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Issued by UPharma Consulting

UPHARMACIA Ukrainian Pharmaceutical Market Monthly

05'17 issue

Macroeconomic Environment Market & Companies News Regulatory Updates Healthcare News

UPharma Consulting is a professional consulting company, operating in the Life Sciences sector. We deliver best global practices in market knowledge, people management, marketing and strategy for Pharma and Healthcare in the CIS/CEE.


Upharmacia May 2017

CONTENTS Page

3 5 5 6 7 8 10

Section

/ / / / / / /

Data period

Macroeconomic Indicators

Apr 2016-Apr 2017

Economy & Pharma Dashboard

Apr 2016-Apr 2017

Economic News

May 2017

Pharma Market News

May 2017

Regulatory Updates

May 2017

Healthcare News

May 2017

CIS Pharma

May 2017

Disclaimer: These publications have been prepared by the research department of UPharma Consulting (“UPC”). It is provided to our clients and industry stakeholders for information purposes only, and UPC makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to any data included in this publication. UPC will not treat unauthorized recipients of this report as its clients. The information contained in this publication has been obtained from sources that UPC’s research group believes to be reliable, but UPC does not represent or warrant that it is accurate or complete. UPC is not responsible for, and makes no warranties whatsoever as to, the content of any thirdparty web site accessed via a hyperlink in this publication and such information is not incorporated by reference. All rights reserved. No part of this publication may be reproduced in any manner without the prior written permission of UPC. UPharma Consulting LLC is registered in Ukraine, Kyiv, 04212, 21st M. Tymoshenka str., building 7, office 5. Additional information regarding this publication will be furnished upon request.

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Upharmacia May 2017

MACROECONOMIC INDICATORS INDICATORS

2016 Apr

May

Jun

Jul

Aug

2017 Sep

Oct

Nov

Dec

Jan

Feb

Mar

Apr

MACROECONOMIC INDICATORS GDP ($ bn) growth, % y-o-y

Export ($ bn) growth, % y-o-y

Import

($ bn)

growth, % y-o-y

Industrial Prod. Sales ($ bn) growth, % y-o-y

Retail Turnover ($ bn) growth, % y-o-y

Unemployment Rate (%) Average Salary ($) CPI of Ukraine GfK Consumer Sentiment Index

Q2

Q3

Q4

21.053

26.185

27.930

-0.02%

Q1

9.16%

0.87%

Q2

2.4%

3.10

2.88

2.93

2.92

3.18

3.16

3.24

3.62

3.63

3.03

3.20

4.11

1%

-2%

-5%

-7%

3%

-6%

0%

16%

8%

48%

20%

37%

3.34 8%

3.05

2.69

2.87

3.09

3.45

3.48

3.54

3.81

4.13

3.10

3.67

4.37

3.73

7%

2%

4%

4%

-11%

8%

10%

24%

32%

32%

18%

35%

22%

5.17

5.39

5.44

5.61

5.57

5.62

6.39

6.91

7.64

6.34

6.44

6.91

5.92

-12%

-5%

-6%

-2%

3%

-2%

2%

17%

20%

29%

31%

28%

15%

1.76

1.59

1.73

1.87

1.92

1.76

1.87

2.04

2.09

1.40

1.37

1.62

1.66

6%

-18%

-6%

-3%

2%

-5%

-8%

14%

4%

-12%

-8%

-2%

-6%

1.6

1.6

1.5

1.4

1.3

1.3

1.2

1.3

1.5

1.6

1.7

1.5

1.4

191

198

214

217

208

204

208

210

247

221

230

250

248

109.8

107.5

106.9

107.9

108.4

107.6

112.4

112.1

112.4

112.6

114.2

115.1

112.2

49.1

50.3

52.7

50.1

53.7

50.1

51.6

47.4

57.1

53.7

56.2

55.5

54.9

OFFICIAL CURRENCY EXCHANGE RATE UAH / USD

25.6

25.2

25.0

24.8

25.1

26.3

25.8

25.7

26.2

27.2

27.0

27.0

26.9

UAH / EUR

29.1

28.5

28.1

27.5

28.1

29.5

28.5

27.8

27.6

28.8

28.8

28.8

28.8

13.58

18.81

18.40

14.75

23.95

8.10

13.31

22.01

12.22

PHARMACEUTICAL INDUSTRY INDICATORS Export of Pharma Products ($ mio)

