Ukrainian Pharmaceutical Market Monthly - Upharmacia - December 2017

Macroeconomic Environment
Market & Companies News
Regulatory Updates
Healthcare News
UPHARMACIA
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.
12'17
ISSUE
Ukrainian Pharma Market Monthly

2
Upharmacia December 2017
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CONTENTS
/ Macroeconomic Indicators 11/2016-11/2017
/ Economy & Pharma Dashboard 11/2016-11/2017
Page
/ Economic News 12/2017
/ Pharma Market News 12/2017
/ Regulatory Updates 12/2017
/ Healthcare News 12/2017
/ CIS Pharma News 12/2017
3
5
5
6
7
8
9
Section Data period
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
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
MACROECONOMIC INDICATORS
Q4 Q1 Q2 Q3 Q4
GDP ($ bn) 27.930 21.577 24.826 31.704
growth, y-o-y 9.16% 22.2% 17.9% 21.1%
Export ($ bn) 3.62 3.63 3.03 3.20 4.11 3.34 3.48 3.35 3.21 3.67 3.77 3.86 4.30
growth, y-o-y 16% 8% 48% 20% 37% 8% 21% 14% 10% 15% 19% 19% 19%
Import ($ bn) 3.81 4.13 3.10 3.67 4.37 3.73 3.83 3.96 4.01 4.25 4.32 4.58 4.74
growth, y-o-y 24% 32% 32% 18% 35% 22% 27% 47% 30% 23% 25% 28% 24%
Industrial Prod. Sales ($ bn) 6.91 7.64 6.34 6.44 6.91 5.92 6.25 6.27 6.31 6.62 6.66 7.24 7.69
growth, y-o-y 17% 20% 28% 30% 27% 14% 16% 16% 12% 19% 19% 13% 11%
Retail Turnover ($ bn) 2.04 2.09 1.40 1.37 1.62 1.66 1.93 1.78 1.96 2.09 1.93 1.98 1.99
growth, y-o-y 14% 4% -12% -8% -2% -6% 21% 3% 4% 9% 10% 6% -3%
Unemployment Rate (%) 1.3 1.5 1.6 1.7 1.5 1.4 1.3 1.3 1.2 1.2 1.2 1.1 1.2
Average Salary ($) 210 247 221 230 250 248 259 272 283 278 257 277 276
CPI (Consumer Prices Index) 112.1 112.4 112.6 114.2 115.1 112.2 113.5 115.6 115.9 116.2 116.4 114.6 113.6
GfK Consumer Sentiment Index 47.4 57.1 53.7 56.2 55.5 54.9 58.0 59.4 58.5 58.2 59.0 62.6 62.3
OFFICIAL CURRENCY EXCHANGE RATE
UAH / USD 25.7 26.2 27.2 27.0 27.0 26.9 26.4 26.1 26.0 25.6 26.1 26.7 26.7
UAH / EUR 27.8 27.6 28.8 28.8 28.8 28.8 29.2 29.3 29.8 30.2 31.1 31.4 31.3
PHARMACEUTICAL INDUSTRY INDICATORS
Export of Pharma Products $M 14.75 23.95 8.10 13.31 22.01 12.22 14.21 19.75 14.15 13.06 16.7 14.5 20.1
growth, y-o-y 26% 52% -3% 0% 42% -12% 0% 22% 6% -4% -11% -21% 36%
Import of Pharma Products $M 142.6 169.1 102.4 123.4 150.6 116.8 145.7 156.8 150.5 149.8 146.6 146.3 176.4
growth, y-o-y 1% 19% -1% -15% 20% -10% 32% 19% 13% 9% 4% 7% 24%
Retail Sales, values $M 224.7 268.0 233.2 225.4 187.0 210.5 217.5 206.5 211.4 212.7 236.5 249.7 266.2
growth, y-o-y 14% 26% 17% 28% 0% 18% 22% 18% 21% 18% 24% 18% 18%
Retail Sales, volumes units M 139.9 164.1 148.8 147.6 121.9 133.9 137.3 132.0 139.5 134.3 146.7 146.1 151.6
