ukrainian pharmaceutical market

Ukraine:in prospect September 2010

Definitions

ATC 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-pharmaceuticals

Big Pharma the top twenty pharmaceutical companies and their two trade groups, Pharmaceutical Research and Manufacturers of America (PhRMA) and Biotechnology Industry Organization

CIS 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 Uzbekistan

Consumption final purchase of goods and services by individuals/consumers

Generic company company that produces and/or sells generics

Generic 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-protected

GMP Good Manufacturing Practice, a part of a quality system covering the manufacture and testing of active pharmaceutical ingredients, diagnostics, foods, pharmaceutical products, and medical devices

Originator company a corporation which holds the patent for the active ingredient of the product

Original drug a novel drug that was under patent protection when launched onto the market for the first time

Public 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 (PPP)

price which is used to sell the product from a distributor/wholesaler to a pharmacy (pharmacy purchase price)

A. CIS Region B. Ukraine Pharma Market C. Forecasts

A. CIS Region

CIS Region Abstract

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 It is more comparable to the Commonwealth of Nations. Although the CIS has few supranational powers, it is more than a purely symbolic organization, possessing coordinating powers in the realm of trade, finance, lawmaking, and security

Russian Federation

Belarus

Ukraine

Armenia Azerbaijan

Kazakhstan Kyrgyzstan

Moldova

Turkmenistan Tajikistan

Uzbekistan

Georgia

The International Monetary Fund (IMF) has raised forecasts for economic growth in CIS countries in 2010 up to 4,3 percent

"World Economic Outlook"

• Total GDP is ~ $1.6 trillion (est. 2009) • GDP Growth Rate = 4.3% (IMF Forecast) • Population is ~276 mln people (est. July 2009)

Source: Eurostat, IMF, CIS Statistic Committee, SMD

Although the original drugs market in CIS will develop at a slower rate than that of generic drugs between 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.

CIS Pharmaceutical Market Executive Summary

The global financial crisis left its footprint on the CIS Pharma market however the impact is dependant on the level of each country's 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.

A number of consolidation processes recently took place in the generic arena, which were of great importance for the CIS region. For example, Israel’s Teva gained a strong presence in the region through the acquisition of Barr in July 2008, which included one of the largest local generic drug producers - the Croatian company Pliva.

The pharmaceutical market in CIS region is dominated by generic drugs. Market structure and key players are different from those in western markets.

Rx vs. OTC ratio is almost 50/50. OTC segment traditionally is more developed than in western markets

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.

Source: SMD, Sept 2010, EB

CIS Pharma Market Features

• 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 countries


CIS Pharma Market Dynamics

Population, mln people CIS

Pharma Market Values (USD),

mln Y2009

145,5 Russia* (incl. DLO, hospital)

17 500

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 4,4 Moldova 179 3,7 Armenia* 112 4,5 Kyrgyzstan** 110

4,4 Turkmenistan** 100 5,7 Tajikistan** 100

277,1 Total 23 018 Source: SMD, *Pharmexpert, **SMD estimation

Russia* (incl. DLO, hospital) ;

74.81%

Ukraine; 11.41%

Kazakhstan ; 4.17%

Belarus ; 2,79%

Uzbekistan*; 2.22%

Azerbaijan ; 1,03%

Georgia; 1.00%

Moldova; 0.77%

Armenia*; 0.48% Kyrgyzstan**; 0.47%

Turkmenistan**; 0.43%

Tajikistan**; 0.43%

The pharmaceutical market is driven by factors such as ageing population, increasing demand for imported and expensive medicines, and increasing disposable incomes

CIS emerging Pharma Market (only medicines) made $23 bln in 2009 at TRADE price level, which is equal to $28 bln in PUBLIC price level

Growth Rate approx. [-5%] in USD in 2009 (TRADE price level), compare to growth in 2008 of +20% in USD as an impact of the crisis


B. Ukraine Pharma Market

Ukraine Country Profile

Ukraine

Russia

Ukraine is the largest country in Europe in terms of territory. It covers a territory of 603,7 thousand square kilometers. (France is the second largest country on the continent with a territory of 544 thousand square kilometers).

