Kazakhstan Pharmaceuticals and Healthcare Report Q2 2013

BMI View: Kazakhstan remains the most attractive pharmaceutical market in Central Asia, in terms ofthe overall regulatory environment and ease of doing business compared to neighbouring countries. Thedomestic market is constrained by the relatively small size of the population and daunting infrastructurechallenges. Pending World Trade Organisation (WTO) accession, expected as soon as this year, as wellas Kazakhstan’s membership in the Customs Union (CU) with Russia and Belarus should drive continuedimprovements in regulation and harmonisation, assuming the contradictions of membership in the twogroups (such as common external tariffs) can be ironed out. Meanwhile, foreign investors have acquiredcontrolling stake in the three largest pharmaceutical manufacturers – Chimpharm, Nobel and GlobalPharm – and have committed to expanding manufacturing capacity and creating Good ManufacturingPractice (GMP)-complaint facilities. The government announced in February 2012 that it would reviewoptions for new pricing regulations to address high prices, a process that both domestic and foreignplayers will be watching closely.

Headline Expenditure Projections

Pharmaceuticals: KZT245.63bn (US$1.65bn) in 2013 to KZT273.2bn (US$1.86bn) in 2014; up12.5% in local currency terms and 12.9% in US dollar terms. Forecast adjusted up slightly dueto updated macroeconomic forecasts.