The pharmaceutical market of Kazakhstan is the biggest and the most structured one in Central Asia. However, it is weaker compared to the CEE market regarding the business environment and its amount.
The current article is based on our country report: "Kazakhstan Pharmaceutical Industry Overview 2016". The full-scale report is available for downloading for free here.
Kazakhstan pharmaceutical market started its formation in the middle 1990s. In 1994, the provision of drugs in the country was carried by the State Joint Stock Holding “Pharmacia” owning 1832 pharmacies. After the demonopolization of the Holding and privatization of its pharmacies, the national drug provision system was destroyed. In 1996, the transformation processes allowed developing a drug provision system based on market relationships. However, the system still experiences some transformations.
Currently, the pharmaceutical market of Kazakhstan is among the most developed ones in the CIS. Consolidation and evolution of vertically integrated companies can be seen in local producers, distributors, and pharmacies together with the improvement of service culture.
High economic growth in last years and the rise of the purchasing power of consumers has provided a significant boost in pharmaceutical sales and healthcare expenditures in Kazakhstan. Despite considerable growth dynamics (the market rose 14.3% in 2010-2014), the contribution of the pharmaceutical industry in the country’s GDP remains quite small – 0.08% in 2015. The main reason for this is a relatively small base of the Kazakh pharmaceutical market.
The unbalanced regional structure of the pharmaceutical industry which creates problems for supply and distribution is also seen as its weak point. In the South Kazakhstan region and Almaty about 81% of pharmaceutical products are produced, while the share of other regions is insignificant. Foreign companies have settled a dominant position on the market due to poor technologies and productive capacities of local producers.
From 2011 to 2015, the share of foreign products consumed on the retail market increased from 50.7% to 80%. Instability of local manufacturing was particularly unsafe in 2014 when the share of Kazakh companies on the market amounted to 8%. The situation still makes a big threat to the country regarding strategic security, as according to the WHO recommendation, local producers should provide at least 20% of pharmaceutical products in a country. Among the main pharmaceutical importers in 2015 were Germany, France, Russia, India, Slovenia, Poland, Spain, Egypt, Great Britain, and Ukraine. The share of importers from the CIS is declining over the years while the EU countries increase export volumes in Kazakhstan.
Source: Kazakhstan Pharmaceutical Industry Overview 2016 - download for free.