Ukrainian pharmaceutical market

Ukraine:in prospect
September 2010

Definitions

ATC EphMRA classification for pharmaceuticals (ATCs are the intellectual property of EphMRA(European Pharmaceutical Market
Research Association), and are used to assess products’ dynamics against similar products) and own SMD classification
worked out for non-pharmaceuticals
Big Pharma the top twenty pharmaceutical companies and their two trade groups, Pharmaceutical Research and Manufacturers of
America (PhRMA) and Biotechnology Industry Organization
CIS Commonwealth of Independent States. A regional organization, whose participating countries are former Soviet Republics,
formed during the breakup of the Soviet Union. CIS countries: Republic of Belarus, the Russian Federation, Ukraine,
Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Moldova, Turkmenistan, Tajikistan, and Uzbekistan
Consumption final purchase of goods and services by individuals/consumers
Generic company company that produces and/or sells generics
Generic drug a medicine containing the same active ingredient in dosage form, safety, strength, route of administration, quality,
performance characteristics and intended use as a particular originator drug and is not (or no longer) patent-protected
GMP Good Manufacturing Practice, a part of a quality system covering the manufacture and testing of active pharmaceutical
ingredients, diagnostics, foods, pharmaceutical products, and medical devices
Originator company a corporation which holds the patent for the active ingredient of the product
Original drug a novel drug that was under patent protection when launched onto the market for the first time
Public Price Level price which is used to sell the product from the pharmacy (POS) to the final consumer. Pharmacy (POS) sales-out price level
(Consumer Prices)
Trade Price Level price which is used to sell the product from a distributor/wholesaler to a pharmacy (pharmacy purchase price)
(PPP)

A. CIS Region
B. Ukraine Pharma Market
C. Forecasts

CIS Region
Abstract

In Brief

The CIS is comparable to a very loose
association of states and in no way
comparable to a federation,
confederation or supra-national
organization such as the old European
Community
Belarus
It is more comparable to the
Moldova
Commonwealth of Nations. Although the
CIS has few supranational powers, it is more
Ukraine Russian Federation
than a purely symbolic organization,
possessing coordinating powers in the realm
of trade, finance, lawmaking, and security Georgia
Armenia
Azerbaijan
Kazakhstan
Kyrgyzstan
• Total GDP is ~ $1.6 trillion (est. 2009) Uzbekistan
• GDP Growth Rate = 4.3% (IMF Forecast)
• Population is ~276 mln people (est. July 2009)
Turkmenistan Tajikistan

The International Monetary Fund (IMF) has raised forecasts
for economic growth in CIS countries in 2010 up to 4,3
percent
Source: Eurostat, IMF, CIS Statistic Committee, SMD "World Economic Outlook"

CIS Pharmaceutical Market
Executive Summary

Although the original drugs market in CIS will develop at a slower rate than that of generic drugs
between 2010 and 2011, the growth rate of original medicines for the whole region will be positive.
It has, for the time being, been compromised by the cost-containment policies of the CIS countries,
which have been stepped up during the global financial crisis.

The global financial crisis left its footprint on the CIS Pharma market however the impact is dependant on the level
of each country's health system development. In CIS countries where there is no reimbursement system there
were remarkable changes in consumer behavior. In particular, increased price sensitivity with a switch to cheaper
medicines and generic products although not significantly.

Indian pharma companies have increased their momentum in these markets through a spate of mergers and
acquisitions, new tie-ups, setting up of joint ventures and subsidiaries. Some of these companies are making
investments in terms of JVs and manufacturing facilities in Russia, Ukraine and Uzbekistan, for instance. Some
individual companies are also looking at collaboration with local institutions or companies in R&D.

A number of consolidation processes recently took place in The pharmaceutical market in CIS region is
the generic arena, which were of great importance for the CIS dominated by generic drugs. Market
region. For example, Israel’s Teva gained a strong presence in structure and key players are different from
the region through the acquisition of Barr in July 2008, which those in western markets.
included one of the largest local generic drug producers - the Rx vs. OTC ratio is almost 50/50. OTC
Croatian company Pliva. segment traditionally is more developed
than in western markets
Source: SMD, Sept 2010, EB

CIS Pharma Market
Features
• Mainly the biggest countries, except Russia (DLO/7) is out of pocket markets. Where more than 80% is
covered privately by patients.