growth, y-o-y 8% 20% 11% 16% -9% 7% 11% 8% 14% 6% 8% 5% 8%
Average Cost of a Pack $ 1.61 1.63 1.57 1.53 1.53 1.57 1.58 1.56 1.52 1.58 1.61 1.71 1.76
growth, y-o-y 6% 5% 5% 10% 9% 10% 10% 10% 6% 10% 15% 12% 9%
CPI, Pharma Products 107.4 106.4 105.4 104.2 103.2 102.8 103.0 103.2 103.9 104.1 103.9 104.5 105.1
Local Companies Share % values 42.3 41.7 41.9 42.7 43.0 42.7 42.9 43.0 43.7 42.7 43.1 42.8 43.0
Local Companies Share % volumes 74.9 73.9 74.5 75.2 75.7 75.6 76.0 76.2 77.0 76.8 75.4 74.4 74.5
MACROECONOMIC
INDICATORS

WARNING
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TALENTS
PIPELINE
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TALENTS / LEADERS / SEASONED PROFESSIONALS
FOR MIDDLE &
SENIOR ROLES IN
PHARMA COMPANIES
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• SALES & MARKETING • FINANCES
• REGULATORY & MEDICAL AFFAIRS
• PHARMACOECONOMICS
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224.7
264.9
233.2
225.4
187.0
210.5
217.5
206.5
211.4 212.7
236.5
249.7
266.2
139.9
164.1
148.8 147.6
121.9
133.9
137.3
132.0
139.5
134.3
146.7 146.1
151.6
90
110
130
150
170
80
120
160
200
240
280
Volumes(units,mio)
Values(USD,mio)
Values, mio USD Volumes, mio units
2016 2017
PHARMACEUTICAL MARKET, RETAIL SALES
14.8
23.9
8.1 13.3
22.0
12.2
14.2
19.8
14.2
13.1
16.7
14.5
20.1
142.6
169.1
102.4
123.4
150.6
116.8
145.7
156.8 150.5
149.8 146.6 146.3
176.4
0
30
60
90
120
150
180
0
5
10
15
20
25
30
Import(USD,mio)
Export(USD,mio)
Export Import
2016 2017
UKRAINE'S INTERNATIONAL TRADE IN PHARMA PRODUCTION
6.91
7.60
6.34 6.44
6.91
5.92
6.25 6.27 6.31
6.62 6.66
7.24
7.69
2.04 2.09
1.40 1.37
1.62 1.66
1.93
1.78
1.96
2.09
1.93 1.98 1.99
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
0
1
2
3
4
5
6
7
8
9
10
RetailTurnoverofEnterprises(USD,Bn)
IndustrialProductionSales(USD,Bn)
Industrial Production Sales
Retail Turnover of Enterprises
2016 2017
INDUSTRIAL PRODUCTION & RETAILS SALES
25.7
26.2
27.2 27.0 27.0 26.9 26.4 26.1 26.0 25.6 26.1 26.7 26.7
27.8
27.6
28.8 28.8 28.8 28.8 29.2 29.26 29.8 30.2 31.1 31.4 31.3
112.1 112.4 112.6 114.2 115.1
112.2 113.5 115.6 115.9 116.2 116.4 114.6 113.6
0
20
40
60
80
100
120
0
10
20
30
40
50
ConsumerPriceIndex
Exchangerates
UAH/USD UAH/EUR CPI
2016 2017
OFFICIAL CURRENCY EXCHANGE RATES VS CPI
ECONOMY & PHARMA
DASHBOARD
ECONOMIC NEWS
—— Ukraine’s State Budget 2018 envisages the deficit
at the level of UAH 81.8 bn (2.5% of GDP), inflation
of 9%, the GDP growth forecast is 3.0% y-o-y. The
exchange rate is expected to be USD/UAH 29.3
at the year’s end. The document also provided
increase of the minimal salary from UAH 3,200 to
UAH 3,723.