growth, % y-o-y

Import of Pharma Products ($ mio)

growth, % y-o-y

Retail Sales, values ($, mio) growth, % y-o-y

Retail Sales, volumes (mio units)

growth, % y-o-y

Average Cost of Pack (USD) growth, % y-o-y

13.90

14.17

16.15

13.36

3%

9%

5%

-4%

51%

37%

51%

26%

52%

-3%

0%

42%

-12%

130.0

110.4

132.1

133.1

137.3

140.6

137.3

142.6

169.1

102.4

123.4

150.6

116.8

25%

31%

15%

25%

47%

15%

-7%

1%

19%

-1%

-15%

20%

-10%

178.1

177.6

174.8

175.4

180.9

190.4

212.2

224.7

268.0

233.2

225.4

187.0

210.5

-1%

-8%

-2%

2%

2%

-1%

3%

14%

26%

17%

28%

0%

18%

125.2

123.6

122.6

122.7

126.2

135.5

138.6

139.9

164.1

148.8

147.6

121.9

133.9

2%

-1%

4%

3%

3%

7%

6%

8%

20%

11%

16%

-9%

7%

1.42

1.44

1.43

1.43

1.43

1.41

1.53

1.61

1.63

1.57

1.53

1.53

1.57

1%

-2%

-6%

-3%

-1%

-8%

-3%

6%

5%

5%

10%

9%

10%

CPI, Pharma Products

108.4

107.3

108.2

107.4

107.2

107.9

107.6

107.4

106.4

105.4

104.2

103.2

102.8

Local Companies share,

42.3

42.9

42.8

42.8

42.6

43.4

42.4

42.3

41.7

41.9

42.7

43.0

42.7

76.7

77.2

77.4

77.9

77.6

76.5

75.1

74.9

73.9

74.5

75.2

75.7

75.6

values (%)

Local Companies share, volumes (%)

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RECRUITING & EXECUTIVE SEARCH We recruit pharma people in the CIS region and focus on: - Management & HR - Sales & Marketing - Regulatory Affairs - Quality Assurance - Finances & Operations

Anastasiya MAXIMENKO

Partner, HR-Consulting AMaximenko@upharma-c.com +380 (44) 232-11-43 +380 (97) 953-68-14

