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Unhealthy Russians, healthy drug sales
So just why is Russia so attractive? For one thing, many Russians are quite unhealthy due to excessive drinking, smoking, and unhealthy diets. So heart disease, cancer and respiratory illness rates are mushrooming. HIV infection rates are high, but treatment rates are low. All this adds up to an annual mortality rate of 15 per 1,000--and a decline in population of some 7 million since the Soviet Union collapsed.
The government realizes it has a problem, and it's talking about beefing up its healthcare system. That's reason two. If HIV treatment is low, then that's a huge opportunity for makers of HIV drugs. The same goes for cardiovascular remedies such as statins, beta blockers, et al. "We would expect that, in search of profits, foreign companies will not miss an opportunity to market their products in such a lucrative and untapped market," Foster and Sullivan analyst Vitaliy Lehkyy says. Indeed.
About 80 percent of Russia's meds are imported, but he government wants that to be more like 50 percent. So it's encouraging construction of manufacturing plants there, and some companies such as Nycomed and Sanofi-Aventis are taking advantage of the opportunity. Plus, the government is trying to help stabilize drug prices, to give the market more predictability and transparency.
There's just one drawback: As multinational pharma companies staff up in Russia with sales reps, the government has started to look down its nose at drug marketing. Prime Minister Vladimir Putin has even threatened to ban pharma reps' visits to doctors. We'll have to see how that turns out.