—— Ukraine’s gross foreign debt grew 2.1% in 3Q2017
to USD 117.4 bn (111.4% of GDP).
—— Ukrainian Parliament extended the moratorium on
the sale of agricultural lands until 2019.
—— Ukraine is undermining anti-corruption efforts by
disrupting high-level corruption investigations of
the National Anti-Corruption Bureau (NABU), the
US State Department said. US government also
anticipates the creation of the anticorruption court
in the nearest time.
—— Prime Ministers of Ukraine and China reached a
number of agreements on joint projects for the
total amount of near USD 7 bn.
—— Ukraine’s treasury residuals increased 11%
m-o-m in Nov to UAH 54.1 bn.
—— The acting Head of the National Bank of Ukraine
stated the Bank expects the next IMF tranche
in 2Q2018. Total investment from the IMF are
anticipated at the level of USD 3-3.5 bn.

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Farmak Expects
Increase of Retail
Sales by 18% in
2018
Ukraine’s leading pharmaceutical
company Farmak expects the sales
of its drugs to rise by 18% y-o-y
in UAH in 2018, the company’s
Marketing Director Susanna
Halilova stated. Herewith, the
forecast on sales in volumes is
unclear.
Farmak anticipates the medical
reform to have impact on
pharmaceutical market with regard
to the changes in the sales structure
of certain groups of drugs.
According to the forecast of
Business Credit analytical company,
the retail sales of Ukrainian drugs
may increase 4% in volumes and
10% in values.
Yuria-Pharm
may Supply
TB Drugs to
Brazil
Ukrainian company Yuria-Pharm
considers the possibility to supply
its antitubercular drugs to Brazil,
the company’s Director Dmytro
Derkach said. Currently, the
company is waiting for the results
of the inspection conducted by the
Brazilian regulatory body (ANVISA)
in Nov.
“Brazil is interested in Yuria-Pharm’s
production, in particular, in its
antitubercular drugs,” Mr. Derkach
stated.
In 2018, Yuria-Pharm plans
to continue implementing
production of new drugs and
PHARMA MARKET NEWS
entering new external markets.
Now, the company’s products are
represented in 25 countries.
In 9M2017, Yuria-Pharm was a #1
supplier on the Ukrainian hospital
drug market with 10% market
share. On the retail drug market,
the company held 10th position.
Biofarma to Open
a Blood Plasma
Fractionation
Plant in 2018
Ukrainian producer of blood
preparations Biofarma plans to
launch a blood plasma fractionation
plant in Jul 2018. The plant’s
construction will cost USD 35 mio.
Its capacity is to amount 500 tons of
blood plasma.
“We have an ambition to become
a TOP-7 producer of blood plasma
in the world”, Biofarma’s President
Konstantin Efimenko stated.
Biofarma produces more than 20
immunobiological preparations
from donor blood obtained
according to technology of
recombinant DNA and probiotics. In
2014, the company constructed its
new plant in Bila Tserkva, investing
about USD 42 mio.
Interchem
Launched new
API Production
Complex
Ukrainian company Interchem
launched a new production
complex for the production of
Active Pharmaceutical Ingredients
(API) at its plant in Odessa.
Completion of the complex
construction has become the last
phase within an investment project
worth EUR 50 mio, which had been
started in 2012. About EUR 9 mio
were invested in the construction of
the complex.
Interchem also implemented a
new drug labeling system used to
automatically track the movement
of drugs from the manufacturer to
the end user or patient. The system
uses two-dimensional codes of
the GS1 ECC200 standard and was
developed with recommendations
of the European Federation of
Pharmaceutical Industries and
associations (EFPIA).
“Counterfeit drugs are a serious
problem in Ukraine”, the Director
of Interchem Anatoliy Reder said.
“As a single company in Ukraine,
which implemented such system,
Interchem participates in the pilot
project of the State Service on Drug
Control, aimed to addressing the
problem through tracking the drugs
turnover.”
