However, taking into account average annual inflation of 6.1%, analysts do not consider this result outstanding. The situation was uneven across different market segments.

Russian Pharmaceutical Market Overview

While retail showed relatively high growth rates exceeding inflation at about 7.7% by the end of 2023, the public procurement sector experienced a period of stagnation with total procurement volumes decreasing by 0.2% last year.

These disparate dynamics across market sectors, given the clear specialization of wholesale companies, naturally determined the development indicators of respective players in the rankings table.  Distributors with a focus on government and hospital sales saw lower growth or even declines.

There is a pronounced increase in market share for all companies in the TOP 5, with their total share increasing by 1.8% over the year. At the same time, the total share of companies ranked 6th to 25th in 2023 was adjusting downward by about 0.6%.

Factors Driving Growth of Top 5 Russian Distributors

The increased activity of companies within the TOP 5 was driven by three key factors:

• Sustained retail growth fueled by rising, albeit largely inflationary, consumer demand and activity
• TOP players have largely completed the client portfolio clean-up process undertaken over the past few years
• Wholesalers have been actively capturing market share freed up by distributors that exited the market in 2023

Analysts note that the total market share of exited distributors exceeds 3% but has not been released all at once, with the process still ongoing.

Recent Exits and Implications

One of the latest distributors to cease operations in 2023 was Godovalov. In early January 2024, the company was declared bankrupt and bankruptcy proceedings were initiated to liquidate assets. Also that month, a verdict was handed to Biotek founder and owner Boris Shpigel, who spent several years under arrest.

As a result of these developments, several warehouse facilities, production assets, and some retail assets are set to change owners. Regional warehouses could be of interest to wholesalers looking to expand their presence in certain locations. 

Production assets may also appeal to some wholesalers who displayed keen interest in production investments in 2023, including in the pharmaceutical substances market.

Outlook on E-Commerce Initiatives

Another key aspect of wholesalers’ operations – the development of online capabilities – is not expected to see active growth this year, analysts note. Pharmaceutical e-commerce entered a period of stagnation in 2023 and is unlikely to exit it in the next couple of years without regulatory changes. 

This fact partly drove the change in investment priorities for most large wholesalers last year, as they focused on expanding warehouse infrastructure and adjacent competencies, including production.

Table:  Ranking of Top 25 Russian Pharmaceutical Distributors

About the Author

William H. 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.