The wholesale pharmaceutical market in Kazakhstan is set to undergo a phased deregulation, as reported by the business information center Kapital.kz, citing the press service of the Agency for Protection and Development of Competition.
To assess the competitive landscape, the Agency conducted an analysis of the wholesale pharmaceutical services market. The findings indicated a strong interest from business entities, with 51 of them holding a dominant position, having market shares ranging from 15% to 75.4%. The agency believes that excessive government regulation, which hinders the development of price competition, and a high dependency on imports, reaching 81.8%, are the main causes of monopolization.
“The issue of excessive price regulation is being addressed by the Agency in collaboration with the Ministry of Health as part of the Roadmap for Competition Development, which has as one of its key objectives the phased deregulation of prices by 2026. The first phase was implemented in 2023. According to the authorized health authority, the results showed that out of 302 deregulated medications, 208 were sold in pharmacies at an average of 11.5% lower than the previously approved maximum prices,” the Agency for Protection and Development of Competition (AZRK) reported.
Starting in January 2025, the Ministry of Health plans to expand the list of deregulated drugs to 952.
“The Agency believes that the high level of import dependency is due to constraining factors such as the lack of domestic production of pharmaceutical substances, which prevents the complete localization of local drug manufacturing. Additionally, domestic producers (ODP) are producing low-margin generic drugs that are unable to compete with foreign counterparts and remain unrequested outside of government contracts and beyond the borders of the republic. As a result of these factors, the production volumes of ODP decreased from 31.9% to 18.2% in 2023,” the AZRK confirmed.
The Agency considers it advisable to strengthen the work of the authorized health authority in implementing measures aimed at saturating the Kazakh market with priority medications produced domestically.
In 2023, expenditures for timely provision of medications to the population amounted to 434.6 billion tenge, which is 53.6 billion tenge more than in 2022.