• Almost absence of reimbursement / obligatory medical insurance (except Moldova and of rudimentary
level in Kazakhstan and Georgia) – possible introduction in two / three years. (Russia and Ukraine are
discussing the introduction of a system of public health insurance, which has been under discussion in
Ukraine since at least 1996)

• Still according to Constitutions medical help used to be free of charge to the population. In practice a
considerable amount of hospital treatments are compensated by governments.

• These markets are largely generic markets – approximately 85% is covered by brand generic products.

• However originator companies (patented Rx) are drivers of the market.

• Price difference between original (patented) and generic products is much lower than in mature
markets

• Strong local production, mainly historically concentrated in Ukraine (makes 65% of consumption in units
and 30% in values in 2009)

• Big Pharma have not included these markets in their patent exclusivity list – the consequence is that
there are a lot of generics available for products currently covered by patent (e.g. Viagra, Liprimar) in
Western countries


CIS Pharma Market
Dynamics
Ukraine;
Pharma Market
Population,
11.41% mln people CIS Values (USD),
mln Y2009
Russia* (incl. DLO,
Russia* (incl. 145,5 17 500
hospital)
DLO, hospital) ;
74.81%
46,7 Ukraine 2 674
16,9 Kazakhstan 975
10,4 Belarus 653
22,1 Uzbekistan* 520
7,4 Azerbaijan 240
5,4 Georgia 235
Kazakhstan ; 4.17% 4,4 Moldova 179
Tajikistan**; 0.43%
Belarus ; 2,79%
Uzbekistan*; 2.22% 3,7 Armenia* 112
Turkmenistan**; Azerbaijan ; 1,03% 4,5 Kyrgyzstan** 110
0.43% Georgia; 1.00% 4,4 Turkmenistan** 100
Moldova; 0.77%
Kyrgyzstan**; Armenia*; 0.48% 5,7 Tajikistan** 100
The pharmaceutical market 0.47% 277,1 Total 23 018
is driven by factors such as Source: SMD, *Pharmexpert, **SMD estimation
ageing population,
increasing demand for
CIS emerging Pharma Market
imported and expensive
medicines, and increasing (only medicines) made $23 bln
Growth Rate approx. [-5%]
disposable incomes in 2009 at TRADE price level,
in USD in 2009 (TRADE price
which is equal to $28 bln in
level), compare to growth in
PUBLIC price level
2008 of +20% in USD as an
impact of the crisis

Ukraine Territory
Ukraine is the largest country in Europe
in terms of territory. It covers a territory
Country Profile of 603,7 thousand square kilometers.
(France is the second largest country on Russia
the continent with a territory of 544
thousand square kilometers).
Pharma Trends
The pharmaceutical industry is a fast Ukraine has bilateral relationships with many
growing sector of the national economy. countries all over the world. Despite getting its
As one of the largest markets in Europe independence only less than 20 years ago
there exist greater tendencies for large (August 24, 1991), it is emerging as a major
financial turnovers. Today Ukraine is player in trade and industry in Eastern Europe.
one of the biggest consumer markets in Its pharmaceutical industry is in need of help at
Europe. There are national the moment and this makes it a good time for
pharmaceutical factories that produce foreign pharmaceutical companies to step in.
medicines for local consumption. Ukraine
However, the production doesn’t match
market requirements. Population
In terms of population Ukraine is one of
the largest in Europe. Ukraine has a
Such products must be imported from foreign population of ≈46 million people. It is one
manufacturers to supplement the local market of the biggest consumer markets in
needs. However, before importation, foreign medical Europe. Population density is about 77
products must be registered with the State Health people per sq. kilometer. Approximately
Ministry. The latest statistics confirmed that the 77.8% of the population are ethnic
actual annual supply of essential imported medical Ukrainians and 17.3% ethnic Russians. The
products is far less than the demand. remaining 4.9% of the population includes
ethnic Poles, Jews, Bulgarians, Tatars,
Hungarians, Romanians, Greeks, and other
nationalities Ukraine surrounded in the east by the
Trends Russian Federation, in the north by
Whilst Ukraine was hit hard by the economic crisis, the economy is expected to recover in 2010. The Belarus, in the west by Poland, Slovakia
market is driven by strong import growth; imports rose by a CAGR of 34.0% over 2004-2008. Import and Hungary, in the south west by
growth is expected to remain strong due to a lack of locally manufactured innovative products. The Moldova and Romania, and in the south
pharmaceutical market will grow more rapidly if the government will manage to implement an Ukraine by the Black Sea.
effective health insurance system, which has been under discussion for several years Location


