Who makes a pill

The whole territory of the USA "cover" for about forty drug suppliers, Russia - about a thousand. Such figures lead director of the Russian office of Cegedim Strategic Data David Melik-Guseinov. Volume markets also differ in times: in Russia - about $ 18 billion (2010, DSM Group), in the U.S. - $ 310-320 billion (2010 forecast IMS Health). In late 2009, the Interior Ministry after an extensive inspection of the Russian pharmaceutical market has offered to attend to decrease the number of "pharmaceutical companies engaged in wholesale distribution." Even then, in 2009, the coexistence of so many farmdistribyutorov was nonsense. But after the tightening of price controls in early 2010, when the state recorded a maximum premium suppliers on the third range, it has become almost an economic miracle. But the fact remains that after the introduction of price regulation, the number of wholesalers has changed, but not essential. In mid-March, FAS has produced an overview of the wholesale pharmaceutical market, which stated that the number of distributors is reduced, but still slower than expected. "Since the introduction of a new order pricing has been insufficient time", - explained in the report. According to the service, the number of companies licensed to wholesale drugs from 2004 to 2010 is in the range 2-2.2 thousand are actually working about 900-950 distributors, other companies are engaged in other activities, says the director of research "Pharmexpert" Nikolai Bespalov. In this case there are regions where the largest distributors do not have a substantial share, according to FAS, for example, the leaders of the wholesale pharmaceutical market of the Republic of Tuva - the company "agricultural resources" and "Arrow", Adygea - "Russian Troika" and SUE "Pharmacy basis" to survive the biggest. None of pharmaceutical manufacturers will not ship the drugs are not something that thousands - even hundreds of suppliers. Astra Zeneca, for example, is working with 26 buyers, wholesalers, most of which are in the top 20, says commercial director Andrew Betrothed. More than 90% of sales of Nycomed in Russia is on the 10 vendors, "From the standpoint of pharmaceutical product range, we are quite satisfied with the interaction with the six national distributors: AAI," Protek "Growth," Catren, "" Moron "and the Alliance Healthcare, - explains commercial Director of Nycomed in Russia Hilarion Boyko. - Tender for hospital-business suppliers of essential specialized "Farmimeks", "Euroservice", "Empire-Pharma", "Biotec" and some others. " Nycomed sales growth in Russia compared to before last year was 30%, so the strategy of distribution, most likely, is correct, is pleased with Hilary Boyko. That is why the concentration in the field of direct sales (ie delivery from the manufacturer to the pharmacy or hospital) is very high: according to "Pharmexpert" for 2010 in the ten largest companies accounted for 85.4% of the market (in 2009 - 78.4%) , of which the leader - "Protek" - 19.06% (2009 - 18.38%). What do the companies that are not in the top twenty? Mainly reselling drugs. Accurately estimate the amount of the secondary market is unrealistic, said Nikolai Bespalov, but will probably now be resold approximately 20-30% of medicines. Reduce the number of intermediaries called on the Interior Ministry in the wake of anti-rising prices for medicines in 2008-2009: the company at a premium resale products to each other, artificially increase the length of the supply chain and, consequently, wind the price. Exactly for this reason that the "resellers" are reluctant to interact with large drugstore chains, "First Aid" has been working with small suppliers out of the top 20, but the volume of shipments is very small - recognizes the general director of "first aid" Alexander Semyonov. - The reason is simple - small vendors essentially lose the market leader in price competition. " "The main supplier of" Rigla "- CV" Protek "(both companies are in the group" Protek ")", - says CEO Andrei Gusev pharmacy network. The retailer is also working with other major distributors. "They provide almost all of our procurement range," - says Andrey Gusev. However, small suppliers can provide services that do not provide the large distributors. "For example, price fixing by a particular manufacturer or the list of goods for a long time" - recognizes the Director General of the network "36.6" Valeria Solok. According to FAS, the average Russian chemist works with eight suppliers of drugs. Theoretically, by early 2011 the number of "resellers" should have been significantly reduced: such predictions do analysts and industry, and market participants. The reason - the tougher government regulation of drug prices and fixing the maximum possible distribution and retail margins on products made in the list of vital and essential (about half of the pharmaceutical market in the light of government programs). Of fundamental importance was not the restriction itself margin - it is formally limited to the past. The novelty lay in the fact that the regions have access to information on registered producers selling prices. So, if before the local authorities could check mark only the last supplier in the chain (before the drug could have resold several times), you now have the opportunity to see how much getting more expensive drugs on the way from manufacturer to pharmacy. Price regulation was bad news even for the market leaders: margin, which is a distributor and so small (on drugs - an average of 5-6%, but may vary depending on the segment, said David Melik-Guseinov), "collapsed" at all recognize pharmacists. Beginning in 2010 (the new price control has earned since April), the mass hysteria remember: the major players struggled with one problem - how to get the maximum mark-ups, with no one sharing. All promised "crumbs" from the regions of resellers a quick death. But they survived. Buoys. Market participants are referred to a variety of reasons that suppliers of drugs with small stores and tiny turnovers continue to exist. Corruption, an enormous territory, which must cover the supply, as well as underdevelopment of the Russian pharmaceutical market in comparison with European and U.S. markets - and this is a partial list. "Russia - the