Medicine & Pharmaceuticals

Medicine and pharmaceuticals are one the most important sectors of the Ukrainian economy. According to statistical data, as of 01.04.2008, 15,698 licenses issued by the Ministry of Health on the territory of Ukraine were valid, including 14,804 licenses for economic activity in the sphere of medical practice. As for the current owners of licenses, 10,001 are private medical establishments and 511 are state-owned. Mostly, licenses were issued by the Ministry of Health of Ukraine to dentistry practices - 8,434, obstetrics and gynaecology establishments - 2,776, dermatovenereology - 2,170, and surgery - 2,055. Therefore, at this stage, the major part of private medical establishments in the Ukrainian medicine is represented by dental clinics - 75%, diagnostic cabinets and laboratories – 15%, and medical and preventive clinics – about 5-10%. There are no more than 50 fully featured private clinics in Ukraine, including 10 large clinics (Borys, Medicom, Eurolab, Valeria, Oberig, Dobrobut, Omega-Kyiv, and Beregynia). It should be mentioned that the annual turnover of private clinics is about USD 1.0 bln. The number of private clinics is expected to double by 2012. On average, private medicine in Ukraine annually receives about USD 200.0 mln, the major part of which is foreign investments.

Thus, the main problems of private medicine in Ukraine are: difference in prices for medical services in state and private medical and preventive treatment institutions; the impossibility of making use of non-state clinical services for the wider population; low competition; and the absence of a coordinating authority to provide for the development of the private sector in the united medical space of the country.
 
According to data of the State Statistics Committee of Ukraine, by the end of 2008, 2,900 medical treatment facilities, 8,800 medical and preventive clinics and 518 health resorts, and recreation and retreat centres, were represented in Ukraine.

The pharmaceutical market has reached high indices in the development of the Ukrainian medicine. In recent years, rates of its growth in Ukraine have greatly exceeded similar indices in Eastern and Western Europe. Though the volumes of the Ukrainian pharmaceutical market are much lower than in Europe, foreign companies actively operate in Ukraine. 

According to the statistical data, as of 01.04.2008, 5,697 economic entities and 23,579 pharmacy institutions (chemists’ shops, pharmacies, branch pharmacies, and warehouses) were engaged in wholesale and retail trade in medicine. Furthermore, 84% (19,777) of pharmacy institutions were located in the cities and urban-type settlements.

State purchases comprise about 15% of the total volume of the Ukrainian pharmaceutical market, while the rest is bought by the population. The growth rate in medicine consumption in Ukraine is 20 - 25% per year. Despite such dynamics, the Ukrainian manufacturers’ share is constantly decreasing and today is around 25%, which was caused by a cancellation of the customs duty for medicine in 2005.

There is another trend on the pharmaceuticals market. Consumers increasingly more often pay attention not only to the price of products, but also to their compliance with quality standards, certification, and the manufacturer. This stimulates the interest of investors and large foreign pharmaceutical companies, meaning that while production costs in Ukraine are much lower than in Europe, the infrastructure and production capacities have been already formed and only require modernization. The constant growth of this market will provide stable demand for products and minimum sales expenses.

One of the priorities in the development of the Ukrainian medicine is the large-scale implementation of medical insurance. In the USA, about 85% of the population has medical insurance, while in Ukraine this index does not exceed 7%. Moreover, the obligatory medical insurance is not practically applied. The insurance market of Ukraine is quite promising, with annual growth of 20 – 25%. It should be noted that several insurance companies have opened own hospitals and medical centers. Despite the growth of interest in medical insurance sector services, market operators note large problems in this area. In the event of an insured accident, payments reach 70%, while losses in this insurance segment are 90%. There is also another risk for insurance companies’ activities in the sphere of medical insurance, as the Ukrainian government plans to introduce obligatory medical insurance for the population and form a single state insurance fund. In such a case, private insurance companies will lose most of their clients. According to research, 80% of Ukrainians prefer a state fund to private insurance companies.

One of the priority directions in the Ukrainian medical sector’s development is improvement of the quality of provided services, bringing it into conformity with ISO 9001-2000 (DSTU ІSО 9001-2000) requirements, and well as improvement in the management quality at medical institutions. The main problem of the Ukrainian medical institutions’ accreditation is its granting by a state body (directly controlled by the Ministry of Health of Ukraine) and not by special bodies empowered by the state in accordance with national legislation. However, recently, private clinics have applied to specialized international certification bodies to form and implement an effective quality management system, which proves the intentions of medical institutions to enter the international level.

Nanomedicine is developing quite dynamically and successfully in Ukraine, and is of great interest not only to scientists, but the population as well. Today, nanomedicine envisages applying nanotechnologies in monitoring, diagnostics and the treatment of diseases. The development and further implementation of nanotechnologies in the Ukrainian medicine and pharmaceutics are a basis, as these technologies can be widely used in medical centres, pharmaceutical companies, rehabilitation centres, and other enterprises that manufacture medical goods. In the nearest future, nanotechnologies are expected to play an important role, being the driving force in medicine.

 Table 1. Dynamics of medicine production, tons