Ukraine
Economic Outlook

Ukraine benefits from a consumer market of approximately
46.01 million people, and enjoys an opportune geographical
location, a mild climate, a rich natural resource base, a highly
educated labor force, a well-developed transport
infrastructure, and a well-developed tradition of scientific
research and development. Despite the fact that Ukraine has
experienced steady economic growth over the past five years,
the country faced serious challenges in sustaining the negative
consequences of the world economic crisis and remains in need
of investment in all sectors of industry, with many industrial
plants unable to meet current consumer demand. Ukraine
The Ukrainian financial sector has undergone substantial changes and improvements in the
past several years with an effective regulatory framework being progressively created and
a modern financial system, based on market principles, steadily emerging. However, like in
other economies, Ukrainian financial sector is experiencing the negative effects of the
world financial crisis.
The National Bank of Ukraine and the government are implementing a number of
measures in order to fight the negative consequences of the world financial crisis. Such
Financial Sector measures, inter alia, include recapitalization of Ukrainian banks, limitation of the outflow
of capital from Ukraine and facilitation of the performance of debt obligations by
Ukrainian borrowers.

Foreign Trade
The core export categories including ferrous and non-ferrous metals and
metal products; chemical products; fertilizers; plastics and rubber;
agricultural products and foodstuffs; engineering goods; various types of
machinery and equipment (including various types of transport vehicles);
textiles; and a wide variety of raw materials.

Ukraine Pharma Market
Features. Retail + Hospital

The lowest per capita medicine
The Ukrainian retail Domestic consumption among CEE countries,
pharmaceutical market Drugs price producers development of medical insurance
is one of the fastest structure shifts traditionally and possible introduction of
growing markets in to higher focus on reimbursement system evidence
Europe, growth fueled segments high growth potential of the
cheap mass
by the increase in market after economy recovers
products
average price per pack

Benefits of
Market is dominated pioneering the
by foreign companies market remain as The market is
in value (USD) (75.3% no global or free of VAT
in 2009) regional player
has invested yet

Financial crisis also
resulted in significant Healthcare
Total Market Increasing of
decrease in capital Expenditures
CAGR is more Healthcare
expenditures, making CAGR is
greenfield than 16% expenditures to 4.2%
~18.5% of GDP in 2010
development a viable
alternative
Source: SMD [Sept 2010, EB], Roland Berger

Features. Retail + Hospital (cont)
MARKET SHARE OF TOP-10 MARKET SHARE OF TOP-10 COMPANIES IN
COMPANIES IN UKRAINE OTHER COUNTRIES
[USD, 2009]
More than 800 companies 59%
operate in Ukraine ø ~54% 53%
51%

Ukraine
33%

20%

Major pressures for Ukrainian producers
1. Financial
TOP-5 TOP-10 World USA UK • No access to cheap funds for operations and growth;
• Liquidity problems trigger sales of assets
2. R&D
• Fragmented nature of the Ukrainian pharmaceutical • In view of Ukraine’s accession to WTO, some manufacturers
market allows an unimpeded entry will need to seriously redesign their portfolio as cheap copying
of patented drugs becomes impossible in Ukraine
3. Technological
• Although Ukraine represents a potentially major and • Introduction of GMP requirements (now postponed till
lucrative pharmaceutical market, most domestic 2011) will require an investment of 1 to 18 million USD per
manufacturers are very small and focus on the production production line
of older drugs. Pharmaceutical manufacturing remains vulnerable to counterfeiting and low
quality generic production. But this reluctance to enforce standards is counter-
productive - the net result is that consumers often turn to branded generics made
by foreign manufacturers with a reputation for quality and reliability
Source: Datamonitor, IMS, Nomura, Roland Berger, SMD [Sept 2010, EB]

Key Data. Retail + Hospital
2.9 2.7
2.3
1.9
• Market value - $2.7 bln 0.8 1.1
1.5

(public price level) Source: SMD, Sept 2010, EB 1.3 1.3
2003 2004 2005 2006 2007 2008 2009 1 HY 2009 1 HY 2010

