Pricing and Reimbursement in Russia - Big Pharma Take Advantage of Reimbursement for Costly Drugs through the DLO’s Seven Nosologies Program

Pricing and Reimbursement in Russia - Big Pharma Take Advantage of Reimbursement for Costly Drugs through the DLO’s Seven Nosologies Program

Summary

GBI Research, the leading business intelligence provider, has released its latest research “Pricing and Reimbursement in Russia - Big Pharma Take Advantage of Reimbursement for Costly Drugs Through the DLO’s Seven Nosologies Program”. It provides a comprehensive overview of the healthcare system, and pricing and reimbursement process in Russia, with key data, information and analysis of the steps of the pricing and reimbursement process. The report closely scrutinizes major changes in the pharmaceuticals-related pricing and reimbursement in Russia due to the implementation of a new law “On Circulation of Drugs”.

The scenario of pricing and reimbursement of drugs in Russia is in a dynamic phase. The government of Russia increased the funding of National Healthcare Project to improve the primary healthcare provided to Russians. Under the National Healthcare Project, improvement in primary healthcare, out-patient clinics and technology centers was done. The launch of the DLO (the acronym for Additional Medicines Supply Program) program was done for disabled persons, pensioners and patients in need of specialized medicines. It was estimated by the Ministry of Health and Social Development that 15 million people will be covered under this program. Since the option of opting for money instead of medicine was provided under the program, a greater number of patients opted for the money. Those patients who opted for medicines got a chance to be treated by some of the best medicines available for their respective therapy areas.

The VZN program (acronym for Seven Nosologies Program) was segmented from the DLO. This was because there is a set of people who need specialized medicines which are particularly expensive. The other segment of the DLO program is called the Essential Drug Program (ONLS). Compulsory medical insurance for all Russians was introduced in 1995. Under the medical insurance plan Russians recieve treatment, hospitalization, surgical operation, dental care and other facilities free of charge. However, state medical insurance does not seem to be sufficient for all Russians, so private insurance (voluntary medical insurance) players are also active in the field. The implementation of the new law “on circulation of drugs” resulted in the mandatory registration of prices of drugs listed in the Essential Drug List (EDL) in Russia. This means that the Russian government will now regulate the prices of drugs more uniformly. The decision of the Russian government to boost the domestic pharmaceutical market will lead to the launch of more innovative drugs by domestic pharmaceutical companies. Many major global pharmaceutical companies are initiating and expanding their production capacities in Russia to penetrate further into this market.

Scope

- Detailed study of the healthcare scenario in the Russia.
- Analysis of the pricing and reimbursement mechanisms in Russia.
- Key changes that follow from the implementation of new law “on circulation of drugs” in the pricing and reimbursement system.
- Details about government bodies which regulate different processes of pricing and reimbursement in Russia.
- Details about share of major companies in reimbursement program of Russia.
- Insight into various reimbursement programs in Russia.

Reasons to buy

- Build an understanding of the pharmaceuticals-related key pricing and reimbursement mechanisms in Russia.
- Optimize your investment through identification and understanding of the changes in the pharmaceutical regulatory mechanism in Russia.
- Knowledge about the regulatory bodies who undertake different processes of price registration.
- Develop effective business strategies related to new drug launches through the analytical insight gained from key trends in pricing and reimbursement scene in Russia.
- Negotiate better with the government agencies to maximize reimbursement on the drugs by understanding the mechanism.

