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Exports of medical goods from Russia: general trends

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The fact that Russia is one of the largest exporters of oil, gas and other raw materials is known to everyone. But only narrow specialists know about what other goods we supply to foreign markets. Meanwhile, over the past ten years, Russia has been slowly but surely increasing its presence in the global market for medicines and medical equipment. For example, over the past two years, exports of these groups of goods have grown by about 10% annually.

Last year, there was a sharp jump in the export of drugs to Ukraine, namely, to Donetsk and Lugansk People's Republics: only in the first half of 2015, Russia supplied drugs for a total of 590 million rubles.

However, despite this, in general, the statistical indicators still cause suspicion: according to data for 2013, the volume of the Russian market of medical services amounted to 1.38% of the world market and 4.27% of the European market, in terms of value indicators the import of medical equipment to the Russian Federation is more than 20 times higher than the export.

Equipment and medicines: global demand and Russian supply.

Export of medical goods is divided into two main groups: equipment and medicines. Possibilities of exporting goods of both groups depend on the state of production of medicines and medical equipment in the country. Unfortunately, it is necessary to admit that Russia today is practically unable to compete with other manufacturers on the world market, which is due to the huge difference between medicines in demand in the world and those produced in Russia. Thus, in recent years there has been a trend of growing demand for innovative medicines; however, according to the Federal State Statistics Service, in the period from 2010 to 2012 the share of innovative medicines manufactured in Russia fluctuated at the level of 8% of the total volume of manufactured pharmaceutical products.

The main market for domestic medicines is the CIS countries, and in 2012 the export flow in these countries accounted for about 80% of total exports. They are trying to improve the situation with the production and export of Russian medicines through the implementation of the strategic program "Pharma 2020", one of the goals of which is to increase the export of pharmaceutical products by 8 times compared to 2008, that is, to achieve the planned figures, Russian companies engaged in exports need to sell pharmaceutical products in the foreign market for $3-3.4 billion each year.

As for the export of medical equipment, it can also be divided into two subgroups: devices and devices used in medicine, surgery, dentistry or veterinary medicine, scintigraphy equipment, electromedical and vision research devices, and equipment based on X-ray, alpha, beta or gamma radiation intended for medical applications, Surgical, dental, or veterinary use, including radiographic or radiotherapy equipment, x-ray tubes and other x-ray generators, high voltage generators, shields and controls, screens, tables, chairs, and similar items for examination or treatment.

In recent years, there has been a small but significant breakthrough in this field, as there is a trend of increasing export of medical equipment. However, the main importers of these goods are still the countries of the former USSR (they account for over 70% of exports). Other major importers of Russian medical equipment are the Czech Republic, Poland, Romania and Serbia, as well as France, Germany, and Switzerland.

The prospects for expanding exports depend directly on the structure of the global medical services market.

World market structure: prospects for export expansion.

The market of medical equipment and services related to medicine is currently characterized by a certain duality: on the one hand, it has been maintaining a rapid rate of growth and development for more than five years (on average, 5.1% per year in the period 2009-2013), on the other hand - the largest segments of the market, that is, the United States and Europe - are almost fully formed, and therefore have almost no potential for expansion.

The situation is quite different with the market of medical equipment and services in the Asia Pacific region, which, at the expense of China and India, is of great interest to potential exporters, which makes it obvious that there is a need to compete for supplies to China, India and other countries in the region. Certain steps have already been taken in this direction: in 2011, the turnover of pharmaceutical trade between Russia and China exceeded $950 million. Given the fact that in recent years the Chinese market of medical equipment has shown very high growth rates, China looks like one of the most attractive partners for Russia in this area.

As for the export of medical products to India, there is also a positive trend. The potential of both countries as countries-importers of the Russian medical equipment and pharmaceutical goods is huge, and, taking into account that these are the most attractive markets for all players, it is necessary to increase competitiveness of the Russian goods and to win a firm place in extremely short terms. So far, in general, the situation with the export of Russian medicines and equipment looks rather alarming. Firstly, for several years there is a tendency of impossibility to overcome the market inertia: export of medical equipment and pharmaceutical goods from Russia is carried out mainly to the countries of the former USSR; secondly, there is a decrease of export to European countries, such as Moldova, Ukraine and Baltic countries, which threatens to gradually lose these markets; thirdly, Russia still cannot successfully compete with the USA and Europe in the field of innovative and advanced medical technologies.

But there are also positive aspects, which include, first of all, successful cooperation with the most rapidly developing importing countries of this group of goods, namely, China and India.

If we take into account the fact that the Presidential Commission for Modernization and Technological Development of the Russian Economy has identified "Medical Technology" as one of the five priority vectors of modernization of the Russian economy, it is quite possible that in the near future it will be possible to achieve a serious increase in the share of exported goods in this sector.

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