Russian market evolvement in crisis mode, first insights of 2016 and further outlook. Demidov Nickolai General manager IMS Health, Russia&CIS

Transcription

1 Russian market evolvement in crisis mode, first insights of 2016 and further outlook Demidov Nickolai General manager IMS Health, Russia&CIS 1

2 Whole market Russian pharmaceutical market grew by 10% terms mainly due to price increase and because of some deviations in RLO and DLO consumptions Sales Value by channel Bln RUB, trade price % 3% 30% 15% Sales Volume by channel Mln packs % -3% 18% -1% % 596 Hospital RLO DLO OOP % Indicator RUB Bln USD Bln EUR BLN Packs BLN Value ,4 14,8 13,4 5,2 Growth from 2014,% 11% -31% -17% -5% 2 Note: Value - Ruble (Rub)); Volume number of packs sold; YoY year-on-year Source: IMS Health database (TRD prices) х% Year-on-year growth, 2015/2014

3 Retail market In 2015 retail OOP market continued 2014 (crisi) trend in moving towards Rx vs OTC, Gx vs Non-Gx and local vs imported products Retail sales value RX/OTC Bln RUB, trade price +11% Retail sales value Gx/non Gx/others Bln RUB, trade price +11% Retail sales value Imported/local Bln RUB, trade price +11% % 50% +9% OTC % 34% +15% Gx % 27% RF +20% +7% 49% 50% Rx 38% 37% Non-Gx 75% 73% Imp +8% +12% 29% 29% Others +10% Source: IMS Health database (TRD prices) 3 х% Year-on-year growth, 2015/ 2014

4 Keep prices (<22%) Increase prices (>22%) Whole market Among top 100 companies those who chose to keep prices have gained market share Companies reacted to crisis with 2 strategies: keep prices or increase them Top 100 companies on Russia total pharma market Top 100 companies total sales, Bln RUB Company type International original # companies % % International generics Local 26 83% 79% Company type International original # companies 2 +4% MS increase % 32 International generics 11 Local 19 17% 21% Number Source: IMS Health data bases Share in Market 2015 Share in Market

5 Whole market Key outcomes and learnings from 2015 Retail Suffered from decrease of ongoing consumption power of population; Consumption pattern started to change significantly; Remained in green growth zone in Ruble terms, though consumption dropped; Market growth started to be driven by inflation; OTC passed the growth leadership to Rx; Generics felt better then other types of products Local manufacturers benefited from the crisis situation absolute growth leaders in Rx&OTC Rx EDL was the most stable in terms of maintenance of consumption due to patient adherence and price increase limitations Budget Financing remained on the same level in general, slightly increased in Rubles; Increase in consumption in RLO was because of subsidized purchase of orphan drugs; Hospital purchases started to show tend-cy to decrease of growth, threat of deficit; Significant growth was shown by several local companies in DLO (substitution of imported products in VZN) and in Hospital (both substitution and solid expansion in broad categories); New regulations was put in place to make the purchases more transparent and support the local production; 5

6 Value Volume Whole market In Q Russian pharma market grew by only 4%* in value, but there tendency of volume drop was almost eliminated Total Sales* by Value Bln RUB Total Sales* by Volume Bln Packs +4% -1% % 1,3 1,280-0,3% OOP** Hospital Federal Reimb Regional Reimb 1,137 1, % -8% +41% 0,118 0,104-12% -12% YTD 3 15 YTD 3 16 YTD 3 15 YTD 3 16 Indicator RUB $ EURO Packs Value YTD 3 16, Bln ,2 2,9 1,3 Growth,% +4% -14% -11% -1% Note: * excluding Regional reimbursement; ** OOP out-of-pocket (excluding food supplements and diagnostic reagents) Source: IMS Health database (TRD prices) 6