1 Table of Contents
1 Table of Contents 5
1.1 List of Tables 6
1.2 List of Figures 7
2 Pricing and Reimbursement in Russia – Introduction 9
3 Pricing and Reimbursement in Russia – Overview 10
3.1 Introduction to Healthcare System in Russia 10
3.1.1 Comparative Analysis 10
4 Pricing and Reimbursement in Russia - Overview of Pharmaceutical Market in Russia 16
4.1 Healthcare System in Russia 16
4.1.1 Health Indicators in Russia 16
4.1.2 Private Expenditure on Health 20
4.1.3 Segmentation of Russian Pharmaceutical Market 22
4.2 PEST Analysis of Russian Pharmaceutical Market 23
4.2.1 Political 23
4.2.2 Economical 23
4.2.3 Social 23
4.2.4 Technological 24
4.3 Drug Expenditure 24
4.3.1 Drug Expenditure as Percentage of Healthcare Expenditure 24
4.4 Russian Pharmaceutical Market Segmented by Therapeutic Area 25
5 Pricing and Reimbursement in Russia - Drug Pricing in Russia 27
5.1 Introduction 27
5.1.1 Drug Price Authorities in Russia 27
5.1.2 Price Registration in Russia 28
5.2 Price Setting Procedures 30
5.2.1 Essential Drugs List (EDL) Pricing 30
5.2.2 Historical Pricing Procedures 31
5.2.3 Current Pricing Procedures 32
5.2.4 Reasons to Change Prevailing Pricing Procedures 32
5.3 Type of Compensation for EDL Drugs 33
5.4 Share of Domestic Drugs in EDL 34
5.4.1 Share of Domestic Drugs in EDL by Sales Value 34
5.4.2 Share of Domestic Drugs in EDL by Sales Volume 35
5.5 Share of EDL in Russian Pharmaceutical Market 36
5.5.1 Share of EDL in Russian Pharmaceutical Market by Sales Value 36
5.5.2 Share of EDL Drugs in Russian Pharmaceutical Market by Sales Volume 37
6 Pricing and Reimbursement in Russia - Reimbursement Programs in Russia 38
6.1 Introduction 38
6.1.1 DLO - Reimbursement Program of Russia 38
6.1.2 The Seven Nosologies Program (VZN) 46
6.1.3 ONLS Program 51
6.2 Insurance System 52
7 Pricing and Reimbursement in Russia - Appendix 53
7.1 Market Definitions 53
7.2 Abbreviations 53
7.3 Sources 53
7.4 Research Methodology 54
7.4.1 Healthcare System 54
7.4.2 Pharmaceutical Regulations 54
7.4.3 Pricing of Pharmaceutical Drugs 54
7.4.4 Reimbursement of Pharmaceutical Drugs 55
7.4.5 Pricing and Reimbursement in Major Therapy Areas 55
7.5 Contact Us 55
7.6 Disclaimer 55