In terms of population Ukraine is one of the largest in Europe. Ukraine has a population of ≈46 million people. It is one of the biggest consumer markets in Europe. Population density is about 77 people per sq. kilometer. Approximately 77.8% of the population are ethnic Ukrainians and 17.3% ethnic Russians. The remaining 4.9% of the population includes ethnic Poles, Jews, Bulgarians, Tatars, Hungarians, Romanians, Greeks, and other nationalities Ukraine surrounded in the east by the

Russian Federation, in the north by Belarus, in the west by Poland, Slovakia and Hungary, in the south west by Moldova and Romania, and in the south Ukraine by the Black Sea. Location

Population

Territory

Whilst Ukraine was hit hard by the economic crisis, the economy is expected to recover in 2010. The market is driven by strong import growth; imports rose by a CAGR of 34.0% over 2004-2008. Import growth is expected to remain strong due to a lack of locally manufactured innovative products. The pharmaceutical market will grow more rapidly if the government will manage to implement an effective health insurance system, which has been under discussion for several years

Trends

Ukraine has bilateral relationships with many countries all over the world. Despite getting its independence only less than 20 years ago (August 24, 1991), it is emerging as a major player in trade and industry in Eastern Europe. Its pharmaceutical industry is in need of help at the moment and this makes it a good time for foreign pharmaceutical companies to step in.

Trends

The pharmaceutical industry is a fast growing sector of the national economy. As one of the largest markets in Europe there exist greater tendencies for large financial turnovers. Today Ukraine is one of the biggest consumer markets in Europe. There are national pharmaceutical factories that produce medicines for local consumption. However, the production doesn’t match market requirements.

Such products must be imported from foreign manufacturers to supplement the local market needs. However, before importation, foreign medical products must be registered with the State Health Ministry. The latest statistics confirmed that the actual annual supply of essential imported medical products is far less than the demand.

Pharma


Ukraine Economic Outlook

Ukraine

Ukraine benefits from a consumer market of approximately 46.01 million people, and enjoys an opportune geographical location, a mild climate, a rich natural resource base, a highly educated labor force, a well-developed transport infrastructure, and a well-developed tradition of scientific research and development. Despite the fact that Ukraine has experienced steady economic growth over the past five years, the country faced serious challenges in sustaining the negative consequences of the world economic crisis and remains in need of investment in all sectors of industry, with many industrial plants unable to meet current consumer demand.

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.

Foreign Trade

The Ukrainian financial sector has undergone substantial changes and improvements in the past several years with an effective regulatory framework being progressively created and a modern financial system, based on market principles, steadily emerging. However, like in other economies, Ukrainian financial sector is experiencing the negative effects of the world 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. Such 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.

Financial Sector

Ukraine Pharma Market Features. Retail + Hospital

Financial crisis also resulted in significant decrease in capital expenditures, making greenfield development a viable alternative

Domestic producers

traditionally focus on

cheap mass products

The lowest per capita medicine consumption among CEE countries, development of medical insurance and possible introduction of reimbursement system evidence high growth potential of the market after economy recovers

Drugs price structure shifts

to higher segments

Benefits of pioneering the

market remain as no global or

regional player has invested yet

Market is dominated by foreign companies in value (USD) (75.3%

in 2009)

The market is

free of VAT

Total Market CAGR is more

than 16%

Healthcare Expenditures

CAGR is ~18.5%

The Ukrainian retail pharmaceutical market is one of the fastest growing markets in Europe, growth fueled

by the increase in average price per pack

Increasing of Healthcare expenditures to 4.2% of GDP in 2010

Source: SMD [Sept 2010, EB], Roland Berger

Ukraine Pharma Market Features. Retail + Hospital (cont)

Major pressures for Ukrainian producers

• Fragmented nature of the Ukrainian pharmaceutical market allows an unimpeded entry

• Although Ukraine represents a potentially major and lucrative pharmaceutical market, most domestic manufacturers are very small and focus on the production of older drugs.

