Page 122 - RusRPTAug21

Arctic zone. The law is posted on the portal of legal information, Russian media reported. According to the law, SMEs wishing to obtain the status of a resident of the Arctic zone are not required to invest in the construction, development, or renovation of real estate objects. The list of types of economic activities for obtaining resident status will be established by the Russian government. The law abolishes the requirement for residents to operate exclusively in one municipality at the place of state registration. This means that if a company or individual entrepreneur (IE) is registered in the region of the Arctic zone, then they will be able to work on preferential terms in several municipalities at once, which will help to get additional revenue and expand the market.
For the first 5 months of this year, pharmacy sales in terms of physical turnover fell 14.9% year-on-year as more and more Russians prefer to order online. That’s 2.25bn physical units sold. For comparison, turnover rose 4.8% in annualized terms for Jan.-May 2020 to 2.65bn units.
DSM Group’s Sergei Shulyak makes clear that consumers’ spending power continues to decline — last year Russians prioritized purchasing medicines that were prescribed by doctors and foregoing other pharmaceuticals that weren’t strictly necessary.
Even that balance might be worsening now, though part of the story would be the decline in other seasonal viruses like the flu due to the unintended positive consequences of anti-COVID public health measures.
Pharmacies are also noticing that Russians have begun to replace purchases of large quantities of cheap generics with purchases of fewer pills from the choicest brands known and trusted to be effective. Online sales grew 62% last year and it’s expected this year will show huge growth again.
Stories like these tend to be useful leading indicators about household finances and the haphazard state of Russia’s ongoing import substitution efforts for medications, particularly since Putin just signed into law that firms can legally make medication using pirated patents to encourage more industrial espionage and entrepreneurship to steal know-how where possible.
E-commerce platforms provide a chance to quickly search for trusted brands and, perhaps just as importantly, reduce the time people spend in public with others who might be sick. Even if Russians distrust vaccines, virtually everyone knows someone who got sick at this point and it’s hard to imagine that there isn’t some level of health anxiety working in tandem with the growth of e-commerce platforms given the new wave. Overall, incomes don’t appear to be rising. Rather things are getting worse.
122 RUSSIA Country Report August 2021 www.intellinews.com