Me Medi dici cine ne & & Pha harmac rmaceu euticals ticals in n Tatars tarstan tan: : Curren ent State and nd Future re Prosp ospects cts
invest.tatarstan.ru Content Overview of the Russian market Key drivers and opportunities Legal framework Overview of Tatarstan and its market Success stories from Tatarstan Kazan Smart City
invest.tatarstan.ru Im Impr pres essiv sive e His istory ry Nikolai olai Basov (1922 - 2001) Mikh khail ail Lomonoso sov (1711-1765) Russian physicist whose Created a system of higher education in pioneering work led to the Russia invention of the laser. Dmit mitri ri Men Mendele leev (1834-1907) - Alexan ander der Popo pov (1859-1905) arranged the 63 known elements In 1895 he developed the first into a periodic table based on radio-receiver. atomic mass and also invented 40 ° vodka formula. Ivan Pavlov (1854 - 1929) The first Russian Nobel Prize laureate in the Theoretical Medicine. He became famous for his research on the regulatory effect of the nerves.
invest.tatarstan.ru view of R f Rus ussi sia Over ervie Huge and growing Governmental Aging population market support Custom union with Developed Raising purchasing Belarus and infrastructure power of the people Kazakhstan Legal reform aimed to Accession to the WTO Excellent improve health care as a guarantee for macroeconomic industry and transparent situation encourage local environment production
invest.tatarstan.ru Main Ma in Op Oppo portu tunitie nities in in the he Russ ssia ian n Ma Market et growing demand for pharmaceuticals produced locally growing opportunities for expenditures on high-cost drugs, state programs particularly in the on federal and state-financed state level programs government support to growth of local foster growth of the R&D and biotech local pharmaceutical for innovative industry drugs
invest.tatarstan.ru The he Key Dr Driv ivers ers of the he Ma Market et Gover ernme nmenta ntal Suppor port The Russian Healthcare Development Program 2020 (aka Pharma 2020) substantially amends legal framework of the Russian healthcare market and significantly raises state expenditure on the sector. The legal changes, above all, aim to encourage local production of pharmaceuticals. Inc ncrea ease e of C f Cons nsumption mption In comparison with the Western markets the per capita spending on pharmaceuticals remains five to seven times smaller. This low consumption level is not sustainable and the market is destined to further expansion fueled by increase of both purchasing power and awareness of more healthy life style. Demo De mographi aphic Sit ituat uation ion Russia’s gradually aging population is another significant growth driver of the health care industry. Life expectancy at birth will increase to 75 years in 2020 from the current 69 years. Medi Me dical al Ins nsuran rance The insurance is expected to have significant impact on the commercial retail segment due to its dramatic increase in the next years. Source: World Bank. Frost & Sullivan, Changes in the Russian Pharmaceutical Market Following Introduction of 2020 Governmental Reforms.
invest.tatarstan.ru GDP DP Per er Capi pita ta Growth th in in Russ ssia ia GDP per capita (current US$) 16000 14000 12000 10000 8000 GDP per capita (current US$) 6000 4000 2000 0 Source: World Bank 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
invest.tatarstan.ru The he Fe Fede deral al Gover ernm nment ent Expe pend nditu iture re on n Hea ealthc thcare are Se Sect ctor 80 70 60 50 2009 40 2015 30 2020 20 10 0 State expenditure (billions USD) Source: Frost & Sullivan, Changes in the Russian Pharmaceutical Market Following Introduction of 2020 Governmental Reforms.