2.1 2.0
1.4 1.7
1.2
• Average cost of a pack: $2.24 0.8 0.9 1.9
2.2
(public price level)
2003 2004 2005 2006 2007 2008 2009 1 HY 2009 1 HY 2010

62.0 58.5
49.4
40.1
32.4
• Annual consumption per capita 16.8 22.3
27.6 28.9
(USD, public price level) Source: SMD, Sept 2010, EB

2003 2004 2005 2006 2007 2008 2009 1 HY 2009 1 HY 2010

76.0% 75.7%
75.3% 74.1%
• Foreign manufacturers’ market share 71.1%
73.8% 74.7%

68.5%
(value: [USD], public price level) 66.2% Source: SMD, Sept 2010, EB

2003 2004 2005 2006 2007 2008 2009 1 HY 2009 1 HY 2010


Total Pharma Market
Dynamics & Structure
Values: [USD]

CAGR in 2004-
Values, mln USD 2007 2008 2009
2009, USD [%]
Drugs, Retail 1 762 2 199 2 055 16.7
Drugs, Hospital 239 324 245 9.1
Cosmetics & Personal Care Products 91 131 129 37.9
Biologically Active Nutrition & Self Medication 71 111 102 30.7
Patient Care Products 120 154 150 16
Total in Pharmacy Purchase Price 2 283 2 919 2 681 16.8
Total in Final Consumer Price 2 740 3 438 3 168 16.8

5.3 5.6 Patient Care products
100% 3.8
4.5 3.8
90% 4.8
11.1 9.1 Biologically active
80% Medicines make 85,8% in 2009. They lost
nutritions & self
70% medication market share vs. 2008 of 86,4% due to
60% Cosmetics & personal better performance of other sectors
50% 75.3 care products
76.7
40%
30% The Ukrainian retail pharmaceutical market is
Medicines Hospitals
20% one of the fastest growing markets in
10% Europe, growth fueled by the increase in
0% average price per pack
Medicines Pharmacies
2008 Roland Berger Strategy Consultants
2009


Ukrainian Total Pharma Market
CAGR of Market Sub-Sectors in 2004-2009
Values: [USD]
The best trends are in cosmetics
40% 37.9% and bioactive nutrition & self
medications
All market segments have 35%
30.7%
more than +16% CAGR in USD
30%
[Except Hospital segment
with its +9%] 25%

20%
16.7% 16.0% 16.8%

15%

9.1%
10%

5%

0%
Hospital segment has the worst Source: SMD, Sept 2010, EB
Medicines Medicines Cosmetics & Biologically Patient Care Total Pharma
dynamic due to problems with state Pharmacies Hospitals personal care active products Market
financing. However, healthcare products nutritions &
expenditures increasing to 4,2% of self medication
GDP in 2010 would affect this
segment positively
Financial crisis also resulted in significant
decrease in capital expenditures, making
greenfield development a viable alternative
Roland Berger Strategy Consultants

Total Pharma Market
Dynamics & Structure
Values: [UNITS]

CAGR in 2004-
Values, mln UNITS 2007 2008 2009
2009, UNITS [%]
Drugs, Retail 1 372 1 386 1 345 4.0
Drugs, Hospital 127 143 103 -3.1
Cosmetics & Personal Care Products 46 53 57 18.6
Biologically Active Nutrition & Self Medication 47 55 59 20.1
Patient Care Products 608 691 636 5.4
Total Pharma Market 2 200 2 328 2 200 3.7

Patient Care products
100% Cosmetics & Personal Care Products and
90% 29.7%
Biologically Active Nutrition & Self
28.9%
80% 2.4%
Biologically active nutritions
Medication segments have good
2.7%
70% 2.3% 2.6% & self medication development indicators
60% 6.1% 4.7%
50%
40%
Cosmetics & personal care Medicines volume grow stable year-
products
30%
59.5%
61.1% over-year together with weighted
20%
Medicines Hospitals
average cost per pack raising and
10% medicines' price range shifting to
0%
higher segments
2008
Medicines Pharmacies
2009


Ukrainian Total Pharma Market
CAGR of Market Sub-Sectors in 2004-2009
Values: [UNITS]

25.0%

Volumes of retail pharmacies’ 20.1%
20.0% 18.6%
purchases in UNITS has
stagnating trend due to
reduction of low-cost old drugs 15.0%