We aim to be your trusted advisor in People Management


Upharmacia May 2017

ECONOMY & PHARMA DASHBOARD 264.9

280

240

212.2 200

178.1

177.6

174.8

175.4

180.9

160

120

123.6

122.6

122.7

148.8 138.6

Apr

May

Jun

Jul

6.39

7

5.17

5.44

5.61

5.57

6.91

1.76

3

1.73

1.92

1.76

1.87

1

100

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

6.44

Apr

13.3

May

Jun

Jul

Aug

Sep

Oct

Im port

30

2017 Nov

Dec

Jan

2.5

2.0

1.62

1.66

1.37

40

30

1.5

20

109.8

107.5

29.1

28.5

25.6

25.2

0

Feb

0.0

Feb

106.9

28.1

25.0

107.9

27.5 24.8

108.4

28.1 25.1

107.9

29.5

26.3

112.4

112.1

112.4

Mar

Apr

112.6

114.2

115.1

112.2

120

28.8

28.8

28.8

100

27.0

26.9

28.5

27.8

27.6

28.8

25.8

25.7

26.2

27.2

27.0

UAH/USD

1.0

UAH/EUR 10

Jan

Mar

60

Export

8.1

Ukraine's International Trade in Pharma Production 2016

12.2

160

Apr

CPI

Official Currency Exchange Rates vs. Consumer Price Index 2016

0.5

Dec

90

14.8

13.6

120

140

5.92

2017 Nov

mio USD

22.0

102.4

18.4

16.1 13.4

116.77

3.0

6.91

2.09

2016

14.2

150

123.4

50

6.34

2.04

0

Apr

7.64

1.40

bn USD

15

5

Industrial Production Sales & Retail Turnover of Enterprises Surplus

2

0

1.59

1.87

Jan

137.4

120

5.62

5 4

Dec

18.8 13.9

133.9

2017 Nov

137.3

180

150.6

142.6 23.9

10

121.9

Oct

133.1

140.6

110.4

20

140

mio units

Sep

132.1

130.0

187.0

147.6

mio USD

8

5.39

160

139.9

126.2

Aug

211

169.1

30

25

225.4

164.1

Pharmaceutical Market Retail Sales 2016

80

6

233.2

224.7

190.4

135.5 125.2

180

0

Apr

May

Jun

Jul

Aug

Sep

Oct

80 60 40 20

2017 Nov

Dec

Jan

0

Feb

Mar

Apr

ECONOMIC NEWS —— On May, 17, Ukraine and the EU signed final agreement to grant Ukraine a visa-free regime in Schengen area. Ukrainians will be able to freely travel the EU since Jun 11. —— In 1Q2017, Ukraine’s imports of goods increased 27.3% PPG, exports of goods – 34.4% PPG. Trade deficit amounted USD 736 mio vs USD 1 bn in 1Q2016. Largest increases were in exports of minerals (89% PPG) and metals (42% PPG), as well as in imports of the black energy (65% PPG) and vehicles (60% PPG). —— The Head of the National Bank of Ukraine Valeriya Gontareva announces her resignation and appointed her Deputy Yakiv Smoliy as acting Head of the central bank. President of Ukraine

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plans to submit the new Head nomination in Sep 2017. —— The PMs of Ukraine and Israel met to discuss the establishment of the FTA between the countries. The corresponding agreement is expected to be signed by the year’s end. —— President of Ukraine reported that the government approved the draft program for attracting low cost airlines to Ukraine. —— In Apr, Ukrainian industry slowed the production by 6.1% y-o-y. Mining and metals decreased by 12.3% and 10.7% y-o-y, respectively. Biggest declines were in Luhansk (-46% y-o-y) and Donetsk (23.6%) regions.

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Upharmacia May 2017

PHARMA MARKET NEWS Gedeon R ichter Ukraine Changed Organization Type and R eplaced the Management

On May 5, Gedeon Richter Ukraine changed the type of organization from Public JSC to Private JSC. Moreover, the Supervisory Board of the company decided to re-elect the management board of the company. Thus, Natalia Sereda replaced Lazslo Kovach at the position of the Head of the Board.

Moreover, Arterium plans to expand the OTC business. Arterium is implementing the strategy for accessing the EU market. The company has registered medicines in Serbia and plans to access Slovenia. In 2016, Arterium Corporation held second place at the Ukrainian retail drug market climbing two positions as compared to 2015.

Biofarma Disputes the UNDR Tender

In 2016, the sales of Gedeon Richter in Ukraine increased 11.3% y-o-y to EUR 29.6 mio after in 2015, the sales almost halved from EUR 55 mio in 2014. In 2016, the company lost 4 positions in the list of best-selling companies of the Ukrainian retail drug market and held 14th position.

Ukrainian producer of blood preparations Biofarma seeks the UNDR to revise the tender on the procurement of blood factor XVIII, which was won by Italian company Kedrion. The President of Biofarma Kostiantyn Yefymenko stated that the Kedrion’s bid was 30% more expensive than the proposition of Biofarma.

Arterium May Increase Investment in Development

“The MOH has all means to stop the tender and look into situation,” Mr. Yefymenko said. “We are ready figure this out at any level.” The company appealed to the UNDP for it to cancel the nontransparent decisions. It also requested the MOH of Ukraine to hold a joint meeting with representatives of the UNDP to review the results of the tender and to take measures to prevent similar situations in the future.

Arterium Corporation may increase investment in development of new preparations by 50-80% in 2017. In 2016, Arterium invested UAH 106 mio in development. Currently, the Corporation has 80 preparations in development. The key directions of development are cardiology, neurology, gastroenterology and antibacterial agents.

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Assets of KVF Increased 71% In 2016, the net income of Kyiv Vitamin Factory (KVF) increased 35% y-o-y to UAH 1.43 bn. The net profit of the company downed to UAH 145 mio form UAH 173 mio in 2015. The value of the company’s assets increased 71% y-o-y to UAH 1.09 bn. KVF is among the most dynamically developing companies on Ukrainian pharmaceutical market. In 2016, it was the 9th company on the retail drug market improving the position from 11th place in 2015 and 14th in 2014.