1.1 List of Tables
Table 1: Pricing and Reimbursement in Russia, Health Expenditure as a Percentage of GDP ($), %, BRIC and The US, 2006–2010 11
Table 2: Pricing and Reimbursement in Russia, Estimated Public Health Spending as a percentage of GDP, BRIC vs The US, 2010–2050 12
Table 3: Pricing and Reimbursement in Russia, Public Health Expenditure as a Percentage of Total Health Expenditure ($), BRIC and the US, 2006–2010 13
Table 4: Pricing and Reimbursement in Russia, Health Expenditure per Capita ($), BRIC Countries, 2006–2010 14
Table 5: Pricing and Reimbursement in Russia, Out of Pocket Health Expenditure as a Percentage of Private Expenditure on Health, BRIC, The US, 2006–2010 15
Table 6: Pricing and Reimbursement in Russia, Health Indicators, Russia, 2009 16
Table 7: Pricing and Reimbursement in Russia, Share of Domestic and Imported Drugs, Sales Value, %, Russia, 2009 and 2010 17
Table 8: Pricing and Reimbursement in Russia, Share of Domestic and Imported Drugs, Sales Volume, %, Russia, 2009 and 2010 17
Table 9: Pricing and Reimbursement in Russia, Share of Prescription and OTC Drugs, Sales Value, %, Russia, 2009 and 2010 18
Table 10: Pricing and Reimbursement in Russia, Share of Prescription and OTC Drugs, Sales Volume, %, Russia, 2009 and 2010 19
Table 11: Pricing and Reimbursement in Russia, Private Expenditure on Health as a Percentage of Total Healthcare Expenditure, Russia, 2000–2009 20
Table 12: Pricing and Reimbursement in Russia, Total Expenditure on Health per Capita at Exchange Rate, ($), Russia, 2000–2009 21
Table 13: Pricing and Reimbursement in Russia, Pharmaceutical Market Segmentation, Sales Value, %, Russia, 2009–2010 22
Table 14: Pricing and Reimbursement in Russia, Segmentation of Out of Pocket Drug Market by Price of Drugs, %, Russia, 2009–2010 24
Table 15: Pricing and Reimbursement in Russia, Russian Pharmaceutical Market, Therapy Area, Sales Value, %, 2010 and 2011 25
Table 16: Pricing and Reimbursement in Russia, Russian Pharmaceutical Market, Therapy Area, Sales Volume, %, 2010 and 2011 26
Table 17: Pricing and Reimbursement in Russia, Share of Domestic Drugs in EDL, Sales Value, %, Russia, 2009 and 2010 34
Table 18: Pricing and Reimbursement in Russia, Share of Domestic Drugs in EDL, Sales Volume, %, Russia, 2009 and 2010 35
Table 19: Pricing and Reimbursement in Russia, Share of EDL in Total Russian Pharmaceutical Market, Sales Value, %, Russia, 2009 and 2010 36
Table 20: Pricing and Reimbursement in Russia, Share of EDL in Total Russian Pharmaceutical Market, Sales Volume, %, Russia, 2009 and 2010 37
Table 21: Pricing and Reimbursement in Russia, Number of DLO Beneficiaries, million, Russia, 2005–2010 38
Table 22: Pricing and Reimbursement in Russia, Total Value of DLO Program, Russia, 2007–2010 39
Table 23: Pricing and Reimbursement in Russia, Segmentation of DLO Sector Based on Sales Value of Domestic and Imported Drugs, 2009 and 2010 40
Table 24: Pricing and Reimbursement in Russia, Segmentation of DLO Sector Based on Sales Volume of Domestic and Imported Drugs, 2008 and 2009 41
Table 25: Pricing and Reimbursement in Russia, Top 10 Companies in DLO Sector, Sales Value, %, Russia, 2009 and 2010 42
Table 26: Pricing and Reimbursement in Russia, Top 15 Companies in DLO Sector, Sales Value, %, Russia, 2008–2010 43
Table 27: Pricing and Reimbursement in Russia, Segmentation of Drugs in DLO Program by Price Range, Sales Value, %, 2009 and 2010 44
Table 28: Pricing and Reimbursement in Russia, Segmentation of DLO Program, Sales Value. %, Russia, 2009 and 2010 45
Table 29: Pricing and Reimbursement in Russia, Share of Nosologies in Seven Nosologies Program, Russia, (%), 2008 and 2009 47
Table 30: Pricing and Reimbursement in Russia, Share of Drugs in Seven Nosologies Program, %, 2009 and 2010 48
Table 31: Pricing and Reimbursement in Russia, Share of Drugs in Seven Nosologies Program, %, Russia, 2008 and 2009 49
Table 32: Pricing and Reimbursement in Russia, Segmentation of Drugs in VZN Program by Price Range, Sales Value, %, 2009 and 2010 50
Table 33: Pricing and Reimbursement in Russia, Price Segmentation of Drugs in ONLS Program, Sales Value, %, Russia, 2009 and 2010 51
Table 34: Pricing and Reimbursement in Russia, Private Insurance as a Percentage of Private Healthcare Expenditure, 2000–2009 52

