Experts explain why cheap medicines have disappeared from Russian pharmacies

In three years, the number of drugs costing up to one hundred rubles has almost halved

A product of forced demand, as many experts call medicines, is becoming less accessible in Russia. Over the past year alone, according to market analysts DSM Group, the range of drugs offered in Russian pharmacies has decreased by 11%. At the same time, the niche of cheap medicines, which today includes drugs costing up to 100 rubles, has suffered the most – there are fewer of them by a quarter!

According to an analytical review by DSM Group, over the past year the drug range of Russian pharmacies decreased from 21.6 thousand items to 19.4 thousand. At the same time, the reduction most affected the cheapest and, therefore, the most popular segment of the market – drugs costing up to one hundred rubles per package. Their number decreased from 5.7 thousand to 4.6 thousand items or 24%. They are very popular among the population: in 2023, every third medicine in pharmacies was classified as cheap.

The trend of reducing the number of cheap drugs is quite old – for example, in 2020, the range of drugs costing up to 100 rubles, according to the same review, amounted to 8.8 thousand items. Therefore, if we count over three years, then their number has almost doubled.

Director of the SRO Association of Independent Pharmacies, head of the Alliance of Pharmaceutical Associations Victoria Presnyakova says that the number of cheap drugs is constantly being reduced. For example, if in 2022 our pharmacies offered more than 3 thousand types of medicines at a price of up to 50 rubles, then in 2022 there were only 2.4 thousand types of such drugs left. “One of the reasons for this reduction is the transfer of drugs to other groups. For example, the manufacturer changes the packaging or release form. Or the logistics leverage increases and delivery becomes more expensive – all this is reflected in the final cost of the product. Another reason is that the production of a cheap drug becomes unprofitable. At the same time, according to the law, we can change the price of a drug that is included in the List of Vital and Essential Drugs (VED) no more than once a year and no more than the official inflation rate. At the same time, the rise in logistics costs in recent years and constant fluctuations in exchange rates have affected the cost of production in such a way that the production price has increased several times. Tariffs for housing and communal services, labor costs, substances, logistics, etc. are rising. In addition, global economic processes also lead to rising prices for medicines. The Russian pharmaceutical industry purchases substances and intermediates abroad, and the equipment at the factories is imported. All this affects the cost of manufactured products. We all understand that there are laws of economics – and a manufacturer cannot work at a loss. Therefore, if it is not possible to compensate for lost profits by increasing the price of other products (for example, drugs that are not included in the list of vital and essential drugs), their production is simply stopped. Manufacturers have been talking about this problem for many years now. It was proposed to solve it at the state level, but the necessary measures were never taken,” says Victoria Presnyakova.

At the same time, the expert notes that in recent years the tastes of both the medical and patient communities have changed greatly: for example, people have become more in demand for larger packaging (containing more tablets) – it is more profitable to both produce and sell. In addition, people choose more modern medicines with older active ingredients, but they are also more expensive. The most popular drugs in pharmacies today cost in the range of 150-500 rubles. “For example, twenty years ago the most popular drugs in Russia were analgin, citramon, activated carbon, acetylsalicylic acid, amlocardine, glycerin plus boric acid, veronakrap and others. Nowadays such trade names are very rarely remembered; some of them simply left the market. This niche has been occupied by more effective and high-quality new medicinal products. Updated drugs are also coming to the market (for example, there were tablets, and now capsules). We must also take into account the fact that today almost all drugs are produced in secondary packaging (that is, not just blisters, but blisters in a box), and they are marked with a mandatory Date Matrix code, which increases their cost.”

However, Nikolai Bespalov, development director of the analytical company RNC Pharma, does not see such a massive exodus of drugs from pharmacies: “Perhaps the reason is some peculiarities of calculations that demonstrate such colossal changes in the assortment. If this were the case, they would be physically noticeable. According to our data, in 2023, about 4,735 brands of medicines were put into circulation on the Russian market as a whole (this is exactly 100 more than in 2022). If we count by product items (SKU – that is, a specific trademark of a specific manufacturer in a specific dosage), then in 2023 15,043 units came into circulation (535 items more than in 2022). The expansion of the assortment in 2023 occurred solely due to the activity of domestic companies (and foreign ones localized in our country); the assortment of net imports decreased over the year by 55 SKU, which is about 40 brands. In general, completely targeted changes are taking place in the market. As for the reduction of cheap assortment, this is an old trend – such drugs are not interesting to any of the participants in the supply chain. Although in this segment there are drugs with high profitability. For example, nasal drops and sprays cost pennies to produce, but are sold for tens of rubles, and the margins are crazy.”

And yet, experts emphasize that the trend of reducing the cheap range of drugs will continue in the near future.