IPMA Signed Memorandum on Cooperation with Indian Pharmexcil

Indian Pharmaceutical Manufacturer’s Association (IPMA) of Ukraine signed Memorandum on cooperation with the Pharmaceuticals Export Promotion Council of India (Pharmexcil). “Our organizations will exchange information and organize joint events to promote the establishment of business relations between Ukraine and India,” the Head of the IPMA said. “After signing the Memorandum, the Indian company will be able to use organizational

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Upharmacia May 2017

and informational capabilities of the IPMA to prepare for entering the Ukrainian market through obtaining from the IPMA objective information about market opportunities, regulatory features and other data.” Pharmexcil is coordinated by representatives of the biggest pharmaceutical companies in India – Dr. Reddy's Laboratories, Sun Pharma, Ranbaxy, Aurobindo Pharma, etc. Moreover, officials of the Indian government also included in the administrative committee.

Novalik-Pharm Exports its Food Supplement to Austria Ukrainian company Novalik-Pharm started

exporting its food supplement Sitoprostat® for maintaining healthy urogenital system in men. The preparation was developed and produced by Novalik-Pharm. The main component of the food supplement (beta-Sitosterol) prevents the development of prostate adenoma. Austria is the first non-CIS market to be entered by the company. The supply contract was signed with local company OKOPHARM. “Considering that Austria has its own culture of consuming food supplement, while the legislation strictly controls their quality and safety, we consider the export to this country as the recognition of the high quality of our product,” the Head of Novalik-Pharm stated. Novalik-Pharm was founded in 2013. It produces medicines, food supplements, cosmetic

and hygiene products. The company’s portfolio includes 13 products.

Biofarma Enters Indian Market Biofarma registered two preparations of donor blood plasma in India. According to the Exports Director of the company, Biofarma received the first order on the shipment to India of 60 ths bottles of Albumin and 20 ths bottles of Bioven Mono. The company exports its products to CIS countries as well as to Mongolia, Yemen, Republic of Korea, Egypt, Mexico and Australia. Biofarma exports about 32.5% of its products. The company plans to open the new plant for blood fractionation to process up to 320 tons of blood plasma per year.

REGULATORY UPDATES Ministry of Health Has Offered Full Use of Old Prescriptions On May 23th, 2017 the Ministry of Health of Ukraine published draft “On Amendments to Order of the Ministry of Health of Ukraine No. 360 as of July 19th, 2005” for public discussion. The draft provides for use of prescription form number 1 (FA-1) of old pattern until its exhaustion. Forms number 1 are provided to

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patients in pharmacies to receive medicines under reimbursement program. Let us remind you that the Ministry of Health of Ukraine has recently made changes to the Regulations on Prescribing Medicinal Products and Medical Devices, the Procedure for Sale of Medicinal Products and Medical Devices in Pharmacies and their Units and the Rules on Storage, Recording and Disposal of Prescription Forms approved by the mentioned order of the

Provided by Ministry of Health No. 360. Based on current regulations the Ministry of Health of Ukraine allowed parallel use of forms No. 1 of old and new pattern by July 1st, 2017. If old forms are used, the prescription should contain the following information: —— corner stamp of healthcare institution;

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Upharmacia May 2017

—— be signed and sealed by a

doctor;

—— for drugs, cost of which is

subject to reimbursement, prescription should be additionally certified by an official seal of a healthcare institution and red stamp “subject to reimbursement”.

In turn, a pharmacist when realizing a medicinal product which is subject to reimbursement, affixes on the prescription written on an old

form red stamp “released for free” or “released at a discount”. The prescription remains in the pharmacy for reporting of released medicinal products which are subject to full or partial reimbursement. We can assume that in case the draft on the old forms is adopted, similar rules for prescribing and realizing drugs should be followed.

HEALTHCARE NEWS The Funding of R eimbursement Program will be Increased At the government meeting, the PM of Ukraine Volodymyr Groysman stated that in near future the State Budget would be amended to increase the funding of reimbursement program “Affordable drugs” by UAH 250 mio. “The program is working over a month. We have both positive achievements and predictable problems,” Mr. Groysan said. “The citizens of some cities report on incomplete assortment and shortage of drugs included in the reimbursement list. Some cities have insufficient number of pharmacies. The government will analyze this information.” The PM instructed the acting Head of the MoH and Vice Prime Minister to analyze the results of the program and systematize

8

problem points. Mr. Groysman also announced the expansion of the List of drugs, which fall under reimbursement. The range of diseases also could be expanded. The program “Affordable drugs” was launched on Apr 1, 2017. The initial budget amounted UAH 500 mio. At the beginning of May, Vice Prime Minister of Ukraine reported that above 3 ths pharmacies in Ukraine joined the program.

and it is absolutely necessary to carry out the reform proposed by Minister Suprun and again for the sake of the poorest Ukrainians, the most vulnerable, not for those who can go to a private clinic,” Mr. Mingarelli said.

