Value through Innovation23 April 2014

Healthcare policy and the market / Reform efforts with a clear goal - Improved access to medicines

According to the independent IMS Health audit data in the first quarter of 2011, Boehringer Ingelheim held 15th place among the pharmaceutical companies in Russia. In the first quarter, the company’s turnover grew by 29 % while overall market growth was 18 %. Boehringer Ingelheim Russia has more than 800 employees countrywide.

In the Russian market the company is engaged in various therapeutic areas. Among the leading brands are: Berodual®, S piriva®, Actilyse®, Movalis®, Micardis®, Pradaxa®, Lasolvan®, Guttalax®, Antistax® and Finalgon®. In the near future, it is planned to launch innovative medications in the fields of endocrinology and oncology. The most important event this year, as in other countries too, is the planned registration of the oral thrombin inhibitor Pradaxa® in its second indication.

To further strengthen its position on the Russian market, Boehringer Ingelheim Russia has as of 1 January 2011 changed its legal status from a representative office to an limited liability company. Acquiring an independent corporate identity in the Russian Federation considerably improves its prospects on the Russian market.

Furthermore, the corresponding changes implemented in organisational processes and the management structure reflect the current situation of the Russian healthcare market, which is also in the middle of a phase of renewal.

Russia has a special position within its region. Because of its rapid development in the last ten years, the Russian pharmaceutical market is well on the way to becoming the 10th largest pharmaceutical market in the world. In any event, this makes Russia an interesting area of activity. In addition, it is exciting for all those involved to have the opportunity to be able to contribute to the positive changes in the healthcare system – an area of immense importance to all Russian citizens.

Boehringer Ingelheim’s market position in Russia is comparable to the company’s position worldwide. The same applies to its product portfolio, except for some local peculiarities. One decisive difference, however, is the above-average significance of Consumer Health Care (CHC) products. According to IMS data for 2010, CHC and OTC products accounted for about 30 % of the total market. Compared to mature markets, this is a relatively large share. Some of the reasons for this are the current structure and financing of the Russian healthcare system and disproportionately low expenditure on prescription drugs. This is also reflected in the Boehringer Ingelheim product portfolio.

After a decline in 2009, the pharmaceutical industry returned to overall growth in the last business year. However, state responsibilities, such as the DLO reimbursement programme and the hospital sector, showed slightly negative development. The speed of development in these areas depends primarily on the level of government expenditure, which, in turn, is subject to certain financial regulations. Overall, the market grew by slightly more than 7 % in local currency (RUB) terms. Foremost was growth in the retail sector.

Boehringer Ingelheim expects that the situation will change in the coming three to five years. Various programmes and strategies that are currently being initiated, including the revision of the reimbursement system, the aim of which is to make improved access to innovative and special medicines possible for state sector patients.

Boehringer Ingelheim, just as other research-orientated pharmaceutical companies too, is following this development with particular interest and is ready to support corresponding initiatives. The state initiatives launched over the last two years mean changed market conditions. After a period of rapid market growth, structural changes are being implemented that are welcomed by most market participants. These changes govern and regulate interactions between various market players and signify improved access to medicines for patients in Russia. Furthermore, it promotes a higher quality of pharmaceutical products, coupled with a better quality of medical service overall.

A deep breath
Boehringer Ingelheim’s approach in this regard probably differs little from the strategies of numerous other multinationals. Emerging markets have long played an important role in the corporate strategy and this focus has now become business. For many years, Boehringer Ingelheim has operated in the emerging regions of South America, Southeast Asia, the African continent and Eastern Europe.

Long-term partnership
The Russian market has in this time gone through at least two periods of rapid growth and has also experienced two periods of some economic recalibration. Symbolically, the last-mentioned periods were approximately 10 years apart – 1998 and 2008. The company is committed to active cooperation and to building up a long-term partnership with Russian society in the medical and academic or other fields relevant to accomplishing this in Russia.

Even though the pharmaceutical market in Russia has not yet reached the size that one might expect, given the number of inhabitants in the country, Russia’s potential to play a greater role on the global pharmaceutical market is already plain to see. Change will be driven forward by the previously mentioned reforms that are now being undertaken.

Emerging markets usually grow faster than mature markets. The connection between emerging markets, Russia and Boehringer Ingelheim can simply be identified as “growth”. In order to promote growth, relevant structures are being built up countrywide. Nowadays Boehringer Ingelheim is represented in all major regions in Russia – not solely in the big cities, but also in many smaller towns.
Overall, the year 2010 was very successful for Boehringer Ingelheim Russia. The relevant statistics show that Boehringer Ingelheim has achieved continuous growth on the Russian market. This reflects one of the strategic goals – the continuous expansion of the company’s market position.