sales of the top ten distributors decreased by 11.2% year-on-year

The end of the pandemic and the period of rush demand resulted in a decrease in sales of the largest pharmaceutical distributors. State programs remained a growth point for the players, in particular, for the purchase of orphan and cardiovascular drugs. Despite the pessimistic beginning of the year, analysts expect an increase in the pharmaceutical market turnover by the end of 2023 due to the possible stabilization of household incomes and the desire of consumers to switch to more expensive drugs.

The total sales of the top ten pharmaceutical distributors for the first quarter of 2023 decreased by 11.2% year-on-year, IQVIA calculated. Analysts do not disclose sales in monetary terms, but explain that these players account for 69.7% of the total market. According to DSM Group estimates, the total market volume in the first quarter amounted to RUB 663 billion, down 12% yoy. AlphaRM notes a decrease by 6%, to 559 billion rubles.

DSM Group CEO Sergey Shulyak names one of the main factors for the overall decline in the pharmaceutical market turnover in monetary terms in January-March this year, the record figures of last year. Then growth was ensured by both the rush demand in March and the ongoing fight against COVID-19, the expert explains.

But the dynamics of the largest distributors is diverse. The drop leader, according to IQVIA, in the first quarter was R-Pharm, whose gross sales decreased by 43.7% year-on-year. The company did not promptly answer Kommersant’s questions. Mr. Shulyak suggests that the company’s sales may have declined because it previously supplied drugs for COVID-19 in large volumes. At the same time, gross sales increased at Pharmimex (by 40.3% yoy) and Irvine (by 22.6%). “Irvin” in the first quarter increased the volume of won auctions for public procurement of medicines, explains the company’s CEO Mikhail Stepanov. According to him, the distributor will continue to focus on supplies under federal programs to combat cardiovascular diseases, oncology, and orphan drugs.

Irvin and Pharmimex are major suppliers to the Circle of Kindness fund, which continues to purchase expensive drugs for spinal muscular atrophy and cystic fibrosis, Mr. Shulyak notes. The growth of the fund’s turnover, according to Nikolai Bespalov, Development Director of RNC Pharma, ensures an increase in regional purchases in other areas as well.

The volume of gross sales of Protek, which became the largest pharmaceutical distributor in the first quarter with a share of 13%, decreased by 6.6% year-on-year, follows from IQVIA data. But the general director of CV Protek, Dmitry Pogrebinsky, is not ready to consider this decline serious, linking it with the high base of last year and high competition. In April-May, the company sees an increase in sales, he says. Sales of “Grand Capital”, whose market share is 6.5%, on the contrary, increased by 6.6%. The company relies on deliveries to the pharmacy segment.

In general, in Russia, sales of medicines in the first quarter, according to the CRPT, amounted to 1.45 billion packages with a total value of 297 billion rubles. Compared to the same period last year, these values ​​increased by 5% and 3%, respectively. DSM Group also notes a decrease in the turnover of the pharmacy market in the first quarter by 18% yoy, to 419 billion rubles. But these indicators may also include dietary supplements, medical devices and other goods. The non-drug assortment forms 12-17% of sales of the largest distributors, IQVIA notes.

Despite the negative dynamics of January-March, Sergey Shulyak expects that by the end of 2023, the pharmaceutical market turnover in money terms will grow by 4-8%, positive dynamics will begin to be traced from the second quarter. In his opinion, inflation and the general transition of the population to more expensive medicines can become factors for the growth in turnover. “The generation is changing, and the use of such budget drugs as analgin and activated charcoal is gradually decreasing,” the expert explains. Nikolai Bespalov is counting on positive market dynamics starting from the third quarter due to the growth of pharmacy sales against the backdrop of an improvement in the situation with household incomes.

Alexandra Mertsalova, Anatoly Kostyrev