The current Report uncovers the 2019 business trends of the pharmaceutical market of Armenia, overviews its healthcare system, portrays its epidemiology and demographics. It also depicts pharma regulation features in Armenia including a step-by-step process of the marketing authorization for pharmaceutical products. It provides insight into the country’s socio-political development since independence, describes recent economic trends, and provides the pharmaceutical market forecast for the next three years (2020-2022).
The Report is intended for industry executives, decision-makers, sales & marketing, and market access managers and other stakeholders. "Armenia Pharmaceutical Country Report 2019" will be useful for top-managers, business owners, consultants and other stakeholders of the Life Sciences industry, who analyze, plan and assessing opportunities of entering or investing in the Armenian pharmaceutical or healthcare markets.
The Report covers the 2013-2019 full-year data for the pharmaceutical market and provides a forecast for the period of 2020-2022.
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On January 14, 2019, after winning early elections with a newly-created “My Step” block, Nikol Pashinyan was again elected as Prime Minister of Armenia by a renewed parliament. He stated that over the following five years, the Armenian government would aim to create a competitive and comprehensive export-oriented economy that meets the highest technological, industrial and environmental standards. The government also intends to reduce poverty and unemployment in the country, as well as increase salaries and pensions.
Fighting against corruption was one of the critical points of the Pashinyan’s program. Criminal corruption investigations were initiated concerning former presidents Serzh Sargsyan and Robert Kocharyan and many other former officials. On Jul 2, the Armenian government announced the creation of a new anti-corruption body empowered to prosecute state officials suspected of bribery, fraud and other corrupt practices.
In mid-2019, Nikol Pashinyan has called for a radical reform of the country's judiciary claiming that too many judges are beholden to the country's former authorities. In 2020, a referendum, which aims to dismiss from office the chairman of the Constitutional court, will be held in Armenia. This should be another important step towards reforming the country.
In 2019, Armenia managed to achieve considerable growth in the economy of 7.6%. The main growth drivers were the services sector, which grew by 15% YoY, the industrial sector (9% YoY) and the commercial sector (8.9% YoY). Modest growth was observed in the construction sector (4.6%), while the agricultural and energy sectors decreased by 4.2% and 1.9% YoY, respectively. Corruption fight also contributed to the economic boost. Due to reduce of the shadow economy and disclosure of corruption schemes, tax revenues grew by 43.6% compared to 2017 and by 20% compared to 2018. Approval of the new tax code also created positive expectations in the business environment.
Incomes of the population increased thanks to a 5.8% YoY growth of wages. The government enhanced minimal wages by 20%. The Armenian dram remained stable, financed largely by the inflow of foreign currency and deposits to the banking sector. Inflation declined from 2.5% in 2018 to 1.4% in 2019.
Dashboard. Armenia's Real GDP and GDP growth rates + Armenian dram exhange rates (avg) (Sources: IMF, Statistical Committee of Armenia)
The World Bank expects that continued structural reforms and sound macroeconomic policy will keep inflation low and attract investment, supporting healthy GDP growth rates of over 5% for the medium term.
The retail segment of the pharma market of Armenia employs about 3.3 thousand workers. There are more than 1.7 thousand pharmacy organizations in Armenia; all of them are private. Only those pharmacies that have a production department are considered as pharmacies, others are pharmacy units. The biggest pharmacy chains in ARM are Alfa Pharm (170 POS; POS - Point of Sales - a retail pharmacy store/ regular pharmacy), Natali Pharm (100 POS) and Esculap (25 POS).
Dashboard. Armenia's International Trade with pharmaceuticals, Export and Import Source: UPharma Consulting, Statistical Committee of Armenia)
In 2019, the manufacturing of pharmaceutical products in Armenia rose by 1.7% vs. 2018 to USD 20.1 mln and made about 0.5% of the whole Armenian industry. It is also 0.2% of the total pharma production in the EAEU. At the same time, the Armenian pharmaceutical industry satisfies only 13% of the local market’s demand. Nevertheless, pharma production is considered as an export-oriented industry.
There are 19 registered producers of pharmaceuticals in Armenia. Most of the production companies in the pharmaceutical market are small or medium-sized, employing from 30 to 100 workers.
Armenia is one of those CIS countries where the pharmaceutical industry is actively developing, and the volume of pharma production is constantly growing. Armenia has an advantage in the production of herbal pharmaceuticals and APIs. The country also inherited a strong R&D potential since it used to be a scientific hub during the USSR.
Local producer, Liqvor was the first company to obtain the GMP certificate in 2013 from the MoH of Armenia. In 2014-2015, the Ministry of Health of Armenia certified Arpimed and Pharmatech companies. In December 2017, the GPM certificates were granted to Tufenkji Group and Bio-Chem.
Armenian companies are interested in implementing the high production standards to expand their external markets, as most of them export a big share of their production.
Dashboard. Weighted average cost of a pack (WACP) on the pharmaceutical market (retail segment) (Source: UPharma Consulting; IQVIA)
In Armenia, retail prices of pharmaceuticals are among the highest in the CIS. In 2019, the weighted average cost of a pack increased by 7.2% YoY to USD 3.76 per pack.
There is no regulation of retail prices of medicines in Armenia. Moreover, high prices of drugs in pharmacies promoted by the absence of their preferential taxation. Medicines are taxed at the regular 20% VAT rate.
The lower price segment (from USD 2 to USD 20) is the most selling one, making 60-80% of total sales. The retail mark-ups of cheap drugs are usually higher than of the more expensive segments.