1. Financial

• No access to cheap funds for operations and growth;

• Liquidity problems trigger sales of assets

2. R&D

• In view of Ukraine’s accession to WTO, some manufacturers will need to seriously redesign their portfolio as cheap copying of patented drugs becomes impossible in Ukraine

3. Technological

• Introduction of GMP requirements (now postponed till 2011) will require an investment of 1 to 18 million USD per production line

51%

59%

53%

World USA UK

20%

33%

TOP-5 TOP-10

MARKET SHARE OF TOP-10 COMPANIES IN UKRAINE [USD, 2009]

MARKET SHARE OF TOP-10 COMPANIES IN OTHER COUNTRIES

More than 800 companies operate in Ukraine ø ~54%

Source: Datamonitor, IMS, Nomura, Roland Berger, SMD [Sept 2010, EB]

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 reliability

Ukraine


Ukraine Pharma Market Key Data. Retail + Hospital

1.3 1.3

0.8 1.1 1.5

1.9 2.3

2.9 2.7

2003 2004 2005 2006 2007 2008 2009 1 HY 2009 1 HY 2010

• Market value - $2.7 bln (public price level)

1.9 2.2 0.8 0.9

1.2 1.4 1.7 2.1 2.0

2003 2004 2005 2006 2007 2008 2009 1 HY 2009 1 HY 2010

• Average cost of a pack: $2.24 (public price level)

• Annual consumption per capita (USD, public price level) 27.6 28.9

16.8 22.3 32.4

40.1 49.4

62.0 58.5

2003 2004 2005 2006 2007 2008 2009 1 HY 2009 1 HY 2010


75.7% 74.1%

66.2% 68.5%

71.1% 73.8% 74.7% 76.0% 75.3%

2003 2004 2005 2006 2007 2008 2009 1 HY 2009 1 HY 2010

• Foreign manufacturers’ market share (value: [USD], public price level)





Total Pharma Market Dynamics & Structure Values: [USD]

Values, mln USD 2007 2008 2009 CAGR in 2004-2009, 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

0%10%20%

30%

40%

50%

60%

70%

80%

90%

100%

20082009

75.3 76.7

11.1 9.1

4.5 4.8

3.8 3.8

5.3 5.6 Patient Care products

Biologically activenutritions & selfmedication

Cosmetics & personalcare products

Medicines Hospitals

Medicines Pharmacies

The Ukrainian retail pharmaceutical market is one of the fastest growing markets in Europe, growth fueled by the increase in average price per pack

Roland Berger Strategy Consultants

Medicines make 85,8% in 2009. They lost market share vs. 2008 of 86,4% due to better performance of other sectors


Ukrainian Total Pharma Market CAGR of Market Sub-Sectors in 2004-2009 Values: [USD]

The best trends are in cosmetics and bioactive nutrition & self medications

16.7%

9.1%

37.9%

30.7%

16.0% 16.8%

0%

5%

10%

15%

20%

25%

30%

35%

40%

MedicinesPharmacies

MedicinesHospitals

Cosmetics &personal care

products

Biologicallyactive

nutritions &self medication

Patient Careproducts

Total PharmaMarket

All market segments have more than +16% CAGR in USD [Except Hospital segment with its +9%]

Hospital segment has the worst dynamic due to problems with state financing. However, healthcare expenditures increasing to 4,2% of 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 Consultants



Values, mln UNITS 2007 2008 2009 CAGR in 2004-

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

Total Pharma Market Dynamics & Structure Values: [UNITS]

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

20082009

59.5% 61.1%

6.1% 4.7%

2.3% 2.6%

2.4% 2.7%

29.7% 28.9%

Patient Care products

Biologically active nutritions& self medication

Cosmetics & personal careproducts

Medicines Hospitals

Medicines Pharmacies

Cosmetics & Personal Care Products and Biologically Active Nutrition & Self Medication segments have good development indicators

