Industry Trend Analysis - Pharmaceutical Pricing Regulations To Boost Market Attractiveness - JUNE 2017

BMI View: The potential imposition of medicine price regulations in Kazakhstan is positive for the market. Private pharmacies will be prevented from applying extortionate margins on drug prices, preventing a reduction in the regional disparity of drug prices and resulting in greater affordability of medicines. Ex-manufacturer prices are unlikely to be affected, compounding our view that Kazakhstan is a highly attractive market in the region.

The fragmented nature of Kazakhstan's prescription medicine distribution poses a downside risk to the market's outlook. Despite being forecast as a regional outperformer for prescription medicines sales growth over the coming years, rising private pharmacy medicine prices pose a threat to medicine affordability and consequently have the potential to undermine the market's growth potential.

The medicine wholesale and retail sectors in Kazakhstan consist of a large number of small players. Unlike in the majority of developed markets, where there are a small number of leading wholesalers and retailers, this fragmentation prevents high-volume order price reductions and leads to significant regional drug price disparities. In March 2017, the Ministry of Health signed an agreement with pharmacies in South Kazakhstan to freeze the prices of approximately 150 socially significant medicines.

A Regional Outperformer
Prescription Medicine Sales 5-Year CAGR (%, loccur)
f = BMI forecast. Source: BMI

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