Expanding Pharmacy Chains Consolidate Russian Market

Pharmacy Russia modern

Over the past few years, Russia has seen immense growth in its pharmacy industry led by the expansion of large pharmacy chains. As of 2023, there are over 77,000 pharmacies across Russia, up 4.6% from 2022. Pharmacy chains now account for 91.7% of total pharmacy revenue in the country.

Russian Pharmacy Chains Consolidating Market Through Aggressive Expansion

The top pharmacy chains are consolidating their dominance in Russia’s retail pharma space. The #1 chain Rigla controls over 7% market share based on total turnover. Rigla operates over 4,000 pharmacies. Meanwhile the second largest chain April also manages an extensive network of over 7,400 locations with 6.6% market share.

These leading chains are rapidly expanding by opening new outlets while also acquiring smaller regional chains. Rigla for example acquired the Vladivostok-based Far Eastern Pharmaceutical Chain in 2022.

Russian pharmacy old style

Russian pharmacy old style

Improving Profitability for Russian Pharmacies

While pharmacy count is rising steadily, the business is also becoming more profitable on average. In 2021 nearly 20% of Russia’s pharmacies were unprofitable. However improved operations have now dropped this to just 7.5% by 2023 according to AlphaRM. Large chains in particular have optimized costs through their scale.

Table:  Top Pharmacy Chains in Russia, # of Pharmacies, Monthly Sales Turnover

Rank Pharmacy Network (English/Russian) Number of Pharmacies as of 01.01.2024 Average Check (2023) (USD) Avg. Monthly Revenue per 1 Pharmacy (2023) (‘K,USD) Market Share (%) (2023)
1 Rigla / РИГЛА 4,080 8.98 37.66 7.2%
2 April / АПРЕЛЬ 7,434 8.00 18.93 6.6%
3 Implozia / ИМПЛОЗИЯ 4,508 8.23 26.66 5.6%
4 Planet of Health / ПЛАНЕТА ЗДОРОВЬЯ 2,378 9.44 49.68 5.5%
5 Erkapharm / ЭРКАФАРМ 2,214 9.70 44.37 4.6%
6 Neo-Pharm / НЕО-ФАРМ 1,241 11.02 68.81 4.0%
7 Group 36.6 / ГРУППА 36,6 1,974 9.57 42.02 3.9%
8 Yaris / ЯРИС 2,723 8.62 29.10 3.7%
9 Vita / ВИТА 2,588 8.56 28.02 3.4%
10 PharmLand / ФАРМЛЕНД 2,198 8.43 31.96 3.3%
11 36.7 & Maxavit / 36,7 & МАКСАВИТ 981 8.57 28.70 1.3%
12 PharmaImpex / ФАРМАИМПЭКС 790 8.57 33.05 1.2%
13 Zdorov.ru / ЗДОРОВ.РУ 101 20.84 245.89 1.2%
14 Social Pharmacy / СОЦИАЛЬНАЯ АПТЕКА 667 8.58 34.00 1.1%
15 Nevis Pharmacy / АПТЕКА НЕВИС 657 8.59 29.92 0.9%
16 Magnet / МАГНИТ 913 8.58 20.67 0.9%
17 AS Idea / АС ИДЕЯ 355 11.10 48.36 0.8%
18 Antey / АНТЕЙ 737 8.58 20.00 0.7%
19 Aloe VSS / АЛОЭ ВСС 574 8.58 25.42 0.7%
20 Monastyrev.rf / МОНАСТЫРЕВ.РФ 278 8.58 25.69 0.7%

Lower Pharmacy Retail Sales Compared to European Pharmacies Driven by Oversupply and Narrower Product Offerings

The monthly sales turnover per pharmacy in Russia ranges from $20,000 to $40,000. Chains located in the largest cities tend to have higher turnover. 

Compared to many European countries, the monthly retail turnover per pharmacy in Russia is relatively low. It is closer to levels seen in Serbia than in countries like France or Poland.  

There are a few likely reasons for Russia’s lower pharmacy turnover:

  • Russia has fewer than 2,000 people per pharmacy on average. Most European countries have 4,000-6,000 people per pharmacy. Consumer purchasing power is divided among a larger number of pharmacies in Russia.
  • Many pharmacies in Europe, especially in the United Kingdom, function as mini supermarkets selling not just medicines but also cosmetics, food, and other items. Russian pharmacies remain more specialized in medications.

Pharmacy Russia Messy

Pharmacy Russia Messy

Table:  Average monthly pharmacy sales in Europe for 2023

Country Average Monthly Pharmacy Sales (USD)
Italy 105,000
France 166,250
United Kingdom 327,650
Germany 288,750
Poland 72,000
Serbia 25,725

Targeting High-Potential Regions

Russia’s major pharmacy players utilize targeted regional strategies for their expansion plans:

  • Rigla focusing on major metro areas like Moscow, St. Petersburg and Kazan
  • April pharmacy chain growing quickly in vacation destinations such as Krasnodar Krai and Crimea
  • Implozia entering regions with affluent populations like Khanty-Mansi and Yamalo-Nenets

Outlook for Russian Pharmacy Retail Remains Strong

Despite economic challenges and sanctions stemming from Russia’s invasion of Ukraine, the country’s pharmacy chain industry appears poised for continued growth in the coming years. 

There are several key factors driving positive projections:

  • Rising incomes and resilient consumer healthcare spending even during difficult economic times. Russians are expected to continue allocating more of their household budgets to healthcare and medications.
  • An aging population and growing prevalence of chronic diseases is fueling demand for prescription drugs and pharmacy services.  
  • Market consolidation through mergers and acquisitions as leading pharmacy chains aim to expand their national footprints by acquiring smaller regional players. Companies like 36.6, Rigla, and A.v.e have significant expansion capital to spend.
  • Continued expansion of retail locations, particularly in smaller rural cities and towns that remain underserved by pharmacy chains compared to larger urban areas.

Forecasts suggest the Russian pharmacy market could grow at a compound annual rate of 5-8% in Rubles over the next five years. 

The growth will likely become more concentrated among the top national players as consolidation accelerates. Smaller regional chains will face aggressive acquisition drives or competition from expanding national footprints. 

Despite economic and geopolitical conflicts, Russians are expected to maintain healthcare and medication spending, fueling growth in this market segment.

About the Author

Author Photo

William Wickham

is a pharmaceutical industry veteran with over 25 years of leadership experience across distribution, marketing, and regulatory affairs. As CEO of Delta Medical, he has driven international expansion into Ukraine, Russia and Eurasia. Wickham also serves as Managing Director of Social Marketing Initiatives, utilizing digital strategies to enhance brand presence. His expertise in regulatory compliance and dossier submissions is leveraged as Scientific Advisor at Maxima Health Research CRO. Wickham's insights from key roles at major pharmaceutical companies make him an authority on the industry landscape.

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