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Russian Pharmaceutical Market Set For Growth

A Pricewaterhouse Coopers (PwC) report has revealed that the global pharmaceutical market will more than double in value to USD 1.3tn by 2020.

A Pricewaterhouse Coopers (PwC) report has revealed that the global pharmaceutical market will more than double in value to USD 1.3tn by 2020.

The report says that Russia is among the countries where consumption of medicines should increase dramatically.

Alina Lavrentiyeva, Director of PricewaterhouseCoopers Russia's Pharmaceutical Industry group, said: "The Russian pharmaceutical market looks quite promising at the present time, even despite certain difficulties. The sector is developing rapidly on account of general economic growth and increased standards of living among the population."

By 2020, Brazil, China, India, Indonesia, Mexico, Russia and Turkey could account for one fifth of global pharmaceutical sales, PwC predicts.

Growth in these regions will be driven by burgeoning demand for medicines and preventative treatments alongside population growth. GDP in the seven countries was set to triple during the next 13 years, from USD 5.1tn in 2004 to USD 15.7tn in 2020.

Russia needs to improve its system of healthcare and medicines distribution in short term to meet these new realities, warns the report. Demographic forecasts say that by 2020, 15.2 per cent of Russians will be 65 or older, compared with just seven per cent of those living in India, echoing the problems faced by other developed countries.

The PwC report stated, however, that the current pharmaceutical industry business model was economically unsustainable and operationally incapable of acting rapidly to produce the types of innovative treatments demanded by global markets. Pharmaceutical companies suffer from poor financial performance, growing sales and marketing costs and increased legal and regulatory constraints, added the report.

Steve Arlington, global pharmaceutical research and development advisory leader at PwC, explained: "The pharma industry will not be in a strong position to capitalise on opportunities unless R&D productivity improves. The core challenge for the industry is a lack of innovation. The industry is investing twice as much in R&D as it was a decade ago to produce two-fifths of the new medicines it then produced. It is simply an unsustainable business model."

The report suggested that the Pharmaceutical Industry focus investment more on research and less on sales and marketing and more on prevention instead of treatment. Such a strategy should lead to the wider use of health management, wellness programmes, monitoring, vaccinations and other value-added services.

Solutions to monitor and ensure that patients are fully compliant with their medications could generate more than USD 30 billion of revenue a year in new sales, the report said.

27th June 2007

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