Medicines volume grow stable year-over-year together with weighted average cost per pack raising and medicines' price range shifting to higher segments


Ukrainian Total Pharma Market CAGR of Market Sub-Sectors in 2004-2009 Values: [UNITS]

Cosmetics & personal care products together with Biologically active nutrition & self medication raise well both in USD and Units

Volumes of retail pharmacies’ purchases in UNITS has stagnating trend due to reduction of low-cost old drugs



4.0%

-3.1%

18.6% 20.1%

5.4% 3.7%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

MedicinesPharmacies

MedicinesHospitals

Cosmetics &personal care

products

Biologicallyactive

nutritions & selfmedication

Patient Careproducts

Total PharmaMarket

USD Market Share, %

[2009] CAGR, %

[2003-2009]

C Cardiovascular system 23.6 22.2

G Genito-urinary system and sex hormones

13.3 17.2

A Alimentary tract and metabolism

12.4 15.0

R Respiratory system 12.2 21.4

J General anti-infectives systemic

11.5 15.5

Others 26.9 16.2

24%

13%

12% 12%

12%

27%

C Cardiovascular system

G Genito-urinary systemand sex hormones

A Alimentary tract andmtabolism

R Respiratory system

J General anti-infectivessystemic

Others

Original Medicines Development Period: [2003-2009] Values: [USD]

Original Medicines. ATC 1 Level Development [USD]

Original 2007 2008 2009 CAGR, %

UNITS, mln 33.3 37.3 33.3 10.4

USD, mln 223.5 284.8 251.8 17.8

UAH, mln 1 129.7 1 493.4 1 974.1 24.5

EURO, mln 162.8 195.2 181.1 14.8

10.4%

17.8%

24.5%

14.8%

0%

5%

10%

15%

20%

25%

30%

UNITS USD UAH EURO




Original 2007 2008 2009 CAGR, %

UNITS, mln 33.3 37.3 33.3 10.4

USD, mln 223.5 284.8 251.8 17.8

UAH, mln 1 129.7 1 493.4 1 974.1 24.5

EURO, mln 162.8 195.2 181.1 14.8

10.4%

17.8%

24.5%

14.8%

0%

5%

10%

15%

20%

25%

30%

UNITS USD UAH EURO

Original Medicines Development Period: [2003-2009] Values: [UNITS]

UNITS Market Share, %

[2009] CAGR, %

[2003-2009]

C Cardiovascular system 27.5 9.1

R Respiratory system 16.0 15.2

S Sensory organs 11.7 12.9

J General anti-infectives systemic

10.7 14.3

A Alimentary tract and metabolism

9.9 6.8

Others 24.1 8.2

27%

16%

12%

11% 10%

24%

C Cardiovascular system

R Respiratory system

S Sensory organs

J General anti-infectivessystemic

A Alimentary tract andmtabolism

Others




Original Medicines. ATC 1 Level Development [UNITS]

Original Medicines Development Forecast Period: [2010-2015] Values: [USD, mio]


The Market is to be grown by $0.5 bln during next 5 years

2009-2015 CAGR ~10-12% in USD

80

252

488

29.6%

48.1%

20.7% 20.8%

27.4%

-11.6%

26.5%

10.6% 9.6% 8.8% 8.1% 7.5%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

0

100

200

300

400

500

600

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Original Medicines Rx [USD] Original Medicines Rx [USD; PPG, %]

17

33

59

11.3%

33.2%

20.2%

12.0% 12.1%

-10.8%

24.2%

8.3% 7.6% 7.1% 6.6% 6.2%

-20%

-10%

0%

10%

20%

30%

40%

0

10

20

30

40

50

60

70

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Original Medicines Rx [UNITS] Original Medicines Rx [UNITS; PPG, %]



