Health & Beauty

The China Medical Insurance Chamber of Commerce predicts that in the second quarter of 2022, there will be a phased decline in the international trade of medicines between China and Russia. However, in the later period, as Sino-Russian international trade gradually adapts to RMB settlement, relevant Russian policies are adjusted in place, and the government's plan to purchase and replace old medical equipment is accelerated, Sino-Russian international pharmaceutical trade and industrial cooperation will maintain a healthy development trend.

According to the medical insurance chamber of commerce, in the early stage of the sanctions, the cost of imported raw materials and medical device parts by Russian pharmaceutical companies rose by 30% to 35%.

In order to prevent the weakening of the supply of Western multinational medical companies to the Russian market and to strengthen the stability of the supply of key products in the market, and to avoid the impact on people's health due to external sanctions, the Russian government has taken a series of measures. Enter to make adjustments.

In early April, Russia passed a resolution on simplifying the national registration process for some medical devices, simplifying the registration process for medical devices imported or produced in Russia, and shortening the document review time from 50 working days to 22 working days. The list of medical devices involved in simplified registration will be determined by a specialized interdepartmental committee comprising the Russian Ministry of Health, Industry and Trade, Ministry of Finance, Ministry of Economic Development, Federal Antimonopoly Service, Federal Customs Service and Federal Tax Service.

In addition, Russia will further open up cooperation on oncology drugs and access procedures for related drugs.

Most Chinese companies set up branches in Russia

The Russian medical market is highly dependent on imports. Western multinational pharmaceutical companies have monopolized the Russian medical market for nearly 30 years. In the past ten years, the Russian government has been committed to revitalizing local manufacturing capabilities, increasing support for import substitution of drugs and medical devices, frequent policies and stricter registration, in purifying the market, revitalizing local manufacturing, and ensuring the health and safety of the people in the country. played a positive role. Many policies also have an impact on the export of Chinese products. The registration time is long, the cost is high, the traceability system is constantly improving, and the export cost of enterprises is increasing.

On the basis of meeting customer needs and complying with the new regulations of the Russian market, Chinese enterprises have continuously improved product quality, attached importance to brand building, and strengthened after-sales service, winning a good reputation.

Over the years, the Russian government has implemented the "three-party exclusion" and "two-party exclusion" policies in the procurement process to encourage foreign companies to carry out localized production in Russia. There are not many cases of Russian investment and construction of factories, but many companies have set up branch sales offices, and the sales volume has increased.

Uncertainty of cooperation

Today, with the deepening of Sino-Russian pharmaceutical international trade and industrial cooperation, the tense Russian-Ukrainian situation and Western sanctions have cast a shadow over the Sino-Russian cooperation in the medical field, and have also brought some uncertainty.

Although the trade data in the first quarter is good, the second quarter will face many challenges. The export of Chinese enterprises is weak, and they encounter obstacles in transportation, customer communication, payment settlement, investment, etc., and customers' ability to pay is significantly weakened. There are also some companies holding a wait-and-see attitude, worrying that cooperation with Russia will affect their business in Europe and the United States.

The new situation contains six major opportunities

In fact, recently, Chinese enterprises have been paying more attention to the Russian market, and the Russian side has increased its demand for Chinese products and its willingness to cooperate with the industry. The main opportunities are as follows:

1. With the deepening of bilateral economic cooperation between my country and Russia, the quality and service of our products have been recognized by the Russian market, and Russia has expressed its willingness to strengthen cooperation with Chinese medical enterprises. Relevant policies are beneficial to Chinese companies.

2. Medical products are a rigid demand. The Russian government will purchase many urgently needed products, such as oncology drugs, rare disease drugs, vaccines, anesthesia and breathing in medical equipment, surgical instruments, implantation/mediation consumables, imaging equipment, special products for newborns, etc. product. Enterprises can take this opportunity to strengthen market development and investment, participate in more exhibitions and matchmaking meetings in Russia, and increase publicity exposure.

3. Compared with medicines, medical device products have many subdivisions, registration procedures, post-market supervision, and standards are different, research and development, production, and cooperation are more inclusive, and there is a relatively large space for trade and industrial cooperation.

4. The international competitiveness of medical devices is strong, the after-sales service link is very important, the industrial chain is long, and the degree of cohesion of cooperation is high. Russia's domestic medical device manufacturing capacity is relatively weak. Once Russia relaxes relevant policies, it can help Chinese enterprises to enter the Russian market in stages and realize the growth of general trade.

5. Western sanctions have provided China's high-end medical equipment with an opportunity to compete on the same stage. In addition to the product itself, it also provides space for cooperation in key technologies and core components.

6. The Russian market has potential and has a radiating effect on the CIS countries. It is also an important country along the "Belt and Road". Chinese enterprises also regard Russia as an important part of their internationalization. Leading companies in some sub-sectors can try to discuss joint ventures with customers and plan investment plans in Russia, such as insulin, blood products, orthopedic products and imaging equipment.

Sino-Russian trade returns to rationality

In 2021, the global epidemic will become normalized, and the international trade of medicine between China and Russia will return to rationality (excluding the impact of the Russian epidemic in 2020). After 2019, it will continue to show a healthy development trend. Russia has always been in the top 15 in my country's export market. In 2021, the Sino-Russian pharmaceutical import and export trade volume will be 2.87 billion US dollars, a year-on-year decrease of 21.56%, of which my country's exports will be 2.83 billion US dollars, a year-on-year decrease of 21.38%. Although the export of masks, protective clothing, COVID-19 testing reagents, and X-ray machines related to the fight against the epidemic has fallen sharply, the export data of medical devices has been affected, but traditional Chinese medicine, Western medicine and other medical device products have resumed growth. The export of my country's raw materials to Russia has returned strongly, and the demand for critical treatment and rescue drugs is strong. The export of Chinese patent medicines and health products for the treatment and prevention of related diseases to Russia has greatly increased, which has become a highlight.