The fine chemical industry has been a prominent part of the Armenian economy for many years. A new wave of extended pharmaceutical industry development commenced with the country's upturn in the mid-1990s when Armenia succeeded in gaining macroeconomic stability and sustained economic growth.
Armenia's pharmaceutical industry has registered a constant growth over the past decade into one of the country's most dynamic sectors of the economy. In 2019, the manufacturing of pharmaceutical products in Armenia rose by 4.1% vs 2018 to USD 20.1 mln and made about 0.5% of the whole Armenian industry. Currently, there are 24 pharmaceutical companies with licenses to produce medicine in Armenia. Product quality is a high priority among Armenian manufacturers. Most raw materials and chemical compounds used in production are therefore bought from EU and US suppliers. More than 360 registered medicine are manufactured in Armenia.
The pharmaceutical industry is one of the export-oriented industries in Armenia. Approximately 50% of locally produced medicines are exported. The key foreign markets for Armenian companies comprise the CIS, with a predominance of Central Asian countries (Uzbekistan, Kazakhstan, Turkmenistan, and Tajikistan). Armenian companies also compete successfully in the Georgian, Belarusian, Russian and Ukrainian markets. Another decisive competitive advantage is the membership to EAEU. A common pharmaceutical market with EAEU countries with 0% customs duties means registered pharmaceutical products can freely circulate in EAEU countries without any additional procedures. The GMP standard is being implemented among the member countries alongside mutual recognition or common regulation of medicine approvals and tender for public procurement of medicines. Armenia exported about $21.3 million worth of pharmaceutical products in 2018. The EAEU market provides access to 183,000,000 consumers. Russia alone imports about $20 billion of medicines a year.
Armenia also has strong human capital in Biochemistry, Molecular Genetics and Microbiology supported by prominent academic and research institutions. Manufacturing of generics, APIs, vaccines, and, with 2500 medicinal herbs growing in Armenia, herbal medicine has a huge potential to be used. The average hourly compensation in Armenia's pharmaceutical industry is USD 2.6/hour, 20.4 times lower than $52.2/hour, the average cost among the world's top 10 pharmaceutical exporters. Armenia suggests the utmost at a lower cost.