How will sanctions against Russia affect Azerbaijani market of medicines?

Against the background of the tense situation in Ukraine, Russia has become the object of unprecedented sanctions from the West. Some Russian media outlets write that because of the sanctions, the country’s major pharmaceutical companies may be left without imported raw materials. Although there are no direct sanctions affecting this area, there have been some difficulties due to disruption of supply chains, as Europe has cut off the supply of necessary components, and shipments from India and China face great logistical problems. Russia has its own reserves, but in view of the current situation, it “will use its reserves to treat its people.”

How will sanctions against Russia affect the Azerbaijani market of medicines? Are price increases and drug shortages expected?

Economic expert Khalid Karimli told Report that the closure of Russian airspace to about 36 countries might lead to a serious increase in prices and a delay in the value chain of Russian medicines: “Pharmaceutical companies act together. For example, one of the components of one medicine is prepared in one country, and the rest - in others. In the process of transportation, difficulties arise due to changes in the route.”

He said that there will be serious problems with logistics and prices for medicines: “Pharmaceutical companies mainly enter into one-year contracts with their suppliers. Due to sanctions, medicines will become more expensive, in particular, due to restrictions on the export of pharmaceutical products by European countries to Russia.”

“Hostilities have been going on in Ukraine for two weeks now. The processes that have taken place have had a negative impact on the pharmaceutical sector and have created problems in the global pricing chain. The Ukrainian economy is in stagnation. Although Ukraine plays a role in the global pharmaceutical industry, it is not so big,” he said.

The expert suggests that Azerbaijan will have to look for alternative options for the supply of medicines. In other words, it probably will be necessary to buy from European countries the same drugs that were previously purchased from Russia. This will lead to an increase in the general price level.

“We will feel the rise in prices in a few months. It must be kept in mind that 4.3% of Azerbaijan’s imports are medicines and medical products, which is about $450 million,” he added.

In turn, medical expert Rasif Baghirov told Report that the share of drugs imported to Azerbaijan produced in Russia is no more than 10% of the total volume.

“The vast majority of doctors in Azerbaijan don’t trust Russian medicines, because their quality is much lower than that of European ones. Most of the medicines entering the Azerbaijani market are imported from Turkey and European countries, and a very small amount - from India and Latin America. Therefore, I believe that the sanctions imposed against Russia won’t have a negative impact on the Azerbaijani medicine market,” the expert said.