Five pharmacy chains occupy 70% of the pharmaceutical market in Ukraine: how will this affect consumers?

In Ukraine, the five largest pharmacy chains have occupied about 70% of the market for medicines and own almost half of all pharmacies. Proxima Research analysts provided these data. Experts express concern since, with the increase in the number of chain pharmacies, affordable Ukrainian medicines disappear from the shelves, and buyers are offered expensive imported analogs and dietary supplements.

According to a study by Proxima Research, by the beginning of 2024, the five leading pharmacy chains: “Podorognyk,” “911”, “Apteka Nizhkih Tsen,” “Bazhaemo Zdrowia” and “Apteka Dobry Dnya” control 68% of the turnover of all medicines and almost 46% of pharmacies in the country.

Forecasts for the next two years look even more alarming: it is expected that these companies will be able to concentrate more than 80% of all sales and 57% of pharmacies. This indicates the rapid transformation of the Ukrainian pharmaceutical market into an oligopoly, where a few large players dictate conditions to others.

According to the ElitExpert agency, the Podorozhnyk network operates 2,823 pharmacies, occupying 18% of the medicine market, while 911 has 1,813 pharmacies (13.7% of the market), Low Price Pharmacy has 1,400 (17.1%), and We Wish You Health has 124 – 1,123 pharmacies, which is 7.5% of the turnover.

Experts warn that such concentration may lead to the crowding out of the market of more affordable domestic medicines. A journalistic investigation has revealed that it is becoming increasingly difficult to find affordable Ukrainian analogs of well-known imported drugs in Kyiv pharmacy chains. For example, the Hungarian “No-shpa” is available in more than 1,300 pharmacies, while the Ukrainian analog of drotaverine is available in only 122.

According to the Tabletki.ua website, the situation is similar to that of other popular medications: cheaper versions disappear from the shelves or are present in a small number of points. At the same time, pharmacy chains are actively offering expensive imported alternatives, vitamins, and dietary supplements.

Analysts suggest that large chains have exclusive conditions with major distributors and receive additional bonuses for promoting certain brands. This is also confirmed by visual observations: such chains often disguise medicines under their brands, and the markup can reach 300-600%.

Journalists also noted that pharmacy chains open under different names but often have the same owners. For example, “Podorognyk” operates under the brands “Zdrovaya Simya,” “Iva-Pharm,” “And BAM,” while “Apteka Nizhkih Tsen” is under “ANC,” “Kopiikka,” “Kulya,” and “Blagoddya.” Thus, competition in the market looks conditional—several owners actually control it.

“Pharmaceutical giants set prices and promote what is beneficial to them, not to consumers. Affordable medicine in Ukraine is disappearing, with it the opportunity for people to have equal access to treatment”, – the investigation authors emphasize.

StopKor has prepared requests to the Ministry of Industry and the State Geological Survey to clarify information about pharmacy chains’ activities and relations with state bodies. After receiving a response, the results will be added to the material.