Fight between lobbyists destabilises Belarusian pharmaceutical market
Private pharmacy chains and wholesale distributors dominate Belarus’ pharmaceutical – the largest of them control most medical imports. From time to time, lobbyists of domestic drug producers clash with large private importers, who often have close links with the nomenclature. The Belarusian authorities attempt to relieve tension by creating favourable conditions for Belarusian drug manufacturers on the EAEC pharmaceutical market.
The Belarusian Health Ministry has established full control over whether doctors prescribe Belarusian drugs.
In recent years, the Belarusian drug market has been growing rapidly and bringing high profits. In 2014, the market’s sales volume was over USD 1 billion and the authorities anticipate its further growth in the coming years. The retail segment of the pharmaceutical market was particularly profitable. Pharmacies mushroom in Minsk and large cities as the market share of private companies increases.
The Health Ministry reported that in January 2015, the share of Belarusian drugs on the domestic pharmaceutical market was 39% (37.6% in 2014). President Lukashenko has ordered to raise this share up to 50% by the year-end; Health Minister Zharko, however, said that would be an extremely challenging task.
Large private business is reluctant to invest in the drug production, however, it is broadly represented in retail and wholesale trade. Specialists estimate, that ten private wholesalers control about 75% of drug imports in Belarus. In addition, many pharmacy chains are owned by or have connections with the nomenclature. For example, the owner of "Iskamed", leading Belarusian pharmaceutical wholesaler and retailer, is Sergey Shakutin, half-brother of senator and prominent businessman Alexander Shakutin. In addition, the company often participates in public tenders as a mediator between foreign manufacturers and state pharmacy chains and hospitals.
In Belarus, more than 28 industrial drug producers, including two state-owned companies and three with state share over 50%. Among the five largest Belarusian drug producers, two are companies with foreign capital. In addition, one of the most prominent Belarusian businesspersons Yury Chizh also owns the "TriplePharm" pharmaceutical company, which has a negligible market share.
Belarusian drug producers are interested in simplified access to the EAEC pharmaceutical market, which will be launched on January 1st, 2016. The original plan was to open the market by 2025, but that did not suit the Belarusian representatives. In particular, former Vice-Prime Minister Sergei Rumas said, "the Health Ministry has assured us that there are no great dangers for our market. Therefore, we are approaching the creation of a single market in this area, and we were able to shift the launch on January 1st, 2016”. By that date, the Health Ministry should create favourable conditions for Belarusian producers to secure their positions on the domestic market.
If Belarusian drug producers enter the EAEC market tension between domestic producers and importers over domestic market might be relieved. Until then, the Health Ministry will continue to issue and abolish its orders, because neither lobbying group has a decisive advantage.
The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.
Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.
Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.
In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.