Suppliers are not in a hurry to pharmacies – Newspaper Kommersant No. 147 (7348) of 08/15/2022

The record growth of the pharmaceutical market in the first half of the year coincided with a decline in the share of the largest drug distributors in the retail segment. This is due to the tightening of requirements for the payment discipline of pharmacies against the background of the crisis and uncertainty in the market, as well as an increase in the distribution margin. In the second half of the year, analysts expect the market to continue growing against the backdrop of a surge in the incidence of COVID-19, with the largest suppliers returning their positions.

According to the results of January-June, drug distributors increased their turnover by 19% year-on-year, to 1.12 trillion rubles, according to a study by DSM Group. According to analysts, this is one of the largest gains in the market “for many years.” For comparison: during the first wave of the COVID-19 pandemic in January-June 2020, distributors’ sales grew by 14%, and in the first half of 2021 – by 13%.

According to DSM Group, the growth of the market this year was provided, among other things, by the rush demand for medicines in the spring. In the first two weeks of March after the outbreak of hostilities by the Russian Federation in Ukraine, the revenue of pharmacy chains increased by an average of 50%. Consumers formed stocks, increased demand, in particular, used imported medicines for the treatment of chronic diseases. In addition, the DSM Group notes that drug prices in March increased by 10% by 2021, which also affected the market turnover in the second quarter.

The combined share of the top ten drug distributors rose by 3.3 percentage points to 71.5% over the year by July. But the positive dynamics is associated with increased sales consolidation in the public procurement segment from 43.1% to 53.5%, while the share of the ten largest suppliers in the retail market decreased from 96.8% to 88.9%.

The three leaders of the DSM Group rating have not changed. The first place was retained by Eduard Netylko’s “Pulse”, having increased deliveries by 22%, to 150.4 billion rubles. “Katren” by Leonid Konobeev increased turnover by 19.8%, to 141.5 billion rubles, “Protek” by Vadim Yakunin – by 23.1%, to 137.5 billion rubles. year by year.

DSM Group CEO Sergey Shulyak explains the decrease in the share of the ten largest retail distributors by the “increased caution” of companies. “Small players are forced to fight for market share and take more risks. Large players tend to take a more balanced approach and focus on profits,” he explains. In March, distributors began to tighten the conditions for dispensing drugs to pharmacies, reducing deferrals – the term for granting commodity loans. Conditions worsened everywhere, and second-tier players often behaved more harshly, says Alexander Mironov, general director of the Ryazan Apteka Pharma network. According to him, now the conditions for dispensing medicines by distributors have begun to return to pre-crisis levels since May.

Dmitry Pogrebinsky, CEO of CV Protek, confirms that sales in the retail segment declined in the second quarter amid tightening requirements for customer payment discipline and a general decline in consumer demand. By the end of the half year, he said, the market had stabilized. According to DSM Group, sales in pharmacies month-on-month began to decline from April. In “Pulse” and “Katren” they did not answer the questions of “Kommersant”.

Sales Director of Profitmed Nikolay Todua adds that in the face of uncertainty, the growth of the key rate of the Central Bank and the rise in the cost of bank loans, distributors were forced to insure economic risks with an increased margin on almost the entire range, with the exception of vital drugs.

The only one of the ten largest distributors that increased its share in the pharmacy segment was the BSS group, whose figure increased from 3.8% to 5.1%. The company explains the results of the rush shipment to networks in the first quarter, as well as the expansion of its own Aloe network and the opening of a new branch in Novosibirsk.

According to Sergey Shulyak’s forecasts, by the end of the year, the turnover of the pharmaceutical market will increase by 15%. The decline in sales in the summer is offset in the fall-winter, when the increase in the incidence of COVID-19 begins to affect, he points out. Large distributors, according to the expert, will already feel quite confident and will be able to restore their shares in retail.

Polina Gritsenko