USD, mln 2009

PPG, % Market

Share, % 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

Glaxosmithkline 37.8 -12.0 11.2

Roche 25.6 235.4 7.6

Pfizer Incorporated 24.3 -20.6 7.2

Merck Sharp Dohme 22.6 6.6 6.7

Bayer Healthcare 21.2 -1.1 6.3

Boehringer Ingelheim 18.0 -19.2 5.3

Novartis 15.5 -8.2 4.6

Alcon 12.5 2.1 3.7

Others 67.5 -22.8 20.0

• TOP-10 Corporations control about 90% of market share in units

Ukrainian Pharma Market Leading Originator Companies. Retail + Hospital [Rx] Values: [USD, UNITS]. Price level [TRADE]

UNITS , mln 2009

PPG, % Market

Share, % TOTAL MARKET 36.1 -12.0 100.0


Glaxosmithkline 6.7 0.5 18.5


Alcon 2.4 -16.1 6.6

Novartis 2.3 -10.8 6.4


Merck Sharp Dohme 1.6 -17.8 4.5

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 10.5


9.8 10.1 6.2 7.3

8.1 8.1 8.7 9.9 9.8

2003 2004 2005 2006 2007 2008 2009 1 HY2009

1 HY2010


• TOP-5 Corporations control over 50% of market share in USD


Ukrainian Pharma Market Leading Generic Companies. Retail + Hospital. [Rx] Values: [USD, UNITS]. Price level [TRADE]

USD, mln 2009

PPG, % Market


Menarini Group 57.7 -3.8 5.9

Arterium 48.4 -20.9 4.9

Darnitsa Pharma 46.2 -18.9 4.7

Nycomed 45.5 -1.1 4.6

Zdorovje Group 42.7 -2.1 4.4

Gedeon Richter 37.6 -10.3 3.8

KRKA 36.9 -13.0 3.8

Farmak JSC, Kiev 30.5 -0.7 3.1

Yuria Ukr 24.9 3.8 2.5

TEVA 24.6 -5.7 2.5

Other 585.5 -12.4 59.7

UNITS, mln 2009

PPG, % Market

Share, % Total Market 494.6 -8.3 100.0 Zdorovje Group 57.3 -1.3 11.6 Darnitsa Pharma 53.7 -13.4 10.9 Arterium 46.6 -4.9 9.4 Yuria Ukr 26.3 18.0 5.3 Borschagovsky Chimfarm 24.1 0.4 4.9 Genom Biotech India 18.9 8.4 3.8 Farmak JSC, Kiev 17.2 7.7 3.5 Menarini Group 11.9 -5.1 2.4 Gedeon Richter 9.2 -19.2 1.9 KRKA 8.8 -8.5 1.8 Other 220.5 -14.3 44.6

1.3 1.5

0.5 0.6 0.8

1.0 1.1

1.4 1.4

2003 2004 2005 2006 2007 2008 2009 1 HY2009

1 HY2010


• Low-priced domestic drugs cover over 45% of local market in units


• Generic market is more fragmented both in USD, and in units than Innovative one


USD, mln 2009

PPG, % Market

Share, % Total Market 2 293.6 -9.4 100.0 Menarini Group 104.2 -7.3 4.5


Novartis 86.6 -13.7 3.8

Farmak JSC, Kiev 77.4 4.7 3.4



Arterium 62.0 -19.1 2.7


Glaxosmithkline 60.1 -6.4 2.6

Nycomed 58.6 1.2 2.6

Other 1 553.1 -8.9 67.7

Ukrainian Pharma Market Leading Companies. Retail + Hospital Values: [USD, UNITS]. Price level [TRADE]

