PHARMA POSSIBILITIES
Azerbaijan is working to take steps toward achieving greater independence in a national pharmaceutical industry, currently dominated by imports.
Azerbaijan's healthcare spending has drastically increased over the past 10 years, totaling AZN665 million in 2014. The government has also increased the state budget allocation of healthcare funds by 3.2% and 8.7%, respectively, over the past two years alone, proving that its commitment to making changes in this industry is continuing each year. One of the most salient focal points in the healthcare field deals with the current state of the pharmaceutical industry in Azerbaijan. Pharmacies are the most popular consumer health outlets in Azerbaijan by far, with around 2,000 pharmacies located throughout the country. That aside, the current Azerbaijani market is characterized by massive amounts of foreign imports, with only a tiny portion of medicine produced domestically. Most of the pharmaceutical products available in Azerbaijan come from Germany and Russia, although many other European, CIS, and Asian countries are large contributors as well. In raw numbers, imported medicines comprise 97% of the market share in the country. Azerbaijan is working to close this production gap through independent and partner oriented projects.
The lack of domestic production is currently problematic for Azerbaijan because it raises the prices of consumer medicines for local citizens. The exact same medicine available for purchase in Azerbaijan would likely cost less in Georgia or in a nearby CIS country. The solution for this problem, manufacturing pharmaceuticals domestically, has been an elusive task for Azerbaijan over the past decade. However, alongside the large drop in the price of a barrel of oil, Azerbaijan has a renewed focus and fresh motivation to make some concrete steps in the right direction with regards to the pharmaceutical industry.
The Deputy Prime Minister made an announcement to the nation in which he spoke about initiating talks to commence the production of medicines in Azerbaijan. His current plan for this endeavor involves utilizing the strong business relationships that Azerbaijan has with upstanding foreign pharmaceutical companies. The resulting companies in Azerbaijan would be based off of the models created, or even started, by select foreign corporations. Meshing perfectly with the Deputy Prime Minister's vision, many different countries have already taken notice of this appealing sector. Iran and Russia have extended offers to Azerbaijan in the interest of producing medicines within the country. Russia sent a trade delegation of pharmaceutical companies to Azerbaijan in order to meet with the Healthcare Ministry and discuss business opportunities. Iran has shown interest in opening a plant in Azerbaijan expressly for the purpose of manufacturing modern medicines. Experts have noted that joint ventures between foreign companies and Azerbaijan could be created without much difficulty using the new and technically advanced industrial parks in the country. To help ensure the success of the domestic production of medicine, tax exemptions for pharmaceutical producers and free customs duties were some further ideas that the government has discussed. All of these smart new ideas for the promoting of this industry underscore a newfound proactivity on behalf of the government. As another positive step, the government cracked down on pharmacies that were selling non-registered medicines or allowing the sale of certain medicines to consumers without prescriptions. The government also placed regulations on the prices of all medications since September of 2015, effectively increasing their control on the market.
While the government and other firms work to make Azerbaijan less import-reliant in the pharmaceutical industry, other companies are looking to improve the current pharmacy model. In this vein, VITTA Scientific Technical Company is creating a mobile app called Aptek. As pharmacies around Azerbaijan begin to make the transition to electronic databases, Aptek will enable consumers to search for medications from the palm of their hand. This app will let consumers know which specific pharmacies have the medication they are looking for, the cost of the medication at each pharmacy, and it will provide the phone number on the screen of the pharmacy as well. Advancements in this field will continue to pile on as the domestic industry makes strides to become increasingly self-sufficient.
PHARMA POSSIBILITIES
TABLE OF CONTENTS
Year In Review
Good Times Ahead
<strong></strong><strong>In a year dominated by the overarching theme of low hydrocarbons prices, Azerbaijan showed resilience and verve in putting in place bold measures both to counter the slump in energy prices and put its economy on a surer footing.</strong>
read articleReview: Diplomacy
Operation Outreach
In 2015, Azerbaijan's military budget increased by a notable 27%, to $4.8 billion, or 17.9% of the government's total budget for the year. The first Azerbaijan Defence Exhibition (ADEX 2014), drew over 200 companies from 34 countries, including Russia and the US.
read articleInterview
Rufat Mammadov, President, Azerbaijan Export and Investment Promotion Foundation (AZPROMO)
TBY talks to Rufat Mammadov, President of the Azerbaijan Export and Investment Promotion Foundation (AZPROMO), on large-scale events and their ability to attract FDI and the potential Iran may hold.
read articleReview: Banking
More Interest
In a sector faced with relatively flat growth for 2015-16, new opportunities are still there aplenty, led by the nascent Islamic banking sector, e-banking, and microfinance initiatives. Together, these areas should make banking more diversified and less reliant on a buoyant energy sector for its capital inlay.
read articleReview: Capital Markets
Taking Stock
As Azerbaijan grapples with the knock-on effects of low hydrocarbon prices, the Baku Stock Exchange (BSE) finds itself at the center of the country's efforts to stave off a budget deficit this year. In January, the government announced plans to sell $500 million worth of bonds on the BSE.
read articleInterview
Khanlar Fatiyev, , Chairman of the Supervisory Board, Ganja Automobile Plant Production Association
TBY talks to Khanlar Fatiyev, Chairman of the Supervisory Board of the Ganja Automobile Plant Production Association, on the role of the plant in driving growth in the non-oil sector.
read articleReview: Agriculture
Lots More
Farms across the country are pursuing a policy of increased yields for year-round fruit and in the wheat harvest to stave off an over-reliance on imports. With carefully targeted increases in exports, better routes to port and to market, and greater sophistication of agricultural facilities, farming could soon be the morning star of Azerbaijan's diversified economy.
read articleReview: Education
Baku to School
Azerbaijan's culture has always harbored a deep respect for educational values. This is embodied in the country's Azerbaijan 2020 mission statement, which seeks to raise standards across the sector and introduce ICT as a standard part of the learning experience at all levels.
read articleInterview
Elkhan Mammadov,, Secretary General, Association of Football Federations of Azerbaijan (AFFA)
TBY talks to Elkhan Mammadov, Secretary General of the Association of Football Federations of Azerbaijan (AFFA), on the experience Azerbaijan is gaining in hosting international events.
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