10.0%

5.4%
5.0% 4.0% 3.7%

Cosmetics & personal care 0.0% Source: SMD, Sept 2010, EB
products together with
Biologically active nutrition & self -5.0% -3.1%
medication raise well both in Medicines Medicines Cosmetics & Biologically Patient Care Total Pharma
USD and Units Pharmacies Hospitals personal care active products Market
products nutritions & self
medication


Original Medicines Development
Period: [2003-2009]
Values: [USD]

30%
24.5%
Original 2007 2008 2009 CAGR, % 25%

20% 17.8%
14.8%
UNITS, mln 33.3 37.3 33.3 10.4 15%
10.4%
USD, mln 223.5 284.8 251.8 17.8 10%

5%
UAH, mln 1 129.7 1 493.4 1 974.1 24.5
0%
EURO, mln 162.8 195.2 181.1 14.8 UNITS USD UAH EURO

Original Medicines. ATC 1 Level Development [USD]
C Cardiovascular system Market Share, % CAGR, %
USD
[2009] [2003-2009]
24% G Genito-urinary system C Cardiovascular system 23.6 22.2
27%
and sex hormones G Genito-urinary system and
13.3 17.2
A Alimentary tract and sex hormones
13% mtabolism A Alimentary tract and
12% 12.4 15.0
R Respiratory system
metabolism
12% 12% R Respiratory system 12.2 21.4
J General anti-infectives
J General anti-infectives 11.5 15.5
systemic
systemic
Others 26.9 16.2
Source: SMD, Sept 2010, EB Others


Period: [2003-2009]
Values: [UNITS]

30%
24.5%
Original 2007 2008 2009 CAGR, % 25%

20% 17.8%
14.8%
UNITS, mln 33.3 37.3 33.3 10.4 15%
10.4%
USD, mln 223.5 284.8 251.8 17.8 10%

5%
UAH, mln 1 129.7 1 493.4 1 974.1 24.5
0%
EURO, mln 162.8 195.2 181.1 14.8 UNITS USD UAH EURO

Original Medicines. ATC 1 Level Development [UNITS]
C Cardiovascular system
Market Share, % CAGR, % 11% 10%
UNITS
[2009] [2003-2009] 24% R Respiratory system
12%
C Cardiovascular system 27.5 9.1
S Sensory organs
R Respiratory system 16.0 15.2
S Sensory organs 11.7 12.9 16%
J General anti-infectives
J General anti-infectives 27% systemic
10.7 14.3
systemic A Alimentary tract and
A Alimentary tract and mtabolism
9.9 6.8 Others
metabolism Source: SMD, Sept 2010, EB
Others 24.1 8.2


Forecast Period: [2010-2015]
Values: [USD, mio]
600
48.1%
60% The Market is to be grown by
488
500
50%
$0.5 bln during next 5 years
40%
29.6%
400 27.4% 26.5%
30%
20.8%
20.7%
300 252 20%
10.6% 9.6% 8.8% 8.1% 7.5%
10%
200
0%
100
80
-11.6% -10%
0 -20%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Original Medicines Rx [USD] Original Medicines Rx [USD; PPG, %]
70 40%
33.2%
59
2009-2015 60
24.2% 30%
20.2%
CAGR ~10-12% in USD 50
20%
11.3% 12.0% 12.1%
40
33 8.3% 7.6% 7.1% 6.6% 6.2% 10%
30
0%
20 17

10 -10.8% -10%

0 -20%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Original Medicines Rx [UNITS] Original Medicines Rx [UNITS; PPG, %]


Ukrainian Pharma Market
Leading Originator Companies. Retail + Hospital [Rx]
Values: [USD, UNITS]. Price level [TRADE]
9.9 9.8
USD, mln Market 8.1 8.1 8.7
PPG, % 7.3
2009 Share, % 6.2 9.8 10.1
Total Market 336.9 -9.4 100.0
Servier Group 46.3 -12.3 13.8
Sanofi-Aventis Group 45.6 -19.3 13.5
Glaxosmithkline 37.8 -12.0 11.2
Roche 25.6 235.4 7.6 2003 2004 2005 2006 2007 2008 2009 1 HY 1 HY
Pfizer Incorporated 24.3 -20.6 7.2 2009 2010
Merck Sharp Dohme 22.6 6.6 6.7
Bayer Healthcare 21.2 -1.1 6.3 • Average cost of a pack: $10.1
Boehringer Ingelheim 18.0 -19.2 5.3
Novartis 15.5 -8.2 4.6 (public price level)
Alcon 12.5 2.1 3.7
Others 67.5 -22.8 20.0
• TOP-5 Corporations control over
UNITS , mln
PPG, %
Market 50% of market share in USD
2009 Share, %
TOTAL MARKET 36.1 -12.0 100.0
Glaxosmithkline 6.7 0.5 18.5
Servier Group 5.5 -10.7 15.1
Alcon 2.4 -16.1 6.6
Novartis
Bayer Healthcare
2.3
1.7
-10.8
-1.3
6.4
4.6
• TOP-10 Corporations control about
Merck Sharp Dohme 1.6 -17.8 4.5 90% of market share in units
Boehringer Ingelheim 1.6 -19.3 4.4
Astellas 1.5 -5.4 4.2
Pfizer Incorporated 1.3 -26.0 3.7
Other 4.0 -13.4 10.5