7 Value Volume Whole market Old trend is back in Q OTC and non EDL Rx drove the growth Total Sales by Value Bln RUB Total Sales by Volume Bln Packs +4% -1,3% % 1,3 1,3-2% % OTC RX EDL RX NOT EDL 0,8 0, % % 0,4 0,1 0,4 0,1-3% YTD 3 15 YTD 3 16 YTD 3 15 YTD 3 16 Indicator RUB $ EURO Packs Value YTD 3 16, Bln ,2 2,9 1,3 Growth,% +4% -14% -11% -1% Note: * OOP out-of-pocket (excluding food supplements and diagnostic reagents) Source: IMS Health database (TRD prices) 7

8 Value Volume Retail market Inflation supported the growth (but at lower scale) in Retail of both Rx and OTC while volumes of OTC purchases showed decline Total OOP Sales by Value Bln RUB Total OOP Sales by Volume Mln Packs +6% -0,8% % 94 OTC 897-2% 881 Rx 73 +6% % 347 YTD Mar 2015 YTD Mar 2016 YTD Mar 2015 YTD Mar 2016 Indicators a heavily influenced by the Q results there was splash of inflation caused by sharp devaluation Growth equalize for Rx and OTC indicates the short term stabilization on the market in Q Source: IMS Health database (TRD prices, OOP sales only) 8

9 Value Volume Retail market Volume of Non-EDL was decreasing in Retail in Q1, mainly because of OTC life style products are still suffering from declining consumption Total OOP Sales by Value Bln RUB Total OOP Sales by Volume Mln Packs +6% -0,8% % 110 Non-EDL 760-2% 741 EDL 57 +7% % 486 YTD Mar 2015 YTD Mar 2016 YTD Mar 2015 YTD Mar 2016 Price restrictions helped EDL products to show more sustainable growth vs. non-edl Wholesalers keep rising prices for Non-EDL (OTC and Rx), still faster than manufacturers, in order to retain value sales as price increase for EDL is restricted by the law. But are caught in a constrains of the consumption power of population which is decreasing Source: IMS Health database (TRD prices, OOP sales only) 9

10 Whole market Key take preliminary insights for 2016: 1 2 The market is still under the pressure of external factors and showed decrease of growth rate Consumption in retail has stabilized and seem to be strengthened in Q2 (low base) 3 OTC and Rx had equalized the growth rates though at minimum level At least for short term inflation has soften its pressure on the market Companies with diversified portfolio, especially generics, and specifically local are still in better position than others While in DLO the quarterly supplies can be still improved due to the phasing change, decrease of hospital purchases is perceived as ongoing worsening of the trend of 2015 Supplier chain stability lack of marginality, regulatory changes provide a push for further M&A both whls and retail 10

11 Whole market IMS Long-term Market forecast assumes 7,1% annual growth until 2020 IMS March 2016 Pharma market forecast, Bln RUB in Ex-MNF prices, audited market Key trends 747,6 798,1 858,9 +7,1% 921,6 986, ,5 Pricing system which favors domestic producers based on their level of domestic production is expected The Essential Drug List (EDL) will remain the main reference point for hospital formularies and prescribing of inpatient drugs Bln standard units 176,7 176, ,9 +0,8% , , ,6 Savings in public procurement processes will be sought through tougher rules on tender purchasing, with mandatory use of INNs and possible banning of product bundling Russian citizens 66% share of the drug bill is unlikely to be reduced significantly during the prognosis period, although a national system for outpatient drug reimbursement will emerge in the longer term (pilot projects start after 2017) Source: IMS Health market forecast March 2016

12 Slight look onto specifics of tender business with some insights in the 2 nd largest sector in the Russian market - Hospital 12

13 Average price per item in tenders, Rub. Effect of auctions steadily brings ~10% vs starting price in purchases organized for hospital use ,0% ,4% 198 Initial price of lot, Rub Final price of lot, Rub Source: IMS Health Tender database 13

14 State auctions for Hospital needs structure by type in (by number of auctions) ,3% 11,5% 0,1% 88,2% 88,6% 0,3% 10,9% 0,1% Majority of purchases for hospital needs are still being made through the open auctions in electronic form Single supplier and requests for quotations remains insignificant in terms of number of the purchases Single supplier Request for quotations Other Open auction in electronic form Source: IMS Health database (TRD prices) 14

