Business news from Ukraine

Indian pharmaceutical companies-members of IPMA continue to work in Ukraine despite huge drop in sales – IPMA

5 September , 2022  

The retail pharmaceutical market of Ukraine in March-June 2022 fell by 30-40% in monetary terms and by 20-30% in kind compared to the same period in 2021, hospital purchases dropped by 70-80%.

Such assessments of the development of the Ukrainian pharmaceutical market in the first half of 2022 were announced to Interfax-Ukraine by the Indian Pharmaceutical Manufacturers Association (IPMA).

“The pharmaceutical market of Ukraine in the first half of 2022, except for January and February, plummeted by 30-40%. The volume of sales of over-the-counter and prescription drugs fell by 30-40% in monetary terms and in packages by 20-30%, the volume of hospital supplies of medicines dropped by 70-80%,” IPMA said.

At the same time, the association said that “the distribution channel was disrupted, and distributors and pharmacy chains had to compensate for losses due to the bombardment of their warehouses and their pharmacies.”

According to IPMA participants, sales in the first two months since the start of the war in money and packages fell by 70%. In the following months, the fall was slightly less, but the average level of decline for six months is about 40%.

“This is due to several factors, firstly, a sharp drop in demand, the outflow of the population, hostilities in a large part of Ukraine and, secondly, problems in the supply of products. In the first months, it was problematic to ship products even from a local warehouse, since the territory of Kyiv was under shelling, almost all workers were not at work, mobilized or involved in local public works or territorially displaced,” the association said.

According to IPMA experts, in the future, problems with logistics to Ukraine came to the fore, since the main logistics channels through seaports and air were blocked.

“Logistics had to be built from scratch through European ports with the next truck delivery to Ukraine. The total cost of logistics has increased several times,” IPMA said.

In particular, the IPMA member company Konark Intelmed(Kharkiv)/Euro Lifecare PVT ltd. (India, a representative office in Kyiv) said that the company had to move its warehouse, which was located in Kharkiv, to the west of Ukraine.

“It cost us too much, plus we have to move our staff to the west of Ukraine, and also, in addition to the salary, provide them with a place to live. In general, it caused us a lot of damage,” said company director Sanjeev Bhagat.

At the same time, according to IPMA participants, the decline was very different in different categories of medicines. In particular, medicines for chronic diseases (diabetes, cardiovascular, etc.) showed a smaller drop, while medicines for acute respiratory infections, vitamins, antibiotics and in general non-essential drugs fell much more than the average.

IPMA said that due to the complexity of logistics, Indian pharmaceutical companies were unable to quickly establish supplies after the sudden cessation of direct air and sea communications with Ukraine.

The association said that “all Indian companies participating in IPMA remained to work in the Ukrainian market, although some had to significantly reduce their activities.”

“Our pharmaceutical companies are still rebuilding to work in the new conditions, but we continue to work on the Ukrainian market,” IPMA said.

The association reported that Indian pharmaceutical companies have provided assistance to Ukraine in the form of medicines and financial assistance, supported and continue to support Ukrainian citizens who were forced to leave their homes.

In particular, in the first months of the war, when the shortage of medicines was particularly acute, the IPMA participant, the Indian pharmaceutical company Macleods, provided medical aid to Ukraine in the amount of about UAH 27 million. It included hemostatic drugs, antibiotics, cardio- and other drugs. The company continues to provide assistance.

The representatives of the pharmaceutical company Hetero Labs and the Amarox company have been supporting Ukraine and its army since the first days of the Russian military invasion. These companies have repeatedly organized the collection of funds for the urgent needs of various medical institutions in Kyiv, including helping in the organization of food for hospital employees, in providing for the needs of operating blocks, resuscitation and surgical departments, and have handed over drugs for a total amount of UAH 4.5 million for the needs of the Armed Forces of Ukraine through representatives of the Ministry of Health, purchased and handed over the things necessary for the Armed Forces to representatives of the Ministry of Defense.

Employees of Ranbaxy Pharmaceuticals Ukraine in the western regions of Ukraine help refugees from areas affected by military actions, as well as help units of the territorial defense and the Armed Forces of Ukraine. Since the beginning of the military aggression, the company has donated UAH 3.8 million worth of medicines to 28 Ukrainian hospitals as humanitarian aid. Terapia company (Sun Pharma group of companies) transferred $500,000 to public organizations in Romania to help people who come from Ukraine.

The pharmaceutical marketing company Euro Lifecare together with the Ukrainian pharmaceutical distributor Konark Intelmed, in addition to helping Kharkiv, has already shipped humanitarian aid worth more than UAH 22.3 million and continues to help Ukrainians.

The Abril company has already resumed importing its products so that Ukrainian patients and the Ministry of Health of Ukraine can count on their help and support. Earlier, the company sent charity aid with antibiotics in the amount of about UAH 10 million.

In addition, IPMA joined the initiative of the President of Ukraine Volodymyr Zelensky UNITED24 and transferred UAH 500,000 in support of the Armed Forces of Ukraine on Independence Day of Ukraine.

“All our assistance is for the sake of the life and health of Ukrainians and for the approach of victory and peace in Ukraine. Despite all the challenges, Indian pharmaceutical companies in Ukraine continue to support Ukrainian patients by providing access to high-quality and affordable medicines and providing humanitarian assistance, as well as supporting their Ukrainian employees, providing access to labor and paying taxes,” IPMA said.

Predicting the further development of the market, the association said that “the state of Ukraine is increasing the share of sales through government procurement, and in some places they also buy Indian drugs.”

“All our companies plan to stay on the market and continue to work in Ukraine. The forecast directly depends on the military-political situation. If the situation remains the same as at the end of August until the end of the year, then we optimistically plan to end the year with a drop to the previous level of 30%. Unfortunately, a 30-40% decrease in US dollars is possible,” the association said.

The IPMA also noted the impact of the devaluation of the hryvnia, which, according to forecasts, will affect the pricing of vital and other medicines in the very near future.

The association said that “all IPMA members are separate representative offices of Indian companies or separate legal entities that are residents of Ukraine and have been present on the Ukrainian market for almost all the years of its independence.”

“Indian pharmaceutical companies – members of IPMA are making significant efforts to effectively provide the healthcare system of Ukraine with the necessary medicines, maintain supply chains and partnerships,” the association said.