company Biofarma Konstantin
Efimenko stated that in the
next 5 years, the company
will invest USD 40 mio in
the construction of the new
workshop for the production of
blood preparations. Moreover,
USD 5 mio will be invested
in development of new
preparations. Biofarma also
plans to spend USD 10 mio in
the construction of stations for
skin under a diaper. The drug
is currently in the registration
process.
“Our company enters the new
segment – pediatrics, which we
see as prospective for further
development,” the Director of
Pharma Start stated. “In future,
we plan to expand our product
portfolio through cooperation
with Laboratoires Gilbert and
other companies”.
Acino-Pharma Start was 20th
company on the Ukrainian retail
drug market in 2016, climbing 2
positions vs 2015.
collecting blood plasma.
Implementation of the projects
will allow the company to cover
100% of Ukraine’s needs in
Coagulation factors VIII and IX.
The rest will be exported.
Biofarma is the only producer
of blood preparations in
the CIS, which produces
above 20 immunobiologi-
cal preparations from donor
blood. In 2016, the company
exported its production in
Belarus, Azerbaijan, Mongolia,
Kazakhstan and Vietnam.
Currently, the company plans
to enter the markets of
Philippines, Bolivia, Indonesia
and India.
REGULATORY UPDATES
The New Draft of the
Procedure for State Control
Over Quality of Medicinal
Products Imported to Ukraine
Proposed
On Mar 30, 2017, the State
Administration on Medicines
and Drugs Control of Ukraine
on its official website posted the
Draft Resolution of the Cabinet
of Ministers of Ukraine “On
Amendments to the Procedure
for State Control over Quality
of Medicinal Products Imported
to Ukraine” (hereinafter - the
“Draft”). The Draft proposed a
new wording of the Procedure
for State Control over Quality of
Medicinal Products Imported to
Ukraine approved by Resolution
of the Cabinet of Ministers
of Ukraine No. 902 as of Mar
14th, 2005 (hereafter – the
“Procedure”).
The following are significant
differences between the Draft
and still effective Procedure:
1. The Procedure will govern
relations in the area of state
quality control of medical im-
munobiological drugs used,
produced or offered for use in
medical practice in Ukraine.
2. The MOH was proposed
to decide on forms of
application for granting
conclusions on the quality of
a medicinal product imported
to Ukraine, as well as the list
of the imported medicinal
products.
3. The application for granting
a conclusion on the quality
of a medicinal product
imported to Ukraine should
be accompanied by copies
of the documents, certified
by the applicant, confirming
compliance with the
conditions of storage at all
stages of distribution from
a producer to an importer
(device print outs).
4. It provides for expansion
of the list of medicinal
products that should
undergo laboratory analysis.
In particular, in addition to a
series of medicinal products
imported into Ukraine for
the first time, vaccines,
toxoids, tuberculosis allergen,
tetanus toxoid and rabies
Provided by

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HEALTHCARE NEWS
according to estimates. The list
of medicines, which fall under
reimbursement, could also be
expanded.
International Clinical
Protocols will be used in
Ukraine
The MOH approved the Order,
which would allow Ukrainian
physicians using international
clinical protocols in providing
medical aid since May 2017.
However, additional time will
be needed to translate and
approve the protocols. The
acting Head of the MOH stated
that the Order would allow to
publicly procure more modern
and effective medicines. The
Order is permissive in nature, so
physicians will choose between
national and international
protocols.
The Deputy Head of the MOH
Olexandr Linchevskiy stated
that the use of international
protocols would stimulate
pharmaceutical companies
to register new medicines in
Ukraine. “If the producer sees,
that clinical protocol, which
foresees the use of a specific
preparation, works in Ukraine,
he will expand its portfolio,” Mr.
Linchevskiy said.
MOH and NABU will Fight
Corruption in Healthcare
On 28 Apr, the MOH signed
Memorandum on cooperation
with NABU (National Anti-
Corruption Bureau of Ukraine)
to form the basis of systematic
cooperation in fight against
corruption in the health sector.
“We want the civil society to
start making regular screenings
on the ground to prevent
corruption crimes,” the acting
Head of the MOH Ulana Suprun
The Reimbursement System was
Launched
On Apr 1, the governmental
program “Affordable drugs” was
officially launched in Ukraine.
The program allows patients to
receive certain drugs against
cardiovascular diseases, asthma
and diabetes for free or with
surcharge. According to Vice
Prime Minister of Ukraine, as
on Apr 20, 2700 pharmacies
throughout Ukraine joined the
program, while their number is
expected to grow. As on Apr 27,
about 48 ths people in Kyiv used
the program. The average cost
of the prescription amounted
UAH 40.
The PM of Ukraine said that the
government could increase the
funding of the program in 2017
by UAH 250 mio. Initially, UAH
500 mio were allocated for the
program in 2017, which is only
half of the minimum needed,
immunoglobulin will be
subjected to laboratory
analysis (in terms of quality to
ensure efficiency and safety).
5. In case the Draft is adopted,
the laboratory analysis will
also be conducted if for the
last 2 years circulation of
other series of medicinal
products was banned,
regardless of whether
they were removed from
circulation or not. Let us
remind you that under
the current Procedure
the reason enough for
laboratory analysis is a ban
on circulation of medicinal
products of other series
(regardless of the period or
the date of its introduction),
which were withdrawn from
circulation in due course.
6. It prescribed to cancel the
requirement to obtain a
conclusion on the same series
of medicinal products on the
following conditions: if series
of medicinal product were
imported as one batch for
various commercial entities,
are stored in one customs
warehouse, (if necessary)
with a positive laboratory test
results of quality of samples
taken from one of them.
In this case, it is proposed
to control such series of
medicinal product only
visually.

