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Did the war manage to destroy the national pharmaceutical industry?

14 July 2022

The war like a litmus paper helps to determine which industries in Ukraine are strong enough to survive despite the global perturbations.

What does the pharmaceutical market look like in general? It has two big groups of buyers — people buying in the pharmacies and the government buying centrally for hospitals. The share of the pharmacy market is 87% in money at the end of the first quarter of 2022. During the invasion, the state's market share decreased by 4% due to the receipt of a large volume of humanitarian aid, a decrease in the number of people in Ukraine and working hospitals.

The annual market volume in general (retail and hospital purchases) amounted to 1.2 billion packages and 134.8 billion hryvnas in 2021. Compared to 2020, the market grew at a tremendous pace — by 20% in monetary terms for the year. The pharmaceutical market continued to show the growth at the beginning of 2022: 30‒45% in January and February.

The war caused the panic; therefore, people began to make the strategic reserves of the medicines. Accordingly, in the first days of the invasion, sales in the pharmacies increased rapidly, but starting March, the market is declining. Based on the results of five months of 2022, the market decreased to the level of last year in the money equivalent, as for the packages it shows a decline by almost 10% compared to the last year.

The war has also affected the consumption of medicinal products. Before the invasion the market demonstrated a high level of antibiotic use, now it has decreased. On the other hand, the consumption of sedatives increased significantly secondary to the war. Top sales are anti-inflammatory and anti-rheumatic products. In the first month of the war, the use of the medicinal products targeting the cardiovascular (+23%) and nervous system increased, primarily antiepileptics (+56%) and psycholeptics (+51%).

Since the beginning of the year, the state has purchased the medicinal products at the amount of more than 5 billion hryvnas. However, 3.5 billion hryvnas was spent before the war, due to the outbreak of COVID-19. Now the volume of purchases has decreased significantly, however, it is compensated by the humanitarian aid. During the 100 days of the war, the Ministry of Health received 6.5 thousand tons of medical humanitarian aid at the amount of 7.9 billion hryvnas.

What medicinal products are mainly represented on the shelves of pharmacies: foreign or national? You will find a package of the national medicinal product on the shelves in 65% of cases. But foreign manufacturers are mainly represented in the high price segment, so their share in money is 64%.

Most pharmaceutical companies are growing despite the irregular demand, loss of infrastructure, supply disruptions and other complicating factors. The national pharmaceutical company Darnitsa is currently showing the maximum growth — 18.9% in money terms.

Based on the results of survey performed by robota.ua, 90% of pharmaceutical companies in Ukraine help the Armed Forces of Ukraine, the state, volunteers or volunteer themselves. For example, Darnitsa handed over 1.4 million packages of medicines for the needs of the Ministry of Health, medical organizations and charitable foundations.

At the beginning of full-scale military operations, a noticeable shortage of certain medicinal products (such as cardiovascular and systemic products) was observed. However, the logistic activities were fixed quite quickly, and the volume of consumption was restored. Currently, there is no shortage of medicinal products on the market.

Therefore, the national market survived despite the colossal consequences of the war and demonstrates stability in its further development.

The government of Ukraine is implementing a number of measures to support the national manufacturers in order to support the Ukrainian economy and, accordingly, the Ukrainian army. Therefore, the Ministry of Health encourages the Ukrainians to join such an initiative and support the national pharmaceutical manufacturers by purchasing the medicinal products and focus on the Ukrainian-made medicinal products. The Ministry of Health emphasized that Ukrainian medicinal products undergo the same registration procedures and quality control, and therefore are not inferior to the European ones.

*Based on the Proxima Research statistical data

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