Kazakhstan Pharmaceuticals and Healthcare Report Q2 2009

Summary

BMI has adjusted its forecast for the Kazakhstani pharmaceutical market for the period 2008 to 2013, reflecting a downgrade in our exchange-rate and economic growth forecasts over the period. The downgrade comes as the economy weathers the recent fall in commodities prices and the pressures of the global crisis. With a predicted compound annual growth rate (CAGR) of`9.04% over the forecast period, and total value reaching US$1.68bn in 2013, the pharmaceutical market will grow at a slower pace than in recent years . Kazakhstan retains huge potential as one of the least developed markets in Emerging Europe, with per-capita consumption only reaching US$96.0 in 2013. Meanwhile 2009 will likely see an 11.6% contraction in market value in US dollar terms, with 10.2% growth in local currency value.

The economic downturn should reverse by 2010. However, economic uncertainty and government intervention in the sector will slash growth rates for most players in 2009. Currency risks will remain acute and anti-crisis measures will hit margins. If the current bank bailout through the Samruk Kazyna state asset fund succeeds in stabilising the financial sector - until recently one of the most robust in the Commonwealth of Independent States (CIS) - this will improve confidence and operating conditions.

The Kazakhstani government has moved to control pharmaceutical prices following the tengue's recent sharp fall against the US dollar. The February signing of the 'Measures for Preserving the Stability of Medicines Provision' between the government and pharmaceutical industry associations is designed to ensure supplies of medicines and limit price rises. The memorandum agreed to fix prices for 100 commonly used medicines but not already covered by free medical provision. Given the country's overwhelming dependence on imports, price squeezes on retailers and wholesalers are likely to continue.

Health Minister Zhaksylyk Doskaliev announced measures to require distributors and pharmacies to reveal the price at which they purchased any particular medicines. Doskaliev also acknowledged that most medicines would go up in price, when he said in early March 2009 that a 15-25% increase in imported medicines prices was a 'normal' side effect of 'market conditions'. Currency instability coincides with the April launch of its centralised drug procurement system for public hospitals.

Manufacturers and suppliers will be under pressure to absorb price rises and local players like Chimpharm and Romat should benefit at the expense of foreign players.

With many companies racking up 20% to 30% local sales-growth rates in 2008, the rapid slowdown in the economy will slow growth plans. In February, the CFO of Hungary's Egis, controlled by French giant Servier, said CIS growth forecasts for the company ranged between 0% and 15% due to economic uncertainty, especially in Kazakhstan. In one of the few signs of new investment projects, Indian and Kazakhstani leaders and trade officials signed a deal in March to create an Indian-Kazakhstani joint venture to produce pharmaceuticals, although few details of the project have been reported.

Contents

• SWOT Analysis
• Kazakhstan Political SWOT
• Kazakhstan Economic SWOT
• Kazakhstan Pharmaceuticals And Healthcare SWOT
• Kazakhstan - Business Environment Ranking
• Limits of Potential Returns
• Risks to Realisation of Returns
• Kazakhstan - Market Summary
• Regulatory Regime
• Intellectual Property Environment
• Counterfeit Drugs
• Pricing and Reimbursement Regime
• Recent Pricing and Reimbursement Developments
• Industry Developments
• Epidemiology
• Healthcare Sector
• Healthcare Sector Financing
• Domestic Pharmaceutical Industry
• Recent Domestic Industry Developments
• Wholesale and Retail
• Recent Wholesale and Retail Developments
• Foreign Pharmaceutical Industry
• Recent Foreign Industry Developments
• Clinical Trials
• Medical Devices
• Industry Forecast Scenario
• Overall Market Forecast
• Key Growth Factors - Industry
• Key Growth Factors - Macroeconomic
• Prescription Market Forecast
• Prescription Market Forecast
• OTC Market Forecast
• Patented Market Forecast
• Generics Market Forecast
• Export/Import Market Forecasts
• Other Healthcare Data Forecasts
• Key Risks to BMI's Forecast Scenario
• Competitive Landscape
• Company Monitor
• Foreign Companies
• Novartis (Lek & Sandoz)
• Sanofi-Aventis
• GlaxoSmithKline (GSK)
• Nycomed
• Merck & Co
• Pfizer
• Ranbaxy
• Indigenous Companies
• Chimpharm
• Romat FK
• Country Snapshot: Kazakhstan Demographic Data
• Section 1: Population
• Section 2: Education and Healthcare
• Section 3: Labour Market and Spending Power
• BMI Forecast Modelling
• How We Generate Our Pharmaceutical Industry Forecasts
• Pharmaceutical Business Environment Ratings Methodology
• Ratings Overview
• Weighting
• Sources
• List of Tables
  • Table: Central And Eastern Europe Pharmaceutical And Healthcare Business Environment Rankings
  • Table: Price Components And Add-Ons For Imported And Locally Produced Generic Medicines (KZT)
  • Table: Top 10 Manufacturers By Value Of Hospital Purchases
  • Table: Top 10 INNs By Value Of Hospital Purchases
  • Table: Top 10 ATC Groups By Value Of Hospital Purchases
  • Table: Top 10 ATC Groups By Retail Pharmacy Sales
  • Table: Pharmaniaga's Key Products
  • Table: Medical Devices Market In Kazakhstan, 2006-2008 (US$mn)
  • Table: Kazakhstan's Drug Expenditure Indicators, 2004-2013
  • Table: Kazakhstan's Health Expenditure Indicators, 2004-2013
  • Table: Kazakhstan - Economic Activity
  • Table: Kazakhstan's Prescription Market Indicators, 2005-2013 (KZTmn unless otherwise stated)
  • Table: Kazakhstan's OTC Market Indicators, 2005-2013 (KZTmn unless otherwise stated)
  • Table: Kazakhstan's Patented Drug Market Indicators, 2004-2013
  • Table: Kazakhstan's Generics Market Indicators, 2004-2013 (KZTmn unless otherwise stated)
  • Table: Kazakhstan's Pharmaceutical Trade Indicators, 2004-2013 (US$mn unless otherwise stated)
  • Table Retail Sales Structure Of Imports By Pharmaceutical Subgroups, 2006
  • Table: Top 15 Distributors By Value Importing Pharmaceuticals Into Kazakhstan, 2006
  • Table: Top 15 Distributors By Volume Importing Pharmaceuticals Into Kazakhstan, 2006
  • Table: Kazakhstan's Other Healthcare Data, 2004-2013
  • Table: Top 10 Manufacturers By Retail Pharmacy Sales
  • Table: Top 10 Trade Names By Value Of Retail Pharmacy Sales
  • Table: Demographic Indicators, 2005-2030
  • Table: Rural/Urban Breakdown, 2005-2030
  • Table: Education, 2002-2005
  • Table: Vital Statistics, 2005-2030
  • Table: Employment Indicators, 1999-2004
  • Table: Consumer Expenditure, 2000-2012 (US$)
  • Table: Average Annual Wages, 2000-2012
  • Table: Pharmaceutical Business Environment Indicators
  • Table: Weighting Of Components