The hospital market in Kazakhstan

A significant part of the hospital market in Kazakhstan (67% in monetary terms in 2015) belongs to the single distributor of SK-Pharmacy, established in 2009 to purchase medicines and medical equipment for their healthcare facilities within the guaranteed volume of free medical care. In 2013, 100% of the company's capital was transferred to the Ministry of Healthcare of the Republic of Kazakhstan.

The main activities of the Single Distributor: organization of open tenders for drug procurement within the guaranteed scope of free medical care, of storage of drugs in accordance with the requirements of proper distribution practices and legislation of the Republic of Kazakhstan, of logistics processes of medicines and medical devices in state medical organizations, creation of an information system for the integration of logistics processes of a single distributor, the customer and suppliers, as well as for obtaining up-to-date information on turnover, commodity balances.

State support is one of the main stimulating supports for pharmaceutical manufacturers in Kazakhstan, as public procurement accounts for 45% of the total market. In 2018 Kazakhstan companies formed 29% of the hospital market. They were followed by companies from Germany 14%, France 10%, Ireland 7% USA 5%, Italy 4%, India, Switzerland, Austria, Denmark 3%.

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From 915 purchased medicines and medical products 463 are of Kazakhstan production. Below Figure 10 there is an increase in the volume of purchases of a Single Distributor from 31.3 billion KZT in 2010 to 200.2 billion KZTin 2018 (preliminary data) (See Figure 9).

FIGURE 9.PURCHASE OF PHARMACEUTICAL PRODUCTS OF THE SINGLE DISTRIBUTOR

SK-PHARMACY IN PERIOD 2010-2018 YEARS

Source: (Single Distributor "SK-Pharmaceuticals", 2018).

In the structure of public procurement of medicines and medical products, the leaders are vaccines against diphtheria, tetanus, whooping cough, hepatitis B, poliomyelitis and hemophilia; pneumococcal vaccines; Pentaxim, a vaccine for the prevention of diphtheria and tetanus adsorbed; lyophilizate for the preparation of a solution for infusions; antitumor drugs; preparations for the treatment of diseases of the digestive tract and metabolic disorders;

preparations for the treatment of hemophilia A; drugs for the treatment of tuberculosis of various forms and localizations; preparations for the treatment of chronic hepatitis C; antiviral drugs for the treatment of HIV infection;

means for treating multiple sclerosis; preparations for the treatment of diabetes mellitus.

Among the top 20 leading drugs in terms of the value of public procurement only 4 are domestic drugs:

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- Immutin - antitumor drug, producer Nobel Almaty Pharmaceutical Factory (2.5 billion KZT);

- Capreomycin sulfate - powder for solution for injection, manufacturer of Chempharm-Santo (2 billion KZT);

- Duolazide - antiviral drug for HIV infection, producer AbdiIbrahim - Global Pharm (1.9 billion KZT);

- Cycloserin is an antibiotic produced by AbdiIbrahim - GlobalPharm (1.3 billion KZT).

Purchases of medical products from domestic manufacturers are also carried out: Dolce (a set of medical products for examination, surgical suits, gloves), Brando (surgical gloves, syringes), Juldyz Kenan Co., Ltd. (catheters), Super Pharm (bandages, medical examination kit, surgical clothing), Almerek (test tubes for blood products, blood collection tubes, scarifier, therapeutic spatula), Ecopharm International (medical needles, vacuum test tubes for hemostatic system examination) (Single Distributor "SK-Pharmaceuticals", 2018).

The main therapeutic directions for public procurement were malignant neoplasms, hemostasis disorders and diabetes mellitus. In addition, the expenditure on the treatment of tuberculosis, fermentopathy and diseases caused by the formation of blood clots in the vessels increased.

The main players in public procurement are Chempharm - purchase of 79 molecules, BaxterAG - purchase of 7 molecules, Nobel Almaty Pharm.

Factory - purchase of 40 molecules, F. Hoffmann LaRocheAG, Sanofi-Aventis, AbdiIbrahim GlobalPharm (KIDI, Annual report, 2018), (Single Distributor "SK-Pharmaceuticals", 2018).

Within the framework of the State Program for Forced Industrial and Innovative Development of the Republic of Kazakhstan and the Sectoral Program for the Development of the Pharmaceutical Industry of the Republic of Kazakhstan for 2010-2014, the main instrument of state support for the pharmaceutical industry of the Republic to ensure the market for products is the conclusion of long-term contracts by the Single Distributor SK-Pharmacy of the Ministry of Health of the Republic of Kazakhstan with investment projects that carry out the construction, modernization and reconstruction of enterprises in accordance with European GMP quality standards (KIDI, Annual report, 2018).

From 2009 to the present, a Single Distributor of SK-Pharmacy concluded 31 long-term contracts with 19 domestic manufacturers of pharmaceutical products for the supply of 765 medicines and medical products. A Single

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Distributor provides 1892 medical organizations within the guaranteed scope of medical care. There are 9 main warehouses in the republic and 13 transit warehouses. (Single Distributor "SK-Pharmaceuticals", 2018).

In addition to the Single Distributor, in Kazakhstan there are also financing outpatient, hospital and price tenders at the expense of regional budgets, which forms the outpatient sector of the market (about 30% of the hospital market).

In the context of the incidence rate, respiratory diseases amounting to 28%, diseases of the digestive organs - 8.4%, circulatory system - 7.2%, the genitourinary system - 6.8%, and infectious-parasitic diseases - 6% have the largest proportion. According to statistics (Ministry of HealthCare of the Republic of Kazakhstan, 2017), the main cause of death is cardiovascular disease, 51.9% (as in the rest of the world), namely, myocardial infarction, coronary heart disease, cerebral vascular lesions (strokes). And this despite the fact that annually newest drugs are produced for treating these diseases and are offered to patients free of charge within the framework of guaranteed free provision (100% reimbursement), despite the fact that cardiosurgical centers are opened in each regional center and quota operations are carried out (free of charge). Hence, the need for these drugs and surgical interventions is not yet satisfied (Ministry of HealthCare of the Republic of Kazakhstan, 2017).