Overview

Overview	2007	2008	2009(estimated)
Total Market Size	696.1	763	810
Total Local Production	80.3	82	84
Total Exports	16.7	19	20
Total Imports	632.5	700	755
Imports from the U.S.	15.5	17	19

In USD Millions; The above statictics are unofficial estimate based on Kazakhstan customs data and industry sources.

In 2004, the government adopted a program for reformation and development of the healthcare sector from 2005-2010.  According to the program, state healthcare expenditures will increase up to 4% of GDP by 2008, and providing the population with pharmaceutical products is one of the government’s priority tasks. Based on unofficial estimates, about $400 million was allocated from state and local budgets for purchasing pharmaceutical products in 2008.  This amount corresponds to approximately 50% of the total market. Local production is relatively insignificant, accounting for approximately 10-15% of the entire market. Local manufacturers produce basic pharmaceutical products that do not require innovative technologies. Market demand for specific complex pharmaceuticals is met entirely by imports.

Best Prospects and Services

The pharmaceutical market is divided almost equally into two major segments: state procurement and retail sales.

State Procurement

State procurement of pharmaceuticals is implemented through tenders announced by regional and city health departments. State procurement of oncology and diabetic medicines is funded by state-financed program. The existing model of procurement is highly decentralized with about twenty distributers supplying hospitals with medicines. This has resulted in an increase of logistics expenses, interrupted supply and unjustified prices for pharmaceuticals. In 2008, the Ministry of Health proposed to set up a single distributor for supplying pharmaceuticals to state health institutions. As planned it will start operating on the market from mid-2009.  The share of pharmaceuticals bought through the single distributor system will be gradually increased, reaching 70-80% by 2012. The remaining 20-30% of pharmaceuticals with a low consumption level will be directly purchased by hospitals.

All imported and locally produced pharmaceutical products must be registered in Kazakhstan. The agency responsible for registration is the Committee for Pharmacy under the Ministry of Health.  The National Center of Expertise under the Ministry of Health overseas the approval process for all pharmaceutical products to be registered.  This process includes a number of physiochemical, biological and clinical tests, which verify efficiency, safety and quality of imported pharmaceuticals.  Depending on the type of drug, a registration payment varies from $3,000 to $5,000. Generally a manufacturer pays the registration fee.

From 2007 to 2008, the market for pharmaceuticals in Kazakhstan increased by an estimated 10%, with almost all of the pharmaceuticals in Kazakhstan imported.  The U.S. market share was 2.5% last year, valued at almost $17 million.  Pharmaceutical imports in 2009 are expected to increase again by about 6%, reaching an estimated $810 million.    Likewise, U.S. imports are predicted to increase slightly to an estimated $19 million, with market share remaining at 2.5%.  Local production of pharmaceuticals in 2000 will account for only 10.5% of the total market.

U.S. companies producing the following pharmaceutical products have strong prospects.

• Vaccines and other immuno-biological medications for immuno-prophlaxis of population; 
• Anti-tuberculosis medications;
• Anti-diabetic medications;
• Oncology medications;
• Medications and dialyzers, and medical supplies for patients with renal deficiency and patients operated on for kidney transplantation.

Generally foreign suppliers participate in state funded tenders through their local distributors. 

Retail Sales

According to the statistics for 2008, the following pharmaceuticals are the best selling products on the retail market:

• Systemic action antibiotics
• Anticatarrhal pharmaceutical products
• Analgesics

Opportunities

       In January 2008 the World Bank approved a $117.7 million loan for Kazakhstan’s Health Sector Technology Transfer and Institutional Reform Project. The project will help introduce international standards and build long-term institutional capacity in the Ministry of Health and related healthcare institutions in support of key health sector reforms pursued by the Government of Kazakhstan. The project includes a Pharmaceutical Policy Reform Component of $4.2 million.  It will help improve the safety, efficiency, economy, quality, and affordability of pharmaceuticals in Kazakhstan by supporting reforms in pharmaceutical procurement, pricing, monitoring, information provision, benefit package design and quality control.