Pharmaceutical market Views

Neither government nor Ministry of Healthcare understands how to implement Health Care Reform for the patient’s benefit

Valery Kondruk

Valery Kondruk, the president of “Pharmplaneta” company, explains why foreign pharmaceutical companies are ready to return to Ukraine only after 2025

“Pharmplaneta” is a successful pharmaceutical company, which is included in the TOP-5 companies of the Ukrainian market. It is an official distributor of both manufactures: Ukrainian and foreign ones. Valery Kondruk, the president of the company, is as unique as his business is. He knows five foreign languages and is learning the sixth one, and does not imagine his life without sport, which helps him to distract from problems, and to find a way out of a difficult situation.

The head of “Pharmplaneta” sees any difficulties as instruments for desired changes in the country. He even developed his own Reform Concept of the Healthcare System of Ukraine named “Model 5”. Valery Kondruk told LDaily about the peculiarity and readiness of the Ukrainian government to implement this ‘Model’.

: Valery, you have been working in the pharmaceutical business for more than 25 years. You know all of the ups and downs of this industry better than anybody else. Tell us about the development of the pharmaceutical market in recent years.

V. Kondruk: Ukrainian pharmaceutical industry has always been innovative, since the time of the USSR. Almost all factories engaged in the medicine production were situated here. These enterprises didn’t leave the market with the collapse of the USSR. They just became private. Privatization has positively affected them as they turned into modern industries, operating in accordance with international standards.

Pharmaceutical industry of independent Ukraine had to overcome many crises. For example, after 2007-2008 new opportunities were opened for the pharmaceutical segment. Large foreign companies came to us, although that time Ukraine was a very small sales market for them. But they came here with the hope to improve and develop the pharmaceutical market.

Unfortunately, their hopes have not been realized. The 2014 economic crisis proved that the country’s economy has no growth prospects, and the purchasing power of the population is decreasing. Ukrainian pharmaceutical companies, unlike the foreign ones, quickly reacted on the production of the necessary drugs and started to sell them at a lower cost. As a result, the prices of Ukrainian drugs were 3-4 times lower than the foreign ones.

Sales in packagings of domestic pharmaceutical companies began to grow. If we mention the percentage ratio, today consumers buy 75% of drugs produced in Ukraine, and only 25% of imported medications. A few years ago, these figures were 50 to 50, prompting some Western companies to leave this market in order to possibly return after the economic stabilization, which is predicted to occur no earlier than in 2025.

: Did “Pharmplaneta” face the same sales growth as the other domestic companies?

V. Kondruk: We have a good growth started in 2013. Besides, we are gaining momentum in sales as well as in cash and in packaging, which allowed us to enter the TOP-5 list of Ukrainian distributors, and to occupy the fourth position in this rating in 2017. At the same time, we represent both Ukrainian and foreign producers on the market.

Despite the good results that our company demonstrates, I can not be certain that the entire pharmaceutical industry in the country is thriving. As for today our main consumer is an ordinary citizen. If he has money, he buys some medicine. If not, he does not buy it. And as we know, the purchasing power of the population hasn’t increased.

: Has the competition among pharmaceutical companies become tougher with such a development of the pharmaceutical market?

V. Kondruk: When we talk about competition in our industry, we have to understand that there are several segments in this business. If we talk about competition among manufacturers, it consists of the repeated production of one and the same drug. For example, many companies have Aspirin, Citramonum, Analgin, and so on. Therefore, we face competition in sales and fight for consumers. In this case consumers definitely benefit, as producers reduce the price to attract them.

But if we speak about high-tech medications, there is no competition among the companies. Because such product requires large investments, which not all the enterprises in Ukraine are ready for.

: How do you feel about the government intervention in this market over the years of working in the pharmaceutical business?

V.  Kondruk: I have a work experience both in business and in public office. And based on this experience, I came to the conclusion that any government intervention in business or the desire to regulate something, leads to negative consequences and does not always help to develop business or economy.

In the pharmaceutical industry government influence is observed much more than in other segments. I must admit that in this market it is the most necessary thing to be. Because pharmaceutical companies produce health products, and their quality must be highly-controlled. But I cannot understand, why there is no way to regulate the issue of falsifications. After all, everyone knows that there is a sufficient number of falsified drugs on the Ukrainian market. Nobody deals with regulation of this issue, especially no one carries financial and criminal responsibility. Accordingly, neither the manufacturer nor the consumer feels protected, and are following the example of other countries/ But such function should be assigned to the state.

: As a representative of the pharmaceutical industry, do you have any suggestions how to deal with it?

V. Kondruk: Firstly, it is necessary to immediately reform the health care system, which is highly discussed nowadays. But unfortunately, today neither the government, nor the Ministry of Healthcare, has a certain plan of action, or an understanding of the consequences, which these reforms will lead to.

This reform can not just be done without a determination of its stages.  There must be a clear plan, which has to affect all spheres, including pharmacy. But now we see that this industry is not considered at all in the plans for reform. Therefore, we decided not to stay away and developed our own concept of health care reform in Ukraine together with the members of the Union of Ukrainian Entrepreneurs (UUE) Health Committee.

: Tell us please, what is your reform idea based on?

V. Kondruk: Firstly, we studied, how health care had been reformed around the world, and analyzed the achievements. We have introduced the positive experience of the UK into the existing health care system, which gave us a conceptual understanding of what and how must be reformed in our country, and which role should the state play in this reform.

Any reform will have a result, if we understand where the money for it comes from. Such solution is also offered in our program. Further, we believe that this reform should concern the communities. That means, they should have their own ambulant clinic, where people can be regularly examined to identify possible pathologies on the early stages, which will increase general life expectancy.

Of course, we still have many offers that are set out in my health care reform concept and we will insist on taken them into account by the government. Now there is a risk that this reform, at best, will remain on paper, at worst – people will suffer. After all, the goal of health care reform is to increase the life expectancy and quality of life of every person, and this is the main thing to remember.

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