The EU Supports Medical R eform in Ukraine

After 10 months in the MOH the new management team headed by Ulana Suprun, has introduced reference pricing and reimbursement of certain categories of medicines as well as implemented international clinical protocols. In Apr, the Parliament approved the Draft Law on healthcare establishments’ autonomisation.

The Head of EU Delegation to Ukraine Hugues Mingarelli stated that the European Union supports the reforms proposed by acting Head of the MOH Ulana Suprun. “We consider the current health system as collapsed in Ukraine

Moreover, the Head of Parliamentary Committee on Public Health also expressed the support to the reform and ensured that the Committee would not block the Draft Laws proposed by the government.

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The next important step within the reformation of Ukrainian healthcare system should become the approval of Draft Laws on state financial guarantees on provision of medical services. The MOH expects these documents to be approved as soon as possible.

children’s hospital in Ukraine. About 18 ths children are treated in the hospital annually.

The Head of OHMADYT Hospital was Elected On May 31, the MoH held the second competition on vacant position of the Head physician of the National Children’s Specialized Hospital OHMADYT. The commission announced the win of the Head of Kolomyia Regional Hospital Iryna Sadovyak. During her presentation, Mrs. Sadovyak stated that she plans to change the organizational structure of OHMADYT and make it a communal non-profit enterprise. OHMADYT is the biggest

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Upharmacia May 2017

CIS REGION PHARMA NEWS EEU On May 6, the single drug market was launched within the Eurasian Economic Union. The national markets of five member-states (Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan) started operating in a single space format. Now the development, pre-clinical and clinical trials, quality control, registration, production and distribution of medicines will be carried out under the single norms of the EEU. However, to make it easier for companies to adapt to new demands, transitional periods are envisaged. ——

K azakhstan The Head of AIMP Kazakhstan stated that after the launch of single drug market within the Eurasian Economic Union, local drugs may drop in price 10-15%. ——

—— On 23/05/2017, the Heads of leading

pharmaceutical associations in Kazakhstan signed Memorandum of restraining growth of prices on drugs and medical devices. The document fixated prices of 105 products.

Russia In the next 7 years, BIOCAD company will invest EUR 25 mio in the construction of the plant in Turku science park (Finland). This will become the first step to enter the EU market. ——

—— National Immunobiological Company

(NacImBio) signed the contract on cooperation with Binnopharm company. The companies plan to establish joint manufacturing of a multicomponent vaccine with the use of an

10

antihepatitic component. —— AstraZeneca and Skolkovo Foundation

agreed on strategic partnership in R&D and education activity. Currently, AstraZeneca studies the developments of resident companies of Skolkovo in oncology field, aiming to find possibilities for cooperation.

—— National pharma distributor SIA Group

acquired 30% share in Bentus Laboratory, largest Russian producer of household antiseptics under Sanitelle brand.

—— Nearmedic Group, which includes the clinics

chain and pharmaceutical company, started searching for a strategical investor. For sale are only production units of the company that are engaged in the production of drugs, diagnostic tests and laboratory equipment. The company plans to attract about USD 100 mio. —— Group of companies Marathon Pharma (part of Marathon Group) acquired the control package of biopharmaceutical company Fort, the producer of influenza vaccine Ultrix. —— National Immunobiological Company

(NacImBio) will build new plant for the production vaccines in Ufa. The budget will amount RUB 6 bn.

Uzbekistan President of Uzbekistan signed the Order on creation of 7 free economic zones, specializing in the production of pharmaceutical products. The zones will be opened in Karakalpakstan (Nukus-pharm), Jizzakh region (Zomin-pharm), Namangan region (Kosonsoy-pharm), Sirdaryo region (Sirdaryo-pharm), Surxondaryo Region (Boysun-pharm) and Tashkent region (Bustonlik-pharm and Parkent-pharm). ——

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Upharmacia - May 2017  

Ukrainian Pharmaceutical Market Monthly. Read & download: https://goo.gl/qJK9oP

Upharmacia - May 2017  

Ukrainian Pharmaceutical Market Monthly. Read & download: https://goo.gl/qJK9oP

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