Kazakhstan’s pharmaceutical industry is showing steady growth securing a significant position in the country’s macroeconomic structure and emerging onto the international stage.
According to IQVIA data for 2023, Kazakhstan ranked third among CIS countries in terms of pharmaceutical product sales, trailing only Russia (25.2 million USD) and surpassing Uzbekistan (1.6 million USD). What is particularly noteworthy is Kazakhstan’s compounded annual growth rate (CAGR) of 14% over the period from 2020 to 2023, significantly outpacing countries like Russia (10%) and Armenia and Kyrgyzstan (both at 12%).
Production Dynamics: Confident Growth Amid Rising Demand
According to the Bureau of National Statistics of the Republic of Kazakhstan, the volume of pharmaceutical production reached 95.028 billion tenge (211.6 million USD) in the first half of 2024 which is 14.8% more compared to the same period in 2023. Leading this growth was a 20.4% increase in the production of medicines, while the production of other pharmaceutical products grew by 13%. In physical terms the volume of medicine production increased by 10.5%, rising from 17.9 tons to 19.8 tons in the first half of the year.
This sustained increase in production capacity reflects both rising domestic demand for pharmaceutical products and the expansion of export potential, which contributes to Kazakhstan’s strategic positioning in the global pharmaceutical market.
Export Potential: Market Diversification and New Horizons
One of the most significant aspects of Kazakhstan’s pharmaceutical sector development is the exponential growth in export deliveries. In the first half of 2024 Kazakhstan exported 5.1 thousand tons of pharmaceutical products worth 32.6 million USD, which accounts for 15.4% of total production. Notably, the monetary volume of exports grew by 56.1%, while the physical volume increased by only 6.6%. This imbalance indicates a shift in the structure of exported products, with an increasing share of higher-value items such as vaccines and blood products.
Main Importers of Pharmaceutical Products:
Russia
- Export volume: 2,993 tons (58.8% of total exports)
- Export value: 14.7 million USD (45.1%)
- The monetary export grew by 68.7%, while physical volumes decreased by 7.2%.
Kyrgyzstan
- Export volume: 1,037 tons (25.7%)
- Export value: 5.6 million USD (17.0%).
Uzbekistan
- Export volume: 658 tons (12.9%)
- Export value: 4.997 thousand USD (15.3%)
- Dynamics: a decrease in monetary exports by 28.5%, but a significant increase in physical volumes by 296.2%.
Belarus
- Export volume: 16 tons (0.3%)
- Export value: 3.336 thousand USD (10.2%).
Expanding Export Geography: Opportunities and Challenges
Kazakh pharmaceutical products are steadily penetrating new markets beyond traditional export destinations in the CIS. Lithuania, Germany, and Turkey have emerged as some of the most promising markets, signaling a significant expansion of export geography, which opens new opportunities for Kazakhstan on the global stage.
- Lithuania: In the first half of 2024, Kazakhstan exported 3 tons of pharmaceutical products to Lithuania worth 434 thousand USD, representing a 794.1% increase in physical volumes and a 1,208.5% increase in monetary terms.
- Germany: Export volume totaled 0.08 tons, with a value of 28 thousand USD, reflecting a 6,586.9% increase in physical deliveries and a 2,402.4% increase in value compared to the same period in 2023. As one of the largest pharmaceutical markets in Europe, Germany opens up vast opportunities for future cooperation with Kazakhstan.
- Turkey: Despite a 97.9% decrease in physical volumes, monetary exports grew by 1,309.3%, reaching 1 thousand USD for 0.004 tons of products. This suggests the export of more expensive and specialized products with high added value.
Niche Product Categories: Strengthening Positions in High-Value Segments
A significant increase in the export of vaccines, serums, and blood products deserves special attention. In the first half of 2024 Kazakhstan exported 44 tons of these products, up 100.4% from the same period in 2023. The export value reached 11.7 million USD, an increase of 256%. Particularly notable was the rise in the export of “human and animal blood for therapeutic purposes,” which saw a 282.8% increase in value, demonstrating Kazakhstan’s potential in niche pharmaceutical segments.
Strategic Prospects and Risks
Despite impressive successes, Kazakhstan’s pharmaceutical sector faces several challenges. The 7.2% decline in physical export volumes to Russia may indicate increasing competition in this strategic market or logistical difficulties that need to be addressed to maintain its position. At the same time, the growth in monetary exports suggests a shift in the structure of supplies, creating long-term opportunities for growth in high-margin segments such as biopharmaceuticals and vaccines.
The expansion of export deliveries to Europe and the Middle East opens new horizons for Kazakhstan. However, success in these markets will depend on the country’s ability to adapt to stringent quality requirements and regulatory standards.
Conclusion
Kazakhstan’s pharmaceutical sector is on the verge of significant transformation. The successful increase in production and export volumes signals positive structural changes, but sustainable growth will require further development of export channels, improving logistics efficiency, and adapting to international standards. Only by doing so can Kazakhstan strengthen its position in the global pharmaceutical market and realize its potential in this highly competitive industry.
Author: Ruslan Sultanov
Economist