Interchem is a full-cycle enterprise,
which produces above 100 forms
of drugs. In 2016, Interchem was a
25th company on Ukrainian drug
market by sales in values. In Dec,
the company celebrated its 25th
anniversary.
Indian Companies
Plan to Increase
Exports to Ukraine
to USD 300 mio in
2018
Indian Pharmaceutical
Manufacturers Association (IPMA)
stated that in 2016 exports to

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pharmaceuticals from India to
Ukraine amounted USD 134 mio,
making 28% of the total Indian
exports to Ukraine. Members of
the IPMA expects the exports to
increase to USD 300 mio in 2018.
India is the third world’s producer
of pharmaceuticals in volumes and
14th in values. Indian companies
REGULATORY UPDATES
Provided by7% VAT on Transactions with
All Medical Products
On Dec 7, Ukrainian Parliament
adopted the Draft Law No. 6776-
D dated Nov 14, 2017, which
provided amendments to the Tax
Code of Ukraine. According to the
new norms, since Jan 1, 2018, VAT
rate of 7% will apply to supplies of
goods in the customs territory of
Ukraine and the importation into
the customs territory of Ukraine of
all medical products not included
in the state register of medical
equipment and medical devices, or
those that meet the requirements
of the relevant technical
regulations, which is confirmed by
the compliance document, and are
allowed for placing on the market
and / or putting into operation and
use in Ukraine.
It should be noted that today 7%
VAT rate applies exclusively to
the operations of supplying in the
customs territory of Ukraine and
the importation into the customs
territory of Ukraine of medical
products based on the list approved
by the Cabinet of Ministers of
Ukraine. 20% VAT is levied on
supply in the customs territory of
Ukraine and the import into the
customs territory of Ukraine of
medical products not included in
this list.
In addition, 7% VAT rate remains
for supply operations in the
customs territory of Ukraine
and the import into the customs
territory of Ukraine of medicines,
medical products and / or medical
equipment authorized for use for
clinical trials, the permission for
which is provided by the respective
ministry.
The List of Direction for
Public Procurement of Drugs
Expanded
The Cabinet of Ministers
promulgated the Resolution
No. 975, which expanded the
list of directions, under which
International organizations conduct
delegated procurement of drugs for
Ukraine.
The list included state programs
for the procurement of drugs for
the treatment of viral hepatitis B
and C, the therapy of adult patients
with cystic fibrosis, patients with
tuberculosis, the procurement of
tests and supplies for diagnosis of
tuberculosis as well medical devices
for patients with idiopathic family
dystonia.
Thereby, the specialized
International organizations will
conduct procurement of drugs and
medical devices for Ukraine under
39 directions.
Read more regulatory news on Legal
Alliance website
export products for more than
USD 10 bn. The leading Indian
companies such as Sun Pharma,
Dr. Reddy's, Aurobindo, Stride and
Hatro are presented on Ukrainian
pharmaceutical market.

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HEALTHCARE NEWS
UAH 115 bn to be Allocated on
Healthcare in 2018
In Dec, Ukrainian Parliament
approved the State Budget for
2018. About UAH 115 bn will be
provided on healthcare vs UAH
88.7 bn in 2017. Herewith, the
regular healthcare expenses will
amount UAH 86 bn. The MOH
plans to spend additional UAH 14
bn on reformation of the primary
medical care. UAH 1 bn will be
allocated for the “Affordable drugs”
reimbursement program.
On Dec 27, the government
included Losartan (cardiovascular
diseases) and glibenclamide (type 2
diabetes) in the “Affordable drugs”
reimbursement list. The MOH plans
to further expand the program in
future through adding more INNs
and nosologies.
National Health Service to be
Launched in Jun 2018
On Dec 27, the Cabinet of Ministers
of Ukraine approved the Regulation
on the National Health Service of
Ukraine (NHSU). The NHSU is to
become a national insurer, which
will enter into contracts with health
care institutions and will purchase
health care services for citizens
from them. Herewith, the Service
will not own funds, which are
allocated from the State Budget for
payment of medical services for the
population, as money are kept on
Treasury accounts.
