Pharmaceutical market Views

“In 2017, the pharmaceutical market is showing a significant growth, with growing both local and foreign companies”

Elena Lihovec

Top-management ща GlaxoSmithKline Pharmaceutical Ukraine (GSK) talking about culture of ethics in Ukraine pharmaceutical market

Emma Walmsley, who in March 2016 became CEO of GSK, introduced new strategic priorities for the company: innovation, efficiency and trust. In Ukraine, the GSK team, led by General Director Olena Likhovets, also defines further business development based on these priorities.

GSK is well-known in the pharmaceutical market – since 1998 it represents the interests of the international GSK corporation in Ukraine, and since 2007 it has been operating as an independent legal entity. During its activity, the company has proven itself as an honest player in the business. According to the results of 2016, GlaxoSmithKline Pharmaceutical is ranked 8th among international pharmaceutical companies operating in the Ukrainian market, in terms of sales in monetary terms (Morion Company data). GSK is well-known in the world and in Ukraine not only with innovative medicines and vaccines, but also with high standards of ethical conduct of business that promote honesty, transparency, respect for people and confidence building. Elena Lihovec told  about is this work effective on the pharmaceutical market of Ukraine.

: GSK is an international pharmaceutical company that imports its products to Ukraine. How has the economic crisis affected the company’s activities in Ukraine? Analyzing the indicators with the onset of 2017, can you state the stabilization of the pharmaceutical market?

О. Likhovets: I would say that the turning point for business has become the last year. After 2014-2015, when the volume of the pharmaceutical market in foreign currency decreased more than twice, in comparison with the pre-crisis period, in 2016 the situation stabilized, the fall in the currency stopped. This year, we already see a steady growth of the market, both in money and in packages. It tells about gradual withdrawal of the pharmaceutical industry from the crisis. Lost speeds are picked up by both local companies and foreign ones.

I would like to note that for the first five months of 2017, it is the foreign companies that show a greater increase.

: Can we affirm that an increase in the number of sales of packaging suggests warming for the investment attractiveness of the industry?

О. Likhovets: This is a good prognostic sign. Such results tells about the withdrawal of the market for depression, which was in 2014-2015. However, the active attraction of investments does not have a positive effect. Many foreign companies are still wary of the pharmaceutical market of Ukraine because of the instability of the economic situation and the imperfection of the legislative framework.

It should be noted that over the past few years, at the country level have been implemented key healthcare reform initiatives that have a good potential to positively affect both the access of Ukrainian patients to innovative medicines and vaccines and the civilized development of pharmaceutical companies in Ukraine

GSK supports the ongoing reforms, we are pleased to contribute to the development of a progressive, modern healthcare system in Ukraine for the benefit of patients.

: According to GSK’s top management, which year over the period of independence was the most breakthrough for the country’s pharmaceutical business?

О. Likhovets: I can state that the market has been growing and picking up all the time by 2013. To date, there have not been achieved yet those volumes in foreign currency that were in pre-crisis time. But it is growing at a faster pace. And the changes that take place in the industry allow us to look optimistic about the Ukrainian pharmaceutical market and believe in it.

: How did companies have to reformat their activities to save their positions in times of crisis?

О. Likhovets: We have taken a number of measures not only to survive the crisis, but also to make our business in Ukraine more stable and reliable. We have optimized the work of the company. Fortunately, we managed to save most jobs. In a commercial organizational structure, we went from the structure of several separate business units (business unit) to the structure of a single sales department and marketing department.

We also optimized our portfolio of drugs, focusing on the three main groups. These are respiratory, classical drugs (anti-infective and dermatological) and vaccines.

In recent years, some of the therapeutic groups of drugs, that the company transmitted to other companies at the global level, went from our portfolio. In Ukraine, such decisions have allowed to focus and be successful in strategic business areas. We are proud that, despite of the crisis, we have retained leadership in key segments (respiratory, anti-infectious and vaccine)

In order to manage business more effectively and minimize risks, changes were made to internal systems and control procedures. Introduced a new CRM system for the Sales, Marketing and Medical Departments.

And the most important – following the global changes in GSK, in recent years, we have significantly changed the principles of interaction with health professionals (POPs) and approaches to drug promotion. Specifically, healthcare providers are totally excluded from paying for our activities and providing information about our prescription drugs or POPs vaccines that affect the prescription of medicines. The POPs financial support for medical congresses has been discontinued. We do not pay bonuses for success in drug sales – now the compensation for sales representatives is based on quality indicators (KPIs). We also develop multichannel gadget tools such as webcasts and other advanced communications solutions.

Moreover, we have continued to apply flexible pricing policies and special programs to optimize the cost of vital products – for example, the Orange Card program – which helps to ensure the availability of innovative drug products for patients and maintain a stable volume of supplies.

: Is it difficult for a foreign company to conduct business in Ukraine?

О. Likhovets: For business in any country there are its pitfalls. As a pioneer, GSK adheres to the ethical principles of doing business and encourages other market participants to also comply with these standards. We show a market that can work ethically, even in countries with high corruption risk. This is evidenced by the transition to a new model of interaction with POPs and the introduction of new processes for checking counterparties for our confidence in their integrity, ethics and trustworthiness. We promote a culture of ethics and transparency and demand the same from our partners.

Maryna Shashkova 

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