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Market Access: Russia

Overcoming the challenges of a fragmented market

Facing the challenge of multiple, overlapping models for healthcare delivery, from distinct federal, regional and municipal reimbursement lists to the ability of pharmacists to provide virtually any drug without prescription, pharmaceutical companies in Russia are beginning to tap into new insight into key opinion leaders (KOL) and prescribing influence to drive effective market access strategies.

The sheer scale of the market access challenge facing pharmaceutical companies in Russia is daunting: by landmass, the Russian Federation is the largest country in the world and has a population of 142.9 million. It has around 700,000 healthcare specialists, including physicians and pharmacists. However, 40 per cent of these specialists are located in the country's 13 largest cities, supporting less than 20 per cent of the total population (estimate based on 2002 census information updated April 2011), so healthcare provision is highly fragmented.

The healthcare system operates at three distinct levels: federal (national), regional and municipal, with 82 funds at regional level alone. However, while this model presents huge challenges for pharmaceutical companies looking to ensure new drugs are included on the state programme lists, it also offers the chance to enter the market in different ways.

With each fund operating in parallel, failure to get a drug on to the state programme list at federal level does not preclude a company from targeting the regional decision makers. The federal protocol is a reference, not mandatory, enabling regional funds to have their own protocols. A successful market access approach at regional, or even local, level can create and cultivate demand for drugs from the bottom up, increasing the chance of the drug being included in treatment protocols at the higher level.

Of course, in a market where the largest pharmaceutical company has around 50-60 account managers, it would be impossible to work effectively with each of the 82 regions. However, it is only those regions that are considered donors to the federal budget that have the financial power to take these decisions. The less wealthy regions, which are totally dependent upon the state budget, have to comply with tight guidelines for drug spending.

In reality, pharmaceutical companies focus on ten to 15 regional funds when they first enter the market with a product and look to build momentum at this level to boost patient demand and attain a position on the federal list.

Therefore, it is important to work directly with prescribers, from GPs to hospital consultants, too. While companies are focusing on the 13 major cities in Russia where the majority of healthcare professionals are located, there is a clear need to work more effectively with the estimated 280,000 healthcare specialists in these areas.

Companies do not have the key account managers (KAM) or field force resources to achieve effective influence without excellent segmentation and targeting.

In addition, the importance of distributors must not be overlooked. In the state segment specifically, distributors play the most important role, as they select the trademarks for the tenders (INN). Also, today only 30 per cent of drug costs are paid by the state, the rest are out-of-pocket payments. So, pharmacists have a massive influence on drug usage and can provide a vast array of drugs without prescription.  In some cases, pharmacists replace the doctor's prescription with an alternative product, often at the request of a patient looking for a cheaper product. Companies need to ensure market access strategies embrace pharmacists alongside GPs and hospital consultants to maximise product opportunity.

However, one of the main problems for pharmaceutical companies in Russia is a lack of the sort of information that has been a core component of the pharmaceutical sales model in other countries for years. There is no prescription data and sales data is provided by three different companies with limited granularity, making it hard to draw the required insights.

Furthermore, there is a lack of in-depth information about healthcare specialists, with lists giving only the number of positions available, without making it clear how many GPs or consultants have more than one position. Indeed, some 30 per cent of GPs may work in two places, but traditionally pharmaceutical companies have had no way of determining accurate clinician data. Given the scale of the health service in Russia, this lack of information has made it difficult to target activity effectively.

Transforming insight
Given the huge number of specialists operating across this vast territory, one of the main components for successful market access must be information about the target audience on a named level. Now, new access to information about physicians and pharmacists is transforming the way pharmaceutical companies address the market.

Companies now have greater insight into the local thought leaders and communities of practice at hospital and regional level. They are developing strong relationships with KOLs, authorities and patients' societies to build influence in specific therapeutic areas.

Furthermore, this information can be combined with prescribing trends, enabling pharmaceutical companies to embark on far more effective and targeted market access activity. For example, quantitative indicators allow companies to rank experts by doctor's coverage and size of communities of practice, the strength of influence on prescriptions and the potential for prescribing to new patients.

Today, market access is focused at regional and local level to enable pharmaceutical companies to maximise opportunities across an incredibly fragmented market.

However, changes are on the way. The Russian government is looking at the pharmaceutical sector and planning changes to legislation, which will have an impact on business. In 2010 there was the introduction of new price registration for Essential and Vital Drugs (EDL). While this process was transparent, with a clear decision-making structure at federal level, the result was a price freeze, with the EDL pricing now based on the lowest prices paid in a number of European reference markets.

While this policy has made little impact on prescribing practices at regional and municipal level, this EDL list is expected to become the foundation of a new health insurance system, due to be piloted in 2012/2013, which looks set to fundamentally change the way drugs are prescribed and reimbursed across Russia.

Indeed, the creation of the EDL was just the start, with 2010 also witnessing legislative changes designed to bring far more consistency across Russia. It is those  pharmaceutical companies that adapt to this fast changing model and leverage new access to an unprecedented depth of health professional information that will be best placed to maximise the considerable opportunities available across the territory.

Lucia Railean
The Author

Lucia Railean is general manager, Cegedim Relationship Management, Russia

To comment on this article, please use the commenting feature below




For more information about the Russian pharmaceutical market, see PMGroup's Country Report: Russia.


4th November 2011


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