Analysis of competition and dominance in the russian pharmaceutical market

Abstract

The article presents an analysis of development trends, as well as the dynamics of dominance and competition among drug manufacturers, distributors, and pharmacy chains in the Russian pharmaceutical market. The authors analyzed the mergers and acquisitions that took place in the pharmaceutical market, as well as data on the shares of leading companies in each market segment from 2004 to 2021 to identify dominance and determine the level of differentiation in the dominant groups. The Linda and Herfindahl-Hirschman indices, as well as the SV matrix (strength/variety) and concentration coefficients were used as analysis tools. In the market of drug manufacturers, both domestic and foreign companies have significant obstacles to consolidating and increasing their share. In this regard, the dominance of manufacturers in the market was not found. The distributor market, which had been in a state of “natural oligopoly” for a long time (B4 quadrant), turned into a “red ocean” state (RO quadrant) due to the loss of aggregate market share by the dominant group. The pharmacy chain market, on the contrary, has consolidated, and in the last four years a dominant group has appeared on it, and now the market is moving from the “red ocean” state (RO quadrant) to the “natural oligopoly” (B4 quadrant). Major players such as the multi-gamma alpha company ASNA, the IRIS partner- ship, and the interconnected networks resulting from mergers and acquisitions began to stand out. The results of the analysis indicate an increase in the importance of pharmacy chains against the background of a deterioration in the positions of distributors, and also reflect the development trends of the pharmaceutical market.