Public Policy and Access to New Drugs: Evidence from Russian Pharmaceutical Market. (Electronic Publications of PanEuropean Institute 2/2010)
(2010; 38 pages)


This paper presents some outcomes of research project held in 20082009 at the State University – Higher School of Economics. The aim of the project was to study factors that affect consumers’ choice on Russian pharmaceutical market and to explain reasons for strong regional distortions in drug consumption. The author discusses major factors that can explain difference in pharmaceutical market structure with special focus on drug policy evaluation (registration, price regulation and federal reimbursement program – DLO).

Different estimates show high rates of Russian pharmaceutical market growth during last 10 years, main driving forces being population purchasing power growth and federal spending on healthcare.

The paper proves that despite these positive trends Russian pharmaceutical market has inefficient structure compared to more mature markets: in general the share of original drugs is less then 40% in cash and less then 10% in kind, while branded generics with no proven efficiency dominate in the market. However Russian regions differ dramatically with respect to these rates.

To understand high variation of pharmaceutical market structure evidence from federal and regional drug policies are discussed in the paper. While regional authorities use different criteria for price regulation and markups limitations the study revealed that difference in price policy has no influence on consumers’ choice.

The study has shown that federal reimbursement program (called DLO) had no significant effect on drugs consumption in Russian regions principally due to small number of participants eligible for the DLO and high level of those who preferred to leave the program.

At the same time the results of empirical analysis showed that difference in regional market structure is explained by regional economic and social characteristics, such as the share of rural population and income related factors.

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