Leading Generic Companies. Retail + Hospital. [Rx]

USD, mln Market
PPG, % 1.4 1.4
2009 Share, % 1.1
Total Market 980.5 -11.0 100.0 1.0 1.5
Menarini Group 57.7 -3.8 5.9
0.8 1.3
0.5 0.6
Arterium 48.4 -20.9 4.9
Darnitsa Pharma 46.2 -18.9 4.7
Nycomed 45.5 -1.1 4.6
Zdorovje Group 42.7 -2.1 4.4 2003 2004 2005 2006 2007 2008 2009 1 HY 1 HY
Gedeon Richter 37.6 -10.3 3.8 2009 2010
KRKA 36.9 -13.0 3.8
Farmak JSC, Kiev 30.5 -0.7 3.1 • Average cost of a pack: $1.5
Yuria Ukr 24.9 3.8 2.5
TEVA 24.6 -5.7 2.5
(public price level)
Other 585.5 -12.4 59.7

UNITS, mln Market • Low-priced domestic drugs
PPG, %
2009 Share, % cover over 45% of local market in
Total Market 494.6 -8.3 100.0
Zdorovje Group 57.3 -1.3 11.6 units
Arterium 46.6 -4.9 9.4
Yuria Ukr 26.3 18.0 5.3 • Generic market is more
Borschagovsky Chimfarm 24.1 0.4 4.9
Genom Biotech India 18.9 8.4 3.8 fragmented both in USD, and in
Farmak JSC, Kiev
Menarini Group
17.2
11.9
7.7
-5.1
3.5
2.4
units than Innovative one
Gedeon Richter 9.2 -19.2 1.9
KRKA 8.8 -8.5 1.8
Other 220.5 -14.3 44.6

Leading Companies. Retail + Hospital

USD, mln Market
PPG, % 76.0% 75.3% 75.7% 74.1%
2009 Share, % 73.8% 74.7%
71.1%
Total Market 2 293.6 -9.4 100.0 68.5%
Menarini Group 104.2 -7.3 4.5 66.2% Source: SMD, Sept 2010, EB
Sanofi-Aventis Group 99.4 -15.6 4.3 2003 2004 2005 2006 2007 2008 2009 1 HY 20091 HY 2010
Novartis 86.6 -13.7 3.8
Farmak JSC, Kiev
Darnitsa Pharma
77.4
69.0
4.7
-15.7
3.4
3.0
• Foreign manufacturers’ market share
Servier Group 63.0 -13.7 2.7 (value: [USD], public price level)
Arterium 62.0 -19.1 2.7
Bayer Healthcare 60.4 -11.2 2.6
Glaxosmithkline 60.1 -6.4 2.6
Nycomed 58.6 1.2 2.6
Other 1 553.1 -8.9 67.7 • TOP-10 Foreign companies control
UNITS, mln Market over 30% of market in USD
PPG, %
2009 Share, %
Total Market 1 447.7 -5.3 100.0
Farmak JSC, Kiev.
Zdorovje Group
103.0
93.4
-0.4
-1.0
7.1
6.5
• TOP-10 Local companies cover over
Arterium 76.4 -5.1 5.3 45% of retail market in UNITS
Borschagovsky Chimfarm 55.9 -5.1 3.9
Kiev Vitamin Factory 46.0 -1.9 3.2
Yuria Ukr 26.9 18.4 1.9
Zhitomir FF Ukr 25.0 19.4 1.7
Other 768.9 -8.1 53.1

Leading OTC Companies.

