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Overview.

Market Access Pathway in Ukraine: Pharmaceuticals | Hospital and Retail Channels

March 2023

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Market Summary

The pharmaceutical industry in Ukraine is a robust and resilient sector that has demonstrated strong growth rates even in times of economic crisis. It is divided into two primary segments: retail, which includes pharmacy sales and is heavily focused on established generic (Gx) and branded generic (BGx) products; and hospital, which comprises purchases made by hospitals using funds from the state budget, their own internal budgets, regional healthcare budgets, and private hospital procurements.

Retail sales represent the majority of the Ukrainian pharmaceutical market, accounting for approximately 91% of total sales, while hospital sales account for the remaining 9%. However, the recent full-scale invasion by Russia has had a significant impact on the local market, resulting in a 22% decline in market value.

Retail Segment

The total retail segment showed resilience and decreased only by 6% (vs. predicted 19-29% decline) to EUR 3.3 bn. The war negatively affected the consumption trend towards the decrease of Rx drugs share.

By the end of 2022, OTC drugs consumption boosted significantly and reached 57% of total spending in values.

As for the structure of retail drug sales, anti-inflammatory and antirheumatic agents, RAS-acting agents, analgesics, and anti-diabetic drugs were the leading indications in the retail segment in 2022. Forecasts for 2023 claim that the growth of pharmacy sales of drugs in national currency is expected to increase by 7% under the pessimistic scenario and up to 30% under the optimistic one.

Hospital Segment

In 2022, the total share of the hospital segment, including public funds of the Ministry of Health of Ukraine (MOH), local budgets, and private funds of private clinics, amounted to EUR 355 mln in values and 84 mln units in volumes. This number is twice less than in 2021, mostly due to the previous predominance of vaccine funding. Notably, the share of the hospital segment in 2022 was about 9%, dropping by more than half compared to 2021.

Within the hospital segment, state budget funds accounted for EUR 188 mln (53% of the total), local public funds—EUR 152 mln (42.8%), and private hospitals spending—EUR 16 mln (4.2%). The centralized purchases of medicines and medical devices under the state program at the expense of the public budget started only in Mar 2022—two months later than the authorized date due to the Russian invasion of Ukraine.

The procurement operator—the State Enterprise "Medical Procurements of Ukraine" conducted purchases within the scope (96% of planned performance) worth EUR 185 mln. The volumes of medicines purchased in terms of therapeutic areas vary from the funding source, either public or private.

Antiviral drugs, antihemorrhagics (HEMLIBRA®), antibodies, antimycobacterials (DELTYBA®), enzymes (ELAPRASE®, CEREZYME®), immunoglobulins (BIOVEN®), antineoplastic drugs and immunomodulating agents (ACTEMRA®, Everolimus), and mucolytics (PULMOZYME®) prevail in the structure of pharmaceutical spending from the state budget.

Local budgets mainly procure blood substitutes and perfusion solutions, antithrombotic agents (ACTILYSE®), antibacterials for systemic use, anaesthetics (INFULGAN®), and immunosuppressants. In turn, private hospitals spend funds on gonadotropins and progestogens (GONAL-f®, MENOPUR®, OVITRELLE®), antineoplastic and immunomodulating agents (KEYTRUDA®, AVASTIN®), blood substitutes and perfusion solutions (DOTAVIST®).

Sales in the hospital segments are complex and strictly regulated. Therefore, MAH should follow the relevant procedures to access the Ukrainian market, which will be further explained in detail in this publication.

Despite active war hostilities, the destruction of warehouses and hospital infrastructure, external and internal migration, disruption in electricity and supply chains, and the threat of missile attacks, the pharmaceutical market of Ukraine continues to function fully, showing unprecedented resilience, adaptation capability, and ability to recover fast in the new reality.

All pharmaceutical market actors strive to implement new game rules and optimize the corporate processes to ensure patients and HC facilities have access to necessary medicines and medical devices.

This publication aims to provide the readers with a concise overview of the strategies for entering the pharma market in terms of marketing authorization framework, pricing & reimbursement implications, HTA, and public purchase peculiarities. Also, it delineates key stakeholders involved in the market access process and the main channels of drug sales in the public sector.