The Ukrainian pharmaceutical market has been growing quite rapidly during the last five years – by 25-30% per annum in terms of value, to $2.6bn in 2007. In H1 2008 it had already exceeded $1.6bn, growing by 42% y-o-y. PMR expects the Ukrainian market to grow by more than 25% per annum between 2008 and 2010 and to be worth $5.7bn in 2010. According to the latest PMR’s report “Pharmaceutical market in Ukraine 2008”, if a reimbursement system and health insurance had been implemented promptly, the market would have grown even more rapidly.

Growth forecasts optimistic despite numerous obstacles
The Ukrainian pharmaceutical market is the second largest, after Russia, of any in the CIS countries. In addition, it has been developing quite rapidly within the last few years, but there is still considerable potential for further growth. Today, it is strongly influenced by the following factors: Ukraine’s membership of the WTO since this year, the need to implement GMP standards from 2009 onwards and the prospects for the introduction of an obligatory medical insurance system.

According to Monika Stefanczyk, the head pharmaceutical analyst at PMR: "Despite numerous obstacles on the Ukrainian market, including, to list only a few, low per capita drug consumption, an old-fashioned and inadequate healthcare system, the lack of a reimbursement system, a high level of bureaucracy, an inadequate legal framework and an unstable political situation, PMR is quite optimistic in forecasting further market development". The market is considered to have a great deal of potential for growth, because is still relatively small, taking the population into account (for example, the Polish market, with a smaller population of approximately 38 million, was worth more than three times its Ukrainian counterpart in 2007). We have also observed factors such as increasing investment attractiveness, including an unrestricted pricing policy, the significant prevalence of generics and OTC products on the market, and Ukraine’s membership of the WTO.
Another pertinent factor is associated with trends on the international pharmaceutical market. Global manufacturers are now under pressure from the low prices of generics, particularly those produced by Indian manufacturers. On the other hand, Indian companies have become more concerned about competition from European and Chinese manufacturers. This renders the markets of the CIS countries, including Ukraine, of great interest to foreign companies looking for investment opportunities.

Cardiovascular drugs - undeveloped but promising market
Drugs used to treat alimentary tract and metabolic diseases comprise the largest category of the retail pharmaceutical market in Ukraine. In addition, drugs used for cardiovascular system diseases are the third largest category, whereas in the majority of European countries, e.g. Poland, France and Romania, this category is the largest and also one of the most rapidly developing groups of drugs. However, PMR expects this category to develop very dramatically between 2008 and 2010, at an average rate of 38% year on year in terms of value. In 2007 sales in this category were worth $246m, and in H1 2008 the category witnessed one of the fastest increases in sales value on the market.

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