Belarus Pharmaceuticals and Healthcare Report Q4 2009

Belarus Pharmaceuticals and Healthcare Report Q4 2009

A brief recession and the devaluation of the local currency have demonstrated that Belarus has not been
able to escape the global economic crisis, although sheer lack of integration into the global financial
system has done much to blunt its impact. According to BMI, the country’s pharmaceutical sector is
forecast to deliver a five-year compound annual growth rate (CAGR) of 6.47% through to 2013 in US
dollar terms (10.75% in local currency terms), with total market value in final consumer prices set to
reach US$869mn. At the same time, the market will not see US dollar growth return until 2011, when the
market is expected to resume its previous double-digit growth.
Relations with Russia remain central to overall strength of the Belarusian economy. After a damaging
trade row in July, President Alexander Lukashenko has been eager to push for the implementation of the
Customs Union between the two countries from January 2010, with Kazakhstan also committed to join.
In terms of competitiveness, the devaluation of the Belarusian ruble helps domestic companies match
production costs in Russian and Kazakhstan. In addition, producers and companies in all three regions
face similar increases in active pharmaceutical ingredient (API) costs, as much of these are imported from
China and denominated in dollars. The union is meant to also negotiate as a bloc for the three countries to
enter the WTO, although membership for Belarus appears extremely unlikely in the near term.
The market remains under the influence of the pricing freeze agreed between producers and the
government in June. The move followed the 25% fall in the value of the ruble against the euro in late
2008/early 2009. Companies are now required to obtain permission from the Ministry of Public Health
before raising prices, while wholesalers and retailers have to apply minimal mark-ups. Still, BMI sees
real prices continuing to move upwards as wholesalers and retailers seek to survive in difficult economic
conditions.
Local producers must calculate how to balance the short-term impact of the recession with the threats and
opportunities offered by the Customs Union if it becomes reality in a few months, which is by no means
certain. Big producers such as Bebliopharm’s sales match the pace of market growth in recent years,
large Russian producers in particular will be challenging many of their core product lines – although even
with a Customs Union, few believe that the Belarusian government will remove non-tariff discrimination.
Thorny issues with Russia remain. In particular, the government has resisted applying rules giving
Russian pharmaceutical firms equal access to state tenders. In July, the government introduced new rules
aimed to introduce preferential treatment for domestic producers, reversing liberalising measures
introduced in April. Despite government rhetoric, liberalisation within the Customs Unit and integration
within the broader global pharmaceutical market look a long way off.

Executive Summary ....5
SWOT Analysis............6
Belarus Pharmaceuticals And Healthcare Industry SWOT.... 6
Belarus Political SWOT..... 7
Belarus Economic SWOT... 8
Belarus Business Environment SWOT .. 9
Pharmaceutical Business Environment Ratings ........10
Table: Central And Eastern Europe Pharmaceutical Business Environment Ratings For Q409 ....... 10
Limits To Potential Returns ........... 11
Risks To Realisation Of Returns .... 11
Market Summary .......12
Regulatory Regime....14
Counterfeit Drugs ............ 15
Intellectual Property Rights ........... 15
Pricing And Reimbursement .......... 16
Industry Developments..18
Epidemiology 18
Table: Disease Burden In Central And Eastern Europe, DALYs Lost Per 100,000 Population......... 19
Healthcare Sector ............ 20
Industry Forecast Scenario ..........22
Overall Market Forecast.. 22
Table: Belarus Drug Market Expenditure, 2004-2013.... 23
Key Growth Factors – Industry...... 24
Table: Belarus Health Expenditure, 2004-2013 25
Key Growth Factors – Macroeconomic ............ 26
Table: Belarus Economic Activity, 2006 – 2013 ............. 28
Prescription Drug Market Forecast.... 29
Table: Belarus Prescription Drug Market, 2004-2013 (BYRmn unless otherwise stated) ... 30
Table: Top 10 ATC Level 2 Codes In Belarus By Pharmacy Sales, 2007-2008 31
Table: Top 10 ATC Level 2 Codes In Belarus By Hospital Sales, 2007-2008... 31
Patented Drug Market Forecast .... 32
Table: Belarus Patented Drug Market, 2004-2013......... 33
Generic Drug Market Forecast...... 34
Table: Belarus’s Generic Drug Market, 2004-2013 ....... 35
OTC Drug Market Forecast........... 36
Table: Belarus OTC Market, 2004-2013 (BYR mn unless otherwise stated)..... 37
Pharmaceutical Export/Import Forecast .......... 38
Table: Belarus Pharmaceutical Trade Balance, 2004-2013 (US$mn) 39
Other Healthcare Data Forecasts.. 40
Table: Belarus Other Health Indicators, 2004-2013....... 40
Key Risks to BMI’s Forecasts ........ 40
Competitive Landscape.42
Table: The Top 10 Drugmakers In Belarus In 2008 By Pharmacy Sales .......... 43
Table: The Top 10 Drugmakers In Belarus In 2008 By Hospital Sales............. 43
Table: The Top 10 Trade Names In Belarus By Pharmacy Sales, 2008............ 44
Domestic Drugmakers ..... 44
Foreign Drugmakers........ 45
Pharmaceutical Wholesale And Retail 46
Research And Development ........... 46
Company Profiles......48
Belbiopharm . 48
Lekpharm...... 52
Country Snapshot: Belarus Demographic Data..........53
Section 1: Population....... 53
Table: Demographic Indicators, 2005-2030..... 53
Table: Rural/Urban Breakdown, 2005-2030 .... 54
Section 2: Education And Healthcare. 54
Table: Education, 2000-2005 ........ 54
Table: Vital Statistics, 2005-2030.. 54
Section 3: Labour Market And Spending Power ............. 55
Table: Employment Indicators, 2001-2006....... 55
Table: Consumer Expenditure, 2000-2012 (US$) ........... 55
Table: Average Annual Wages, 2005-2009....... 56
Methodology57
How We Generate Our Pharmaceutical Industry Forecasts 57
Pharmaceutical Business Environment Ratings Methodology ............ 58
Ratings Overview............. 58
Table: Pharmaceutical Business Environment Indicators ... 59
Weighting...... 60
Table: Weighting Of Components.. 60
Sources ......... 60