Ukrainians spent substantially more on retail medications in 2018 than in the previous year, suggesting growing drug prices or greater purchasing power, according to new research.
Ukrainian market research firm Business Credit showed the Kyiv Post its new report, which found that drug sales in pharmacies, amounted to nearly Hr 70 billion in 2018, a 25 percent increase from the previous year. The total number of drugs, counted by packages sold, grew by less than 5 percent.
Business Credit found that “the average weighted price of the drugs was Hr 69.45, which is 19.52 percent more compared to 2017.”
“The growth in turnover was influenced by such factors as changes in price, demand, and the range of available goods,” with some meds being cycled out from pharmacies’ inventories, said Andrii Tsurkan, business development director at Business Credit.
The total volume of goods sold in pharmacies also grew by about 25 percent, to a total of Hr 84.5 billion. Inflation alone cannot account for this increase, as the consumer price index in 2018 increased by about 9.8 percent, according to the National Bank of Ukraine.
“People started buying newer, more expensive products, Tsurkan said.
According to 2018 research by the patient rights group Patients of Ukraine, many Ukrainians still perceive generic drugs as inadequate versions of their brand-name analogues. Brands are more trusted than the much cheaper generics, especially in western Ukraine, where consumers often cross into Poland to stock up on cheaper drugs there.
Patients of Ukraine also told the Kyiv Post that, Ukrainians tended to spend a lot of money on non-proven substances, such as homeopathic remedies, according to a 2016-2017 study. While there is no data showing if this behavior changed in 2018, Business Credit found a 4.5 percent drop in the purchase of over-the-counter drugs, but a whopping 21 percent increase in the purchase of prescription drugs. Prescriptions are about three times more expensive than OTC.
“What does this tell us? This suggests that the well-being of people in 2018 increased compared with 2017, and people began to buy more expensive goods,” Tsurkan said.
However, not everyone is optimistic. Elena Prudnikova, the head of the NGO Mikolaev Pharmaceutical Association, which often speaks out about the dangers of pharmaceutical consolidation, warned a forum of small pharmacy businesses on Feb. 6 that “prices on medications are growing, which makes them increasingly inaccessible to the population.
According to Prudnikova, larger pharmacy businesses can make marketing arrangements with drug suppliers, which can result in consumers paying higher prices out of pocket. She also said that consolidation of pharmacy chains is gaining steam, giving fewer businesses more power to set prices.
The pharmaceutical journal Apteka this week published a study showing that the number of private pharmaceutical retail stores in Ukraine has risen from 14,625 in 2015 to 16,457 as of the start of 2019. Most of these belong to small local chains, according to the report.
However, in the past three years, the percent of pharmacies belonging to tiny local chains fell from 73.3 percent to 67.8 percent. Over the same period, the percent of pharmacies belonging to larger, regional chains, grew by 5.4 percent. Close to a third of all chains in Ukraine are now regional.
Furthermore, in the past two years, the top 100 pharmacy chains’ share of total sales, in hryvnia, increased by 8.4 percent – to 74.5 percent, Apteka found.
“The consolidation of pharmaceutical retail is actively continuing,” according to the report.