UNITS, mln 2009

PPG, % Market

Share, % Total Market 1 447.7 -5.3 100.0


Farmak JSC, Kiev. 103.0 -0.4 7.1


Arterium 76.4 -5.1 5.3

Borschagovsky Chimfarm 55.9 -5.1 3.9

Kiev Vitamin Factory 46.0 -1.9 3.2


Yuria Ukr 26.9 18.4 1.9

Zhitomir FF Ukr 25.0 19.4 1.7


Other 768.9 -8.1 53.1


• TOP-10 Foreign companies control over 30% of market in USD

75.7% 74.1%

66.2% 68.5%

71.1% 73.8% 74.7% 76.0% 75.3%

2003 2004 2005 2006 2007 2008 2009 1 HY 20091 HY 2010

• Foreign manufacturers’ market share (value: [USD], public price level)

• TOP-10 Local companies cover over 45% of retail market in UNITS


USD, mln 2009

PPG, % Market


Novartis 50.1 -13.8 5.2

Farmak JSC, Kiev 46.2 9.1 4.8




Omega Pharma Group 28.5 -0.9 3.0

Interchem Ukr 22.6 48.3 2.4


Bionorica 22.2 -0.4 2.3

Glaxosmithkline 22.0 4.7 2.3

Other 622.9 -8.3 65.0

UNITS, mln 2009

PPG, % Market


Darnitsa Pharma 142.1 3.4 15.7

Farmak JSC, Kiev. 84.5 -1.5 9.4

Kiev Vitamin Factory 39.7 -0.3 4.4


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 50.5

Ukrainian Pharma Market Leading OTC Companies. Values: [USD, UNITS]. Price level [TRADE]

• OTC segment CAGR is more than 19% (2003-2009) in USD

• 9 of TOP-10 OTC companies are Ukrainian ones, covering more than 45% of market in UNITS

• Foreign companies are controlling 25% of market in money terms


B. Forecasts

• After the decline of the retail Pharma market in 2009 during crisis, we foresee stabilization in 2010 and growth in Values from +5% to +11% in coming periods

• We used currency exchange rate for USD 8, based on a margin of 7,9 – 8,3 per $1

Ukrainian Pharma Market Retail. Forecast for 2010-2012 Values: [USD, bln]. Price level [TRADE]

44.2%

23.1% 22.5%

24.8%

-6.8%

9.0%

6.0%

11.0%

-10%

0%

10%

20%

30%

40%

50%

0.5

1.0

1.5

2.0

2.5

3.0

2004 2005 2006 2007 2008 2009 2010 (f) 2011 (f) 2012 (f)

bln

USD (ths) PPG



Ukrainian Pharma Market Retail. Forecast for 2010-2012 Values: [UNITS]

• The market was hit hard by the crisis declining the pharma market in units during 2009 fall till mid 2010

• The main trend was in shifting price segments to more expensive levels declining of old domestic drugs amounts in pharmacies purchases

11.5%

3.6%

4.2%

1.0%

-3.0%

-5.5%

-1.0%

2.2%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

1.0

1.1

1.1

1.2

1.2

1.3

1.3

1.4

1.4

1.5

2004 2005 2006 2007 2008 2009 2010 (f) 2011 (f) 2012 (f)

bln

Units (ths) Growth in Units



• Hospital segment development mainly depends on governmental healthcare expenditures • Based on dynamic of its development, we foresee stabilization of Hospital market in 2010 with further visible growth

11.8%

37.1%

8.3%

39.1%

-26.9%

34.2%

9.0%

8.3%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

100

150

200

250

300

350

400

2004 2005 2006 2007 2008 2009 2010 (f) 2011 (f) 2012 (f)

Ukrainian Pharma Market Hospital. Forecast for 2010-2012 Values: [USD, mln]. Price level [TRADE]

• Healthcare expenditures CAGR is ~18.5% [2006-2010]



Ukraine:in prospect September 2010

SMD (Support in Market Development) - is a leading provider of market research, sales management 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 · Doctor prescription analyses · Ad Hoc research · Analytical services

Ukraine, 03680 Bojenko str., 86i, Kiev

tel/fax: +38 044 206 17 17 e-mail: [email protected]

http://www.smd.net.ua

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