1.2 List of Figures
Figure 1: Pricing and Reimbursement in Russia, Health Expenditure as a Percentage of GDP ($), %, BRIC and The US, 2006–2010 10
Figure 2: Pricing and Reimbursement in Russia, Estimated Public Health Spending as a Percentage of GDP, BRIC vs The US, 2010–2050 12
Figure 3: Pricing and Reimbursement in Russia, Public Health Expenditure as a Percentage of Total Health Expenditure ($), BRIC and the US, 2006–2010 13
Figure 4: Pricing and Reimbursement in Russia, Health Expenditure per Capita ($), BRIC Countries, 2006–2010 14
Figure 5: Pricing and Reimbursement in Russia, Out of Pocket Health Expenditure as a Percentage of Private Expenditure on Health, BRIC, The US, 2006–2010 15
Figure 6: Pricing and Reimbursement in Russia, Share of Domestic and Imported Drugs, Sales Value, %, Russia, 2009 and 2010 16
Figure 7: Pricing and Reimbursement in Russia, Share of Domestic and Imported Drugs, Sales Volume, %, Russia, 2009 and 2010 17
Figure 8: Pricing and Reimbursement in Russia, Share of Prescription and OTC Drugs, Sales Value, %, Russia, 2009 and 2010 18
Figure 9: Pricing and Reimbursement in Russia, Share of Prescription and OTC Drugs, Sales Volume, %, Russia, 2009 and 2010 19
Figure 10: Pricing and Reimbursement in Russia, Private Expenditure on Health as a Percentage of Total Healthcare Expenditure, Russia, 2000–2009 20
Figure 11: Pricing and Reimbursement in Russia, Total Expenditure on Health per Capita at Exchange Rate, ($), Russia, 2000–2009 21
Figure 12: Pricing and Reimbursement in Russia, Pharmaceutical Market Segmentation, Sales Value, %, Russia, 2009–2010 22
Figure 13: Pricing and Reimbursement in Russia, PEST Analysis of Russian Pharmaceutical Market, 2011 23
Figure 14: Pricing and Reimbursement in Russia, Segmentation of Out of Pocket Drug Market by Price of Drugs, %, Russia, 2009–2010 24
Figure 15: Pricing and Reimbursement in Russia, Russian Pharmaceutical Market, Therapy Area, Sales Value, %, 2010 and 2011 25
Figure 16: Pricing and Reimbursement in Russia, Russian Pharmaceutical Market, Therapy Area, Sales Volume, %, 2010 and 2011 26
Figure 17: Pricing and Reimbursement in Russia, Steps for Entering Pricing and Reimbursement, Russia, 2011 28
Figure 18: Pricing and Reimbursement in Russia, Steps for EDL Formation, Russia, 2011 29
Figure 19: Pricing and Reimbursement in Russia, Steps for Price Registration, Russia, 2011 29
Figure 20: Pricing and Reimbursement in Russia, Registration of Maximum Selling Price of Foreign - Manufactured Drugs, Currency of Price Registration, Russia, 2011 30
Figure 21: Pricing and Reimbursement in Russia, Types of Compensation for EDL Drugs, Russia, 2011 33
Figure 22: Pricing and Reimbursement in Russia, Share of Domestic Drugs in EDL, Sales Value, %, Russia, 2009 and 2010 34
Figure 23: Pricing and Reimbursement in Russia, Share of Domestic Drugs in EDL, Sales Volume, %, Russia, 2009 and 2010 35
Figure 24: Pricing and Reimbursement in Russia, Share of EDL in Total Russian Pharmaceutical Market, Sales Value, %, Russia, 2009 and 2010 36
Figure 25: Pricing and Reimbursement in Russia, Share of EDL in Total Russian Pharmaceutical Market, Sales Volume, %, Russia, 2009 and 2010 37
Figure 26: Pricing and Reimbursement in Russia, Number of DLO Beneficiaries, million, Russia, 2005–2010 38
Figure 27: Pricing and Reimbursement in Russia, Total Value of DLO Program, $bn, Russia, 2007–2010 39
Figure 28: Pricing and Reimbursement in Russia, Segmentation of DLO Sector Based on Sales Value of Domestic and Imported Drugs, 2009 and 2010 40
Figure 29: Pricing and Reimbursement in Russia, Segmentation of DLO Sector Based on Sales Volume of Domestic and Imported Drugs, 2008 and 2009 41
Figure 30: Pricing and Reimbursement in Russia, Top 10 Companies in DLO Sector, Sales Value, %, Russia, 2009 and 2010 42
Figure 31: Pricing and Reimbursement in Russia, Segmentation of Drugs in DLO Program by Price Range, Sales Value, %, 2009 and 2010 44
Figure 32: Pricing and Reimbursement in Russia, Segmentation of DLO Program, Sales Value. %, Russia, 2009 and 2010 45
Figure 33: Pricing and Reimbursement in Russia, Share of Nosologies in Seven Nosologies Program, Russia, 2008 and 2009 46
Figure 34: Pricing and Reimbursement in Russia, Share of Drugs in Seven Nosologies Program, %, 2009 and 2010 48
Figure 35: Pricing and Reimbursement in Russia, Share of Drugs in Seven Nosologies Program, Russia, 2008 and 2009 49
Figure 36: Pricing and Reimbursement in Russia, Price Segmentation of Drugs in VZN Program, Sales Value, %, 2009 and 2010 50
Figure 37: Pricing and Reimbursement in Russia, Segmentation of Drugs in ONLS Program by Price Range, Sales Value, %, Russia, 2009 and 2010 51
Figure 38: Pricing and Reimbursement in Russia, Private Insurance as a Percentage of Private Healthcare Expenditure, 2000–2009 52