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Drugs and Pharmaceuticals

In 2010, the government approved a draft program for the development of the pharmaceutical industry for 2010-2014. According to the program, the government’s priority task is to supply 50% of the market with locally produced medicines and healthcare products by 2014. To meet this goal, modernization of existing and construction of new pharmaceutical production facilities are planned. In January 2014, Kazakhstan adopted international GMP (Good Manufacturing Practice) standards for drug manufacturing.

Kazakhstan joined the Customs Union (CU) with Russia and Belarus in 2010. Entrance to the Union has affected the pharmaceutical market as customs fees for imported pharmaceuticals into CU member countries increased from zero to 5% as of January 1, 2014 and are planned to reach 10% in 2015. It is assumed that during these years local production will increase and new production lines adhering to international standards will be developed. This local production is expected to concentrate in a wide niche of generics, which account for 85% of the overall market.

Accurate 2013 data on the amount of funds allocated from State and local budgets for the purchase of pharmaceutical products are not yet available. Based on figures from previous years, government purchases of pharmaceuticals account for approximately 50% of the total market. Local production is relatively insignificant, accounting for only 20% of the market in 2013. It is expected to account for 30% of the total market in 2014. Local manufacturers produce basic pharmaceutical products that do not require innovative technologies. Market demand for specific complex pharmaceuticals is met entirely by imports. The largest share of imported pharmaceutics belongs to Germany (20.5%) followed by France and Russia with around 10% each.

All imported and locally produced pharmaceutical products must be registered in Kazakhstan. The agency responsible for registration is the Committee for Pharmacy under the Ministry of Health. The National Center of Expertise under the Ministry of Health overseas the approval process for all pharmaceutical products to be registered. This process includes a number of physiochemical, biological, and clinical tests, which verify efficiency, safety, and quality of, imported pharmaceuticals. Depending on the type of drug, a registration payment varies from $3,000 to $5,000. Generally, the manufacturer pays the registration fee.

From 2012 to 2013, the market for pharmaceuticals in Kazakhstan increased by an estimated 4%. The U.S. market share was approximately 7% last year, valued at almost $95 million. Pharmaceutical imports in 2014 are expected to increase by about 4%, reaching an estimated $1.4 billion. Likewise, U.S. imports are predicted to increase slightly to an estimated $97 million, keeping U.S. market share roughly the same. Local production of pharmaceuticals in 2014 is expected to account for 30% of the total market.

Sub-Sector Best Prospects

The pharmaceutical market is divided almost equally into two major segments: State procurement and retail sales.

State Procurement

State procurement of pharmaceuticals is implemented through tenders announced by regional and city health departments. A State-financed program funds state procurement of oncology and diabetic medicines. The existing model of procurement is highly decentralized with about twenty distributers supplying hospitals with medicines. This has resulted in an increase of logistical expenses, interrupted supply, and unjustified prices for pharmaceuticals. In 2009, the Ministry of Health set up SK-Pharmatsiya LLP as a single distributor for supplying pharmaceuticals to State health institutions. The share of pharmaceuticals bought by the state through the single distributor system has increased and reached 80% by 2013. The remaining 20% of pharmaceuticals is directly purchased by hospitals and consists mainly of items less frequently used. In 2013 the single distributor bought pharmaceuticals in the amount of $420 million.

U.S. companies producing the following pharmaceutical products have strong prospects:

  • Vaccines and other immuno-biological medications for immuno-prophylaxis of population;
  • Anti-tuberculosis medications;
  • Anti-diabetic medications;
  • Oncology medications;
  • Antibacterial medications;
  • Medications and dialyzers, and medical supplies for patients with renal deficiency and patients operated on for kidney transplantation.

Generally, foreign suppliers participate in State-funded tenders through their local distributors.


Kazakhstan has one of the highest rates of drug consumption per capita among post-soviet countries. Despite government attempts to improve and increase local production of pharmaceuticals, Kazakhstan is still attractive for U.S. exporters as the production of highly efficient and innovative medicines is not considered a priority task in the state program. Severe diseases such as CVD, cancer, and diabetes still require imports of advanced pharmaceuticals.

Web Resources

For more information contact Commercial Specialist Nurlan Zhangarin.

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