Ukraine – OTC & Pharma Market back to good growth!

Ukraine – the biggest country in Europe
Did you know that the Ukraine is the biggest Country in Europe, with a size of 603.700 km2, followed by France and Spain which are about 15% smaller geographically. The Ukraine shares borders with Poland, Slovakia, Hungary, Romania, Moldavia and Russia. In terms of population the Ukraine ranks No.1 in Eastern Europe being far bigger than Poland and Romania. The Ukraine has almost 43 Mio inhabitants without the Krim area, which holds close to the number of people living in Spain.
Kiev the beautiful capital
The capital Kiev is one of the most beautiful cities in Europe with almost 3 Mio people living there. The City is located in the North-Western part of the country and is divided by the river “Dnieper”. The river runs into a natural reservoir just outside the city boarders. The wonderful old part of the city and the green hills in the centre are making the city an attractive destination. Kiev is a very safe but also an expensive city – due to being the most important industrial, scientific, educational, and cultural hub of the country.

OTC & Pharma Market back to good growth
The OTC & Pharma sector including medical devices did not escape the general economic downturn that hit the Ukraine between 2013 and 2015, but the healthcare industry is now back to healthy growth with double digit growth rates. Moreover the latest government healthcare reforms and the reimbursement system started 2017 are making the market very attractive for local and foreign investors.

The Ukraine market facts are:

• • The Ukraine market is strongly dependent on imports – like other CIS markets.
    About 60% of all OTC & Rx. products in value are imported.
  • About 80% of OTC / Rx. brands and products are being paid “out of pocket”
    like in Russia and other CIS countries even for oncology products.
  • The imported OTC / Rx. drugs are considered to be of higher quality and
    safer than local products and brands.
  • On average foreign OTC brands are priced about 2-3 times the prices of domestic brands and products.
  • The OTC market is very big, also due to the smaller reimbursement vs. comparable  countries.

Since the end of 2016 the Ukraine OTC & Pharma market is back to good growth. In 2016 vs. 2017 the estimated growth will be close to +10% in local currency and about 8,3% in US$, according to Ukraine market data experts. The market is mainly driven by the out-of-pocket segment like in Russia, including OTC and Rx. products.

Ukraine retail / pharmacy market still fragmented

The Ukraine retail / pharmacy market is still fragmented, which spurs the need for a strong local partner or local organisation to cover the retail outlets in the frequency necessary.

The main facts of the retail market are:

• Ukraine has about 18,000 private and state-owned pharmacies
• In the private sector consolidation levels in retail pharmaceutical sales in Ukraine are still low, with pharmacy chains mainly focused on bigger cities.
• The three largest pharmacy chains, Pharmacy-Magnolia, brand (“Apteka Nyzkyh Tsin”), Med-Service Group and Titan (“Zdorovye” brand), account for about 10% of the total pharmacy sales.
• Apart from pharmacies, drugstores sell certain OTCs and limited Rx. products in their outlets, but have their focus on cosmetics and beauty etc. The top nationwide drugstore chains in Ukraine include Eva (425 stores), DC-Watsons (327 stores) and Kosmo (106 stores). The mentioned retail drugstores do have a comparable layout as other modern retail outlets in London and other big cities.

Market outlook and recommendation
The Ukraine market is back to good growth and with 43 Mio. consumer & patients w/o Krim, one of the leading European countries to be in with a big out-of-pocket market and good OTC prices compared to local brands and neighbour countries. Especially European products are considered  to be on “high quality”, which is still a strong buying criteria in the Ukraine. Products in the Ukraine do strongly benefit from Russia marketing Mix. actions such as TV, social media and the other way around.

CPC Added Value in the Ukraine:

picture by Jorge Franganillo– Kiev

All our CPC experts have practical experience from developing and launching more than 200 international brands / Rx. products, with P&L country responsibility.  

• During the last 20 years CPC experts have advised many international and CIS Pharma & OTC companies on Strategy and Marketing matters and Market Entry projects in the Ukraine and the CIS regions.
• The Systematic Local Partner Search is a unique tool to identify the best fitting Local Partner company for your brands in only 10-12 weeks.
• We cover all OTC, Rx., medical devices and FS regulatory topics in the Ukraine and CIS countries, incl. new product registration, variations or clinical studies.

Featured image: Photo by Eugene on Unsplash