country arrangements. If a small supplier understands how to sell on a particular narrow market - it sells "- says a former employee of one of the largest Russian farmdistribyutorov. "The weak market" there may be anything - a particular bolnichka, district, region or a particular group of drugs. Most of the wholesale companies on the market, does not work in the commercial segment (the so-called supply at the pharmacy), and one way or another connected with the supply to various government agencies, explains Nicholas Bespalov. "It's distributors, supplying goods to the various departments into separate military warehouses and so on - he says. - This layer is often called the company "pocket," as they enter the sphere of interests of officials at various levels. And their numbers may be reduced only in the event of real anti-corruption measures. " The documents posted on websites of the regional government order, confirm that local wholesalers are actively cooperating with the government. For example, most drug suppliers in the Voronezh region in 2010 - the federal "Protek" and "P-Pharm," but also received orders of Voronezh "Logos-farm", "Medfarm", "Aroma" and several other local players. In the Vladimir region, except for federal companies, drugs delivered to a local "Medass" and "atoll" and company "Solex" of Ivanov. State customer has the opportunity to make the tender documents so that she could only win a certain company, no matter what price it will offer, recognizes employee of the Committee on Health of one of the major Russian regions. Affiliations of the regional farmdistribyutorov closely associated with the various regional authorities, is one of the major challenges of competition in the wholesale market, says FAS. But to say that corruption - the only reason for the participation of smaller players in the state order, too, can not, according to regional officials. Large operators are unable to track down every request for quotations, it is easier to negotiate with the local logistics, so they prepared all necessary documents for submission of tenders. "Issues of the prices here go by the wayside," - he said. There is another reason for the appearance of unknown players in the auction, mostly regional. "During the tenders we are confronted with suppliers of drugs, along with our contract and claim to be explicitly created exclusively for bidding - says the federal employee distributor, one of the three largest. - But their main goal - to bring down the price and make a major supplier like us to work with the least possible margin. Supply, as such, these companies are not engaged. " In theory, Russia's largest suppliers to the state dovezti drug from manufacturer's warehouse to the pharmacy in any region of Russia. The representative of "Protek", the largest farmdistribyutora in Russia, says that now there is no region that is not "covered" to the company. In practice, sometimes out otherwise. "A common situation: some tiny regional pharmacy or pharmacy chain has long worked with major suppliers of drugs, but at some point, owes them everything and they have suspended deliveries, - says a former employee of one of the federal farmdistribyutorov. - At this point in the horizon there is a small regional supplier and product offers. It is clear that the drugs he does not buy directly from producers, and at the same major suppliers, only he, in contrast to the pharmacy, there is money to work with the feds on prepayment. As a result, pharmacy receives the goods and the provider is doing business, "otedaya" with the margin of the federal distributors. " Why are the feds on this? If they are shipping goods to a distribution warehouse, and not directly to the pharmacy, their revenue is reduced. But the question of whether the pharmacy to pay off the regional supplier, if it failed to pay the feds, and remain open. A situation where a manufacturer is shipping their goods to only one or two distributors, recently began to meet less often - including through the efforts of the Federal Antimonopoly Service, which strongly prevents the appearance of any "exclusive" relationship, notes David Melik-Guseinov. However, the precedents are well known. Thus, by mid-2009 FSUE "Microgen", Russia's largest vaccine manufacturer, worked with only one distributor - "Microgen Pharma", in 2008, renamed as "Megard Group." In April 2009, the "Microgen" changed its management - in April, was a former Director General of FSUE CEO Moscow Endocrine Plant Lev Grigoriev, who takes the place of former Deputy Health Minister Anton Katlinskiy. Almost immediately thereafter, federal suppliers were able to buy goods in circumvention "Megard." Now "Microgen" has been working with all key farmdistribyutorami on general grounds, confirmed a spokesman Timothy Peshkov. Another version of the "exclusive distribution" - the manufacturer of very expensive drugs he sells its products in the region, according to David Melik-Guseinov. "Mark-up provider, when it comes to essential drugs is a percentage of the cost of the package. If the package is worth thousands of dollars - the manufacturer is much better to take a distribution margin of myself "- he explains. Game Shootout. Reduce the number of suppliers are still necessary, and do it really well at the legislative level, argues David Melik-Guseinov. "Drugs - a socially-oriented business that requires substantial investment: without them it is impossible to provide the necessary storage and transportation of drugs - he says. - What is now needed to market - is the introduction of standard GDP (good distribution practice) providers along with the standards of GMP (good manufacturing practice) for manufacturers, as well as raising the minimum share capital. Most of the regional distributors can not meet new quality requirements. " The top ten now controls over 80% market share and its share is growing, with the market development of farmdistribyutorov will become less and less, while their "penetration" in the region will grow, continue to the analyst. "In today's regulation of pricing and logistics existing schemes the whole territory of the Russian Federation may well serve 30, a maximum of 40 drug suppliers. Will only the largest, hundreds of small companies, sooner or later die out "- he concludes.