Top 5 Challenges and Practical Mitigation Approaches

The Azerbaijani pharmaceutical market is an emerging market characterized by a highly regulated pricing and regulatory environment, alongside growing opportunities for international manufacturers. Successful market entry requires not only regulatory compliance, but also a structured and integrated approach to pricing, market access, institutional engagement and compliance.

Below are the five key challenges multinational pharmaceutical companies typically face when entering the Azerbaijani market, along with practical strategies to mitigate these challenges, based on experience in regulated pharmaceutical environments.

1. Strict Price Regulation and Reference Pricing Exposure

Challenge
Azerbaijan operates a centralized and tightly regulated pricing system based on international reference pricing. Final medicine prices are approved by the Tariff Council and depend on the selected reference countries, pharmaceutical form and price corridor methodology.
For multinational manufacturers, this creates risks related to price erosion and potential downstream reference price implications in other markets.

How to Mitigate

• Develop a dedicated Azerbaijan-specific pricing strategy aligned with global pricing architecture

• Model multiple pricing scenarios prior to official submission

• Assess potential cross-country reference price impact in advance

• Engage local expertise early in interactions with pricing and regulatory authorities

Expert Perspective

One of the most effective ways to reduce pricing and regulatory risk is to conduct a pre-submission pricing and alignment assessment before official filings.
NEXA Pharm supports international manufacturers through pre-submission pricing and market access assessments, including reference price impact analysis, verification of alignment between regulatory and pricing strategies, and strategic recommendations prior to submission to regulatory and pricing authorities.
This approach significantly improves predictability and reduces the risk of delays, re-submissions or unintended price outcomes.

2. Complex and Non-Linear Market Entry Pathways

Challenge
Market entry in Azerbaijan is not a single, linear process. Registration, pricing, reimbursement and procurement are interconnected but administratively separate pathways. Misalignment between these processes often results in delays, additional cost and postponed commercialization.

How to Mitigate

• Develop a comprehensive market entry roadmap before initiating regulatory procedures

• Align regulatory and pricing timelines from the outset

• Clearly define the primary access channel: retail, hospital or public procurement

• Work with partners experienced in end-to-end coordination of market entry processes

3. Institutional Access and Public Procurement Barriers

Challenge
A significant share of pharmaceutical funding in Azerbaijan is driven by public sector mechanisms involving the State Agency of Mandatory Health Insurance (SAMHI), TABIB and public healthcare institutions.
For international manufacturers, procurement rules, tender logic and decision-making processes may appear opaque and difficult to predict.

How to Mitigate

• Gain early understanding of treatment prioritization within the mandatory health insurance system

• Develop an institutional access strategy in parallel with regulatory activities

• Prepare clinical and economic evidence aligned with national healthcare priorities

• Leverage partners with established interfaces across hospitals and procurement bodies

4. Limited Formal Reimbursement Pathways for Innovative and Orphan Medicines

Challenge
Unlike more mature markets, Azerbaijan does not yet offer fully standardized and predictable reimbursement pathways for innovative, specialty or orphan medicines. This creates uncertainty around patient access and often requires product-specific solutions.

How to Mitigate

• Define realistic early access scenarios (special programs, public procurement, individual use)

• Engage key opinion leaders to demonstrate unmet medical need

• Adapt clinical and pharmacoeconomic narratives to the local healthcare context

• Apply a phased market entry approach rather than a full-scale commercial launch

5. Elevated Compliance and Governance Expectations

Challenge
Despite being an emerging market, Azerbaijan applies high levels of regulatory oversight related to pharmaceutical promotion, interactions with healthcare professionals and pricing behavior. Non-compliance may lead to regulatory, reputational and operational risks for multinational companies.

How to Mitigate

• Apply multinational-level compliance and governance standards locally

• Work exclusively with transparent and ethically aligned partners

• Provide regular training aligned with both local legislation and global company codes

• Treat compliance as a strategic enabler of sustainable operations

Integrated Market Entry Support: From Strategy to Execution

Effective entry into the Azerbaijani pharmaceutical market requires coordination across multiple stakeholders and processes. NEXA Pharm provides aligned support across all stages of market entry, acting as a strategic and operational coordinator.

In collaboration with international and local partners, NEXA Pharm can support:

• recommendations on optimal local distributors, logistics providers and specialized partners based on the selected market model

• coordination between manufacturers, distributors and institutional stakeholders

• financial and commercial modelling, including sales potential, profitability and investment requirements

• development of detailed sales forecasts and growth scenarios

• preparation of a structured business plan reflecting regulatory, pricing and market constraints

• design of a comprehensive medico-marketing plan, including positioning, therapy area prioritization, KOL engagement and phased commercial activities

Conclusion

Successful entry into the Azerbaijani pharmaceutical market requires more than regulatory approval alone. It demands a coordinated, evidence-driven and strategic approach across pricing, market access, institutional engagement and compliance.

For multinational pharmaceutical companies, partnering with an experienced local organization can substantially reduce uncertainty, shorten timelines and support sustainable long-term market presence.

Request a Consultation

Entering the Azerbaijani pharmaceutical market involves critical strategic and operational decisions that are most effective when evaluated before formal submissions and process initiation.

The NEXA Pharm team is available to provide an initial expert consultation for international pharmaceutical and biotechnology companies, including:

• preliminary assessment of market entry feasibility and potential access scenarios

• early pricing evaluation and identification of key regulatory risks

• guidance on optimal market presence and partnership models

• discussion of strategic steps for registration, market access and commercialization

This consultation supports the development of a realistic, risk-aware market entry strategy and a structured roadmap for execution.

👉 Contact us to discuss collaboration opportunities and receive expert support at an early decision-making stage.