USD, mln
PPG, %
Market • OTC segment CAGR is more
2009 Share, %
Total Market 957.9 -7.0 100.0
than 19% (2003-2009) in USD
Novartis 50.1 -13.8 5.2
Farmak JSC, Kiev 46.2 9.1 4.8
Bayer Healthcare 38.2 -15.6 4.0
Omega Pharma Group 28.5 -0.9 3.0 • 9 of TOP-10 OTC companies are
Interchem Ukr
Darnitsa Pharma
22.6
22.3
48.3
-7.1
2.4
2.3
Ukrainian ones, covering more
Bionorica 22.2 -0.4 2.3 than 45% of market in UNITS
Glaxosmithkline 22.0 4.7 2.3
Other 622.9 -8.3 65.0

UNITS, mln Market
PPG, %
2009 Share, %
Total Market 903.7 -2.9 100.0 • Foreign companies are
Darnitsa Pharma 142.1 3.4 15.7
Farmak JSC, Kiev. 84.5 -1.5 9.4
controlling 25% of market in
Kiev Vitamin Factory 39.7 -0.3 4.4 money terms
Zdorovje Group 35.2 -0.5 3.9
Borschagovsky Chimfarm 31.2 -9.0 3.5
Arterium 29.4 -4.4 3.3
Zhitomir FF Ukr 22.8 25.7 2.5
Ternopharm Ukr 21.9 7.8 2.4
Lektravi Zhitomir 21.0 6.6 2.3
Fitofarm Artemov 19.6 -0.8 2.2
Other 456.2 -6.7 50.5

Retail. Forecast for 2010-2012
Values: [USD, bln]. Price level [TRADE]

• After the decline of 3.0 50%
44.2%
the retail Pharma market

bln
in 2009 during crisis, we 40%
2.5
foresee stabilization in
2010 and growth in 30%
Values from +5% to 2.0 22.5%
24.8%

+11% in coming periods 23.1%
20%

1.5 11.0%
9.0%
• We used currency 6.0%
10%

exchange rate for USD 8,
1.0
based on a margin of 7,9 0%

– 8,3 per $1
-6.8%
0.5 -10%
2004 2005 2006 2007 2008 2009 2010 (f) 2011 (f) 2012 (f)

USD (ths) PPG


Retail. Forecast for 2010-2012
Values: [UNITS]

• The market was hit 1.5 14%

bln
hard by the crisis 1.4 11.5%
12%

declining the pharma 10%
1.4
market in units during 8%
2009 fall till mid 2010 1.3
6%
4.2%
1.3 4%

• The main trend was in 1.2 3.6% 2.2% 2%
1.0%
shifting price segments 0%
1.2
to more expensive -1.0% -2%
levels declining of old 1.1 -3.0%
-4%
domestic drugs
1.1
amounts in pharmacies -5.5%
-6%

purchases 1.0
-8%
2004 2005 2006 2007 2008 2009 2010 (f) 2011 (f) 2012 (f)

Units (ths) Growth in Units


Hospital. Forecast for 2010-2012
Values: [USD, mln]. Price level [TRADE]
• Healthcare expenditures
• Hospital segment 400 CAGR is ~18.5% [2006-2010] 50%

development mainly 39.1%
37.1% 40%
depends on governmental 34.2%
350
healthcare expenditures 30%

• Based on dynamic of its 300 20%

development, we foresee 9.0%
10%
stabilization of Hospital 11.8%
250 8.3% 8.3%
market in 2010 with 0%
further visible growth
200 -10%

-20%
150
-30%
-26.9%

100 Source: SMD, Sept 2010, EB
-40%
2004 2005 2006 2007 2008 2009 2010 (f) 2011 (f) 2012 (f)


SMD (Support in Market Development) - is a leading provider of market research, sales
management and forecasting services to the pharmaceutical industry.

Researches of:
· Pharmaceutics establishments' purchase and sale audit
· Hospital establishments' purchase audit
· Second distribution audit
· Import medicine analyses Ukraine, 03680
· Doctor prescription analyses Bojenko str., 86i, Kiev
· Ad Hoc research tel/fax: +38 044 206 17 17
e-mail: office@smd.net.ua
· Analytical services
http://www.smd.net.ua

Ukraine:in prospect
September 2010

Ukrainian pharmaceutical market

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