The FINANCIAL -- “Of course it is very difficult to change people’s perceptions on a large scale, but we have managed to make Georgian-quality medicines not only popular medically, but also throughout the whole of society,” Gocha Gogilashvili, General Director of PSP, told the FINANCIAL.
The FINANCIAL -- “Of course it is very difficult to change people’s perceptions on a large scale, but we have managed to make Georgian-quality medicines not only popular medically, but also throughout the whole of society,” Gocha Gogilashvili, General Director of PSP, told the FINANCIAL. “It would be desirable for a Good Manufacturing Practice (GMP) regulatory body to be established in the country, which would help local producers to expand their export markets and production as well.”
PSP has received a Golden Brand award for the ninth time in the category of Favourite Pharmaceutical Company. PSP has existed on the Georgian pharmaceutical market since 1995.
Q. How would you evaluate the year 2013 for PSP?
A. 2013 was a successful year for the company. Since the post-war crisis of 2008, 2013 was a year of growth for the pharmaceutical market, which also positively reflected on our company’s annual results.
Q. What is the market share of PSP?
A. With the data provided by the Ministry of Health, Labour and Social Affairs of Georgia, our company PSP has a market share of 20%. PSP has stably maintained this market share percentage over the years.
Q. How did the sales of the previous year compare to the first quarter of 2014?
A. As I mentioned, the country’s pharmaceutical market has increased, which has been reflected in our company’s sales as well. Also, there was an increase in the first quarter of 2014 compared with the same period of the previous year.
Q. In what way do you try to compete with other pharmaceutical companies?
A. Our company’s main priority from the beginning was and still is the extent and quality of our services, as well as the quality of the medication itself. Our company was the first in our field to develop service standards in its daily activities. This is proved by the distribution company PSP - Pharma, as well as the whole of the PSP - Pharmacy network, which is the holder of an international quality certificate, in addition to of course the production of GMP over the years. The company constantly ensures that the guaranteed quality of medicines across the land is available to the widest possible range of consumers all over the country, territorially as well as in terms of having accessible prices. The proof of the afore-mentioned statements is demonstrated by the regional centres and 178 pharmacies that can be found in every district and which constantly provide the lowest prices along with holding discount promotions of the top-selling medications.
Q. Which countries do you export your products to?
A. We export our products to Moldova, Ukraine, Azerbaijan, Armenia, Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and other countries. In total we export to 11 countries.
Q. What is the situation like in foreign countries in terms of sales?
A. Abroad, comparing the year 2013 to 2012 we had 25% growth. We also had 34% growth in the first quarter of 2014 compared to the same period of 2013.
Q. How do Georgian medicines compete with foreign ones?
A. Of course it is very difficult to change people’s perceptions on a large scale, but we have managed to ensure that Georgian-quality medicines are not only popular medically, but also throughout the whole of society. In the year 2013, compared to 2012 there was 22% growth. The results from the first quarter of 2014 are 7.5% higher than the results of the previous year.
Q. Which types of medicines do consumers generally prefer - foreign ones or Georgian?
A. Our pharmaceutical manufacturing is relatively new compared to that of other countries (Russia and Ukraine for example) where local production is up to 35-40%. Here, this share is only 15%. But the share is increasing statistically, which shows great change.
Q. According to the information you have available, which foreign companies are going to enter the Georgian market? And are there any companies which had planned to enter the market but have now postponed?
A. New companies are appearing on the market every year, and every year they appear in different quantities. According to our information, none of the companies have postponed entering the market. There is great interest from foreign companies in the Georgian market. This is because there are no barriers on entering the market and then developing here, according to the law. With the support of the Government it is very easy to enter the market and do business.
Q. When the Government is interested in introducing foreign companies, why is it not supporting local producers?
A. If you are referring to the local production of drugs not being a priority, this also occurs in a number of other countries (e.g. Ukraine). That is why it would be desirable to establish a GMP regulatory body in the country, which would help local producers to expand their export markets and production as well.
Q. What is the percentage of domestic production on the market?
A. Domestic production is 15% of the whole market.
Q. Which countries do you import medicines from?
A. We have contracts and we import only from the pharmaceutical factories which produce medicines according to the pharmaceutical industry’s international standards GMP. We import medicines from more than 100 pharmaceutical factories around the world.
Q. How is the quality controlled?
A. According to the international pharmaceutical GMP standard. Producing medicines means guaranteeing quality, as evidenced by a certificate of conformity of quality of each medication. There is a list of medicines which need to be analyzed and such analyses are carried out by government-accredited laboratories. In addition, the Ministry of Health, Labour and Social Affairs of Georgia conducts selective audits.
Q. What type of support are the local producers demanding?
A. The adoption of European pharmaceutical regulations for equal competition between local and imported medicines is a very important factor. This will balance the legislative environment, the principles of free market and open competition.
The pharmaceutical industry should meet the GMP requirements and Georgia needs to recognize the internationally accepted corresponding Production Practice standards.
The state checks the system’s compliance with internationally recognized standards. The state confirms the existence of quality assurance systems in companies, while the latter naturally leads to the protection of the market against low quality products.
Q. What is the reason for the decreasing prices of medicines? Should we expect current prices to decease further or start increasing instead?
A. The prices of medicines available on the market today have been reduced due to competition. The prices are at their minimum level nowadays. On top of that there are additional price decreases, and various offers being organized. The prices depend on the producers. There are inflationary processes occurring around the World, and producers also increase or decrease specific drug prices depending on different factors. It is for all those reasons that price changes occur here. This process is initiated and determined by the producer and may happen several times a year.
Q. What is the condition of the Georgian pharmaceutical market? What kind of improvements are needed?
A. Georgia needs to create a GMP-regulatory institution of international standards; this is very important for us. This will ensure that all the plants work according to these standards, as well as compliance with the essential requirements of this standard on all imported medicines.
Q. Does the insurance market of Georgia need to be developed?
A. The insurance market is growing. It has been less than two dozen years since the first insurance company was created. Everything began from zero, since then there has been huge growth which will increase still further in the future.
Q. What kind of developments should we be expecting this year?
A. Notable developments would include new pharmacies, including the opening of new types of Pharma markets. There will be an expansion in the range of drugs, including new drugs, due to world medicine innovations introducing completely new types of drugs. There will also be an increase in GMP export volume and types of production.
Q. What will the major challenge be for PSP in 2014?
A. PSP is a company which has been on the market for 20 years and has definitely become a guarantee of quality. The challenge is to maintain and strengthen customer satisfaction, also to increase export volume and foreign currency inflows in Georgia. To maintain the image of a leading company, we must strengthen and expand our operations successfully in the medical field.