Page 112 - RusRPTMar19

Total shipments, which amounted to 1.87bn packages, decreased by 7.7%. There are two factors driving this trend. First, and most importantly, declining real incomes have led to a decrease in public demand for expensive pharmaceuticals. And second, a large number of generics have appeared on the Russian market, thereby replacing imported brands. Due to the rise in Russian generics, some large pharma, such as Novartis, Johnson and Johnson, and Teva, have declined to localize production in Russia.
· Swiss pharma Novartis imported the most drugs last year at 41.6bn rubles ($634mn).
· French Sanofi saw the biggest increase in shipments, boosting supply to Russia by 10% in 2018.
· Israeli Teva saw one the biggest drops, reducing supply by 10% in monetary terms. This was due to a nearly 50% reduction in the import of two of its leading cardiovascular and antiviral drugs.
Foreigners start to use Russian medical services. AFK Sistema subsidiary Medsee has launched a separate department for foreign patients after seeing a 40% increase in foreign consumers of medical services last year.The ruble devaluation has taken time to have an impact, but it looks like inflows of tourists from CIS states are rising and, most importantly, Chinese tourists are beginning to consume Russian medical services. If the sector becomes more competitive and domestic replacements for imported medications and medical equipment take root, Russian healthcare would benefit considerably. The weaker ruble is a competitive advantage. Don't hold your breath yet, though. Flows will likely keep rising, but we're far off from seeing a full-fledged medical tourism industry take root.
· Only 5% of all Medsee clients are foreigners, but the company has noticed the trend and is looking to profit off of further growth in medical tourism inflows.
· The current national plan to develop the healthcare sector through 2024 calls for annual medical exports exceeding $1bn so as to help finance the sector's growth.
· The global market for medical services will exceed $3 trillion by 2025, and is likely to keep growing given longer lifespans.
· By comparison, Israel earns roughly $100mn annually on medical tourism, but the profits are centred in 6 multipurpose medical centres. Moscow alone has a much larger existing network of facilities that could tap into the market.
112 RUSSIA Country Report March 2019 www.intellinews.com