The launch of the NHSU is
scheduled for the end of Jun 2018.
By that time medical institutions
of primary care will have to
reorganize themselves from the
budget institutions into utility
non-profit enterprises and then
to reach contracts with the NHSU.
The institutions, which do not pass
all needed procedures, will be
funded at the expense of a medical
subvention as before. The contracts
with the NHSU also could be
reached in Oct and Dec 2018.
The MoH Defined the Priorities
for 2018
Deputy Head of the MoH Pavlo
Kovtonyuk listed the 5 key priorities
of the Ministry for 2018:
—— changing the system of financing
services at the primary level of
health care delivery;
—— expansion of the drugs
reimbursement program
“Affordable drugs”;
—— combating cardiovascular
diseases by developing a
network of cardiographic
centers;
—— development of the Law to
regulate the licensing of medical
activities;
—— reformation of the Ministry of
Health itself.
The Prime Minister of Ukraine called
the implementation of medical
reform among the key priorities of
the government in 2018. On 28 Dec,
the President of Ukraine signed the
Laws needed to start the medical
reform in Ukraine.
Pilot Project on Cadaveric
Transplantation to be Launched
in 2018
The MoH is taking measures to
launch the system of cadaveric
transplantation in pilot regime in 5
regions of Ukraine and Kyiv since
January 2018, the Deputy Head
of the MoH Olexandr Linchevsky
stated. The transplantation in
Ukraine is not regulated as the
corresponding Draft Law has
not been adopted yet, but the
Ministry strives to allow kidney
transplantation from an unrelated
donor even before the adoption of
the new Law.
The State Budget 2018 envisages
the allocation of UAH 112 mio on
such project. Its launch will demand
the adoption of by-laws concerning
the work of transplant coordinators
and preparation of registries of
donors and recipients.
Moreover, in July 2018 the Ministry
plans expand the “Affordable
drugs” reimbursement program
with drugs used in the pre- and
postoperative period for organ
and tissue transplantation. The list
of reimbursable drugs to include
azathioprine, mycophenolic acid
and its salts, tacrolimus and
cyclosporine.

9
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Armenia
—— Tufenkji Group and Bio-Chem
companies received national GMP
certificates. Tufenkji Group plans to enter external
markets in 2018. Currently, 5 of 19 producers in
Armenia are GPM-certified.
Azerbaijan
—— Belarus plans to build a
pharmaceutical plant in Azerbaijan
to produce antitumor drugs oriented on the third
countries.
Belarus
—— Deputy PM of Belarus stated that
Belarus and Uzbekistan plan to
create a joint enterprise on drugs manufacturing in
Uzbekistan.
Kazakhstan
—— Karaganda Pharmaceutical Complex,
Hikma CIS and Eleas companies plan
to establish production of 19 names of insulins to
supply them within public tenders.
—— Kazakh Parliament postponed introduction of
compulsory medical insurance from 2018 to 2020.
—— The government of Astana signed memorandums
and contracts with companies worth KZT 100
bn. Each of them intends to establish own
manufacturing of drugs and medical devises in the
Astana pharmaceutical cluster.
Russia
—— Within the integration into the
business of Sun Pharma, Biosintez
company will construct the new production site for
manufacturing of solid drug forms in 2Q2018. The
capacity of the new site will be about 1.7bln tablets.
—— In next 3 years, AstraZeneca plans to localize 10
drugs in Russia within the special investment
contracts. 6 of them do not have analogues in
Russia.
—— According to IMS Health data, in 9M2017, Protek
company leaded the rating of pharmaceutical
distributors by direct sales of drugs with 18% market
share. It was followed by Katren (16.9%) and Puls
(13.6%).
—— Russian Parliament postponed the introduction of
compulsory labeling of drugs from 2019 to 2020.
—— Pharmasyntez company will invest RUB 3.5bln in the
production of 30 types of hormonal preparations
at its facilities in Tyumen region. The company
will become the only local manufacturer of such
products in Russia.
CIS PHARMA NEWS

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