The Russian public health system is provided with drugs for various categories of patients for a period of several months to a year, follows from public procurement data processed by the Headway Company. This will allow medical institutions to avoid their shortage due to difficulties in delivering imports to Russia, but in the future, the cost of purchasing both imported and domestic drugs will inevitably increase due to the devaluation of the ruble against major world currencies. The situation is similar in the segment of medical retail.
Russian healthcare has stocks of drugs for various categories of patients for a period of several months to a year, according to government procurement statistics analyzed for Kommersant Headway Company. In January-February of this year, the Federal Center for Planning and Organization of Drug Supply of the Ministry of Health has already managed to conclude contracts for the supply of most of the drugs under the program “14 high-cost nosologies” (14 VZN) – out of 66.9 billion rubles. RUB 62 billion contracted The next category of subsidized drugs in terms of government spending – for HIV and hepatitis B and C – also looks prosperous, 21 billion rubles were spent on them in the first months. This is a large part of the annual expenses.
The Ministry of Health reported to Kommersant that “the need for drugs for privileged categories of citizens is contracted on average by 85% in directions.”
This gives the government and pharmaceutical companies time to solve the problems with the logistics of finished dosage forms and pharmaceutical substances that have arisen against the backdrop of Western sanctions — market participants assess the risk of non-execution of already concluded contracts as low due to distributors having stocks of drugs for several months.
“The beginning of the year is the standard time for auctions for orphan drugs, HIV and hepatitis drugs, and therefore patients who take them are the least likely to encounter any problems,” says Headway Company analyst Lyudmila Balandina.
At the same time, the stock of drugs for which regional drug benefits apply (in the hospital segment, the ministries of health of the constituent entities of the Russian Federation and state medical institutions purchase them as needed) may turn out to be small – “about 15% of their annual budget” is contracted for them, the analyst notes.
As Nikolai Bespalov, RNC Pharma Development Director, explained to Kommersant, most of the finished drugs are imported into the Russian Federation from Western countries by land transport – only 8-10% of imports are interrupted due to the military operation in Ukraine. “Now manufacturers are trying to find a replacement for those carriers who, for various reasons, no longer want to work with Russian customers. In general, there are alternatives, and after some time the situation will normalize,” says Viktor Dmitriev, head of the Association of Russian Pharmaceutical Manufacturers. His words to “Kommersant” were confirmed by two distributors from the top 5 in the Russian market, calling the delays they had in deliveries “insignificant”. Pharmaceutical substances, says Nikolai Bespalov, are also mainly delivered to the Russian Federation by land transport and mainly from China and India – their logistics were not disturbed.
At the same time, Nikolai Bespalov notes, the cost of logistics and the drugs themselves will increase due to the devaluation of the ruble – prices will increase both in the state segment and in retail. In turn, Andrey Telyatnikov, deputy general director for commercial work at GDP, notes that a number of companies in the distribution market may experience financial difficulties due to rising prices for logistics services, and this may lead to their bankruptcy and greater monopolization of the industry. “On the other hand, there are about 2,000 companies in the Russian Federation that provide such services, while the whole of Europe is served by only four,” he says. The vast majority of drugs in the state order are included in the Vital and Essential Drugs list, and their price is regulated by the state – the government has already submitted amendments to the State Duma (see Kommersant of February 3), which will allow the FAS to re-register their prices due to changes in the value of the ruble. “Without this, their production in the current conditions will become unprofitable,” says Viktor Dmitriev.
According to Nikolai Bespalov, in the commercial segment, the increase in prices may reach 15-20% and occur within a few weeks.
The head of DSM Group Sergey Shulyak agrees with this assessment, but believes that prices will change much more slowly. “As a result of the depreciation of the ruble in 2014, drug prices continued to rise for almost two years,” he says. Another risk factor, Nikolai Bespalov notes, is the rush demand from the population – and a number of Russian pharmacies have already encountered it. Thus, Kommersant was informed about the “increased” demand in the Union of Professional Pharmaceutical Organizations, although they emphasized that shipments to pharmacies are carried out as planned.