invest.tatarstan.ru Sale ales in Russ ssia - Demand mand for ph pharm armac aceut euticals icals Will l Double uble in Next xt 10 Years ars Market growth is expected to be around 15% per year. US$ billions 50 45 40 35 30 25 US$ billions 20 15 10 5 0 Sales in 2011 Projected sales in 2020 Source: Business Monitor International
invest.tatarstan.ru Patent ented ed ver ersu sus s Gen ener eric ic Produ oduct cts Generics will play main role in driving up pharmaceutical sales Additional spending on patented products (2020) Additional spending on generics (2020) Source: Business Monitor International
invest.tatarstan.ru Inno In novativ ative e Pha harmac maceu euticals ticals The Russian market as a whole is driven rather by generic low cost products (out- 30% of Drugs are State- funded of-pocket expenditure). However, about 30% of pharmaceuticals purchase is funded by the state and thus guarantees stable and steady income for innovative medical and biotech products sellers. It encompasses high-cost innovative products (treatment of tuberculosis, HIV, cancer, etc.) Stable business climate for high-cost pharmaceuticals development, production and sales
invest.tatarstan.ru Th The Russia ian Governm ernmen ent t wi will pour r 4. 4.2 bi 2 billio ion n USD in into Mode Mo derni nization zation of H f Hea ealthca thcare re and nd Bio iotech h Industries ries Pharma 2020 20 Investment tment 5 key goals ls of the invest estment ment Program ram Until l 2020 20 - Facilitation of production of pharmaceuticals within the country Volume of investment ($ billion) - Development of R&D facilities 3.2 Medical R&D projects - Production and commercialization of Transition to GMP (Good innovative medical products 0.9 Manufacturing Practice) - Increase of export potential (8 times) Staff training and 0.1 infrastructure development - Training of scientific medical 4.2 personnel Total Source: Frost & Sullivan, Changes in the Russian Pharmaceutical Market Following Introduction of 2020 Governmental Reforms.
invest.tatarstan.ru Legal l Fr Frame mework ork Ref eform rm The reform of the pharmaceutical industry which was initiated by the Government in 2008 is still actively progressing. The year 2012 saw the adoption of a number of highly important legislative acts as well as amendments and corrective adjustments to existing industry legislation. Goals s (2020 2020) Increase quality and availability of healtcare Preferences to local Stop the decline of population production over Increase life expectancy at birth to 75 years imports More transparent, Decrease infant mortality by 20% and fair and efficient maternal mortality by 15% market Significant Decrease tabacco consumption by 25% and increase in the consumption of alcohol by 9 litres per government capita/year spending Source: Ernst & Young: Survey of the pharmaceutical industry in Russia, 2012; Frost & Sullivan, Changes in the Russian Pharmaceutical Market Following Introduction of 2020 Governmental Reforms.
invest.tatarstan.ru Compu puls lsory ry Me Medi dical cal In Insu suranc nce e Sign Si gnificant ificant Growth th in in Volume me in in Russ ssia ia billion rubles 1200 1000 800 600 billion rubles 400 200 0 2010 2011 2012 2013 2014 The proportion of compulsory medical insurance as a share of GDP will move up from 3.56% to 5.5% Value given in accordance with Federal Law No. 370- FZ of 30 November 2011 “Concerning the Budget of the Federal Compulsory Medical Insurance Fund for 2012 and the Planning Period 2013 and 2014”. Source: Federal Service for Financial Markets
invest.tatarstan.ru Volume me of St State e Hea ealth thcare care Expe pend nditu iture re and nd It Its G s Growth th in in Russ ssia ia Indicator 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Expendi 1 933 2 230 2 773 2 993 4 238 4 505 4 789 5 090 5 411 5 752 tures (billion rubbles) Increase - 15 24 8 42 6 6 6 6 6 % Proporti 3.56 3.80 4.28 4.13 5.50 5.50 5.50 5.50 5.50 5.50 on of GDP Source: The Ministry of Finance of the Russian Federation
invest.tatarstan.ru The he Russ ssia ian n Gover ernm nment ent Supp pports ts Loca cal Produ ductions ctions Over er Impo ports ts The overriding goal of the Pharma 2020 is to secure that at least 50% of the pharmaceuticals (value terms) circulated in the Russian market are of domestic origin. 2020 2012 Foreign Foreign production production Domestic Domestic production production Source: Cegedim. Emerging Markets Today and Tomorrow: Insights of Healthcare, Pharmaceuticals and Future Trends in the BRIC Landscape.
invest.tatarstan.ru Amen ende ded d legal gal frame mework rk en encourages ages to local caliz ize e pr produ duction ction in in Russ ssia ia The execu cutiv tives, s, industry ry expe perts ts and analysts ts belie ieve: State policy will encourage foreign manufacturers to establish production in Russia State policy will encourage the acquisition of Russian companies by foreign manufacturers State support will favor growth in Russian 2012 manufacturer's share of the market 2010 Despite state support, Russian manufacturer's share of the market will decrease Other 0% 20% 40% 60% 80% 100% Source: Ernst & Young: Survey of the pharmaceutical industry in Russia, 2012
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