9
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stated.
The Head of the NABU said the
authority plans to create the
special unit detectives, which
will investigate criminal cases
related to healthcare.
According to the data of
Transparency International
Ukraine, medicine is one of
the most corrupted spheres
in Ukraine, as above 30% of
Ukrainians face corruption in
healthcare sector.
Insurance Fee within State
Medical Insurance is to Triple
in 4 Years
The MOH promulgated the draft
legislation acts to introduce
new standards of funding of
medical sphere. According to
the plan, the insurance fee
per one family within the state
solidary medical insurance is to
increase form UAH 4,583 in 2017
to UAH 13,948.
The calculations are based
on the projected volume of
healthcare expenditures at
the expense of state and local
budgets as well as private
payments of the population for
the period of implementation
of the reform (2017-2021). The
healthcare reform foresees
the transition to the purchase
of medical services through
the single national customer,
introduction of possible
co-payment for the services of
secondary and tertiary medical
care since.
The MOH projects that the new
funding model will allow to
decrease informal payments
for medical services form 51.5%
of all costs of the industry
currently to 24.2% in 2021. Is
also expected that the state
funding of the single national
customer of medical services
will increase from 2.1% of GDP
to 3.8% of GDP in 2017-2020.

10
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CIS REGION PHARMA
NEWS
Armenia
—— The Union of producers
and importers of drugs of
Armenia has prepared the Draft Codex of
good practice for pharmaceutical companies.
The document was created on the basis of
the Codex of the International Federation
of Pharmaceutical Manufactures and
Associations (IFPMA).
Azerbaijan
—— Investment company
Azersun Holding plans to possess
20-30% of the pharmaceutical market of
Azerbaijan, the CEO of the company stated.
Azersun Holding jointly with Azaerbaijani
Investment Company and Iranian Tamin
Pharmaceutical Investment Company is
constructing the pharmaceutical plant in
Pirallakhinsky industrial park.
Belarus
—— Indian company NATCO
Pharma Ltd will support the
development of the first in Belarus laboratory
of small chemical synthesis in Vitebsk.
The laboratory will serve as research and
development center competent in the
development and transfer of technologies for
the synthesis of expensive pharmaceutical
substances.
Kazakhstan
—— Kazakh pharmaceutical
company Abdi Ibrahim Global
Pharm (part of Turkish corporation Abdi
Ibrahim) started export of medicines for
the treatment of hepatitis and diabetes in
Russia
—— According to the survey
of the consulting group IPT, the
representatives of Russian pharmaceutical
market expect it to grow by 6-7% y-o-y in 2017
(in rubles), and by 9% y-o-y in 2018. In values,
the annual growth in these years is envisaged
at 4-6% y-o-y
—— Russian company Generium and International
biopharmaceutical company Shire have
created a joined company SG Biotech for the
sale of drugs for the treatment of hemophilia.
Currently, the company controls over 70% of
hemophilia segment of the hospital market
—— Russian subsidiary of Merck signed the
agreement with Kaluga pharmaceutical
cluster on the development of life sciences
technologies in Kaluga region
—— Japanese company Mitsui will buy 10% share
in R-Pharm for about USD 200 mio. The deal
is expected to be closed in Sep 2017. Further
expansion of the package is under discussion.
—— Within the large-scale investment program
Protec group of companies acquired 100% of
shares of Rafarma pharmaceutical industrial
complex
—— According to the data of pharmaceutical
company Nativa, in 2017, the market of
pulmonological drugs will worth more
than RUB 14bn. Three foreign companies
(AstraZeneca, GSK and Boehringer Ingelheim)
possess more than 83% of the market.
Azerbaijan and Georgia. The company plans
to considerably increase its exports in the CIS
countries in the following years.

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Ukraine Pharmaceutical Market Monthly - Upharmacia - Apr 2017

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Ukraine Pharmaceutical Market Monthly - Upharmacia - Apr 2017