As the Russian government focuses on strengthening the local pharmaceutical industry,many global pharmaceutical companies are taking an increasing interest in the region, partnering with local companies and investing millions of dollars in maintaining a stake in this growing market. There are, however, a number of considerations for those companies interested in operating in Russia, the most recent of which is the healthcare reform law (“The basis of health care provision protection”) due to come into force on 1st January 2012.
This law affects some aspects of how healthcare is provided, as well as state control over medical devices. Importantly for pharmaceutical companies it also affects the relationship between healthcare professionals (HCPs) and the pharmaceutical industry.
Under the new law, pharmaceutical representatives will not be able to make sales calls to HCPs at their places of work, although medical education initiatives will be able to continue, and meetings can take place offsite. HCPs are not permitted to accept gifts from pharmaceutical representatives, or product samples to pass on to patients.
According to an article (in Russian) on Wiki-Meds.Ru, this change is not necessarily a cause for concern. The article quotes Nenad Pavletic, President of AstraZeneca Russia, and explains how the current – and continuing – aim of HCP meetings with pharmaceutical representatives should be medical education and discussion of adverse events.
Despite the optimism of leaders such as Pavletic, it is likely that many pharmaceutical companies will have to make some changes to their educational and promotional programmes, and that these may seem daunting. Another point to take into consideration here is the increasing de-centralisation of healthcare in Russia. In her presentation at the “Russia: The Inside Story” Webinar, Lucia Railean, General Manager for Cegedim Russia and CIS showed how regional governments are increasingly responsible for medicines budgets. This means that market entry from the regional level is possible, without initial inclusion on the federal medicines list – and equally, that federal approval does not necessarily translate into regional sales, particularly where regions are short of funds.
How then, should pharmaceutical companies adapt their marketing strategies to suit the changing environment in Russia?
Research shows an extremely high level of social media usage amongst young Russians, and the mobile penetration rate across the country exceeds 100%, nearing 200% in Moscow and St Petersburg. I asked Vsevolod Tyupa, Head of Life Sciences and Senior Associate at CMS Russia, whether he thought there could be a growing role for digital in the new pharmaceutical marketing environment – such approaches would fit well in a large country with distributed centres of population. “Whilst digital communication is not restricted by the new law, not every Russian hospital or doctor has access to broadband or smartphones, and so a strong focus on digital communications may not be advisable” he explained. “The social media “boom” in Russia affects mostly the younger generation, and it is more about city dwellers and home Internet users, than employees using digital methods at work in state and municipal hospitals in small Ural, Siberian or Far Eastern towns”.
Indeed, the medical profession has a rather different image in Russia than in Western Europe or the US. As described in a country report produced by PMLive, there is no licensing process for Russian doctors, and practitioners are often poorly paid, with out-of-date qualifications and little incentive to develop their careers or skills. The report also states that only 7.5% of Russian physicians use the internet privately or professionally, a sharp contrast to other countries.
Conversely, drug distribution companies and pharmacies are relatively influential in Russia. Pharmacists can supply many medicines without prescription, which fits with the cultural tendency towards self-treatment, and they can also suggest cheaper alternatives to prescribed medicines, effectively over-ruling doctors’ suggestions.
At first glance, operating profitably in Russia’s pharmaceutical market in 2012 does not appear to be straightforward for foreign companies when the new law, the complicated healthcare and medicines funding systems are taken into account, along with the sheer size of the country and the great diversity in terms of living standards and access to digital methods of communication. However, the process for developing a successful engagement strategy for the Russian market is little different to doing so for other markets and situations – the central elements remain as described by the Creation Discovery model:
- Determine insights – conduct research. In Russia, the gathering of regional/local insights is particularly important
- Define strategy based on research outcomes
- Direct stakeholders – identify and plan how to meet the needs of federal, regional, municipal, hospital/clinic and other stakeholders. Also, have a clear view of industry and national regulations, and work within these
- Design, develop and deploy – Plan, implement and monitor suitable initiatives. Measurement information can be fed back into the planning process
Determining the role of digital methods of communication within the wider engagement strategy does not require a new approach for specific geographies either – when the focus is placed on communicating with stakeholders in an appropriate manner, using appropriate methods and at appropriate times, rather than on showcasing the latest trend, the role that should be played by digital is often revealed. In Russia, digital may be a niche area for the time being, however, with rising broadband penetration and high levels of mobile use, it could be an important tool for the near future.