15 State auctions for Hospital needs structure by type in (in money terms) ,1% 3,9% 0,5% 95,4% 91,7% 1,7% 5,8% 0,8% Though the dominance of open auctions in electronic form remains absolute in money terms, both single supplier and requests for quotations has gained quite a significant growth in share over last 2 years Source: IMS Health database (TRD prices) Single supplier Request for quotation Other Open auction in electronic form 15

16 CAGR 3 Years CAGR 3 Years Long/short term (2015/14) growth priorities in purchases for Ambulatory use, by values, RuR TOP-10 products/molecules short/longterm trends in ambulatory purchases by INN 400% 60% TUBERCULIN 350% TEST 50% VACCINE, PNEUMOCOCC AL CONJUGATE ABACAVIR VACCINE, INFLUENZA 300% 40% 250% 200% 30% LOPINAVIR* RITONAVIR ABACAVIR* 150% 20% LAVIMUDINE 100% 10% ATAZANAVIR 50% AMINSALLICILLIC 0% DARUNAVIR -50% 0% ACID 0% 50% 100% 150% -500% 0% 500% 1000% 1500% 2000% 2500% -50% -10% GROWTH GROWTH PY PY size of the bubble shows the relative size of particular market TOP-10 products/molecules short/longterm trends in ambulatory purchases by ATC2 L04 IMMUNOSUPRES SANTS DRUGS USED IN DIABETES 80% 60% ALLERGENS 40% 20% J07 - VACCINES L01 - ANTINEOPLASTI C AGENTS N05 - PSYCHOLEPTICS -50% -40% -30% -20% -10% 0% 10% J05-20% 30% 40% L03 - IMMUNOSTIMU LANTS -20% -40% ANTIVIRALS FOR SYSTEMIC USE 0% GROWTH PY vaccines absolutely dominate in the ambulatory purchases; some of the values drops are explained by price decrease caused by new products entry its only antineoplastic which are successful in strong long-term growth, but size of the segment is rather small; biggest segment Antivirals (HIV, Hepatitis) tend to stagnate, though is mainly presented by one product Allergens and Psycholeptics are smaller in size but also pursue strong growth Source: IMS Health database (TRD prices) 16

17 CAGR 3 Years CAGR 3 Years Long/short term (2015/14) growth priorities in purchases for Hospital use, by values, RuR TOP-10 products/molecules short/longterm trends in hospital purchases by INN 25% 20% TRASTUZUMAB TOP-10 groups short/longterm trends in hospital purchases by ATC2 16% 14% 12% L04 - IMMUNOSUPPRES SANTS L01 - ANTINEOPLASTIC AGENTS 15% 10% IOPROMIDE SODIUM BEVACIZUMAB DOCETAXEL 5% PORACTANT IMMUNOGLOBULI ALFA ENOXAPARIN N BASE SODIUM CEFTRIAXONE 0% -20% -10% 0% 10% 20% 30% 40% -5% GROWTH PY 10% J01 - ANTIBACTERIALS FOR SYSTEMIC 8% USE 6% B01 - ANTITHROMBOTI C AGENTS V08 CONTRAST MEDIA N01 - ANESTHETICS J06 IMMUNE 4% SERA&IMMUNOGL B04 - OBULLINS ANTYHEMORROIDS N05-2% B05 - PLASMA PSYCHOLEPTICS SUBSTITUES 0% -5% 0% 5% 10% 15% 20% 25% -2% GROWTH PY Hospital vs Ambulatory purchases has much more diversity and bigger in values of purchase; In the lack of finance increase the purchase efficiency is being transferred to the increase of funding of small number of group/most demanded products, mainly in oncology, anesthesia, transplantology and contrast media Hospital demand keeps constant the trend of purchase growth for Sodium Chloride Docetaxel evolvement outlines that not only new molecules are evolving in Antineoplastic Source: IMS Health database (TRD prices) 17