Allocation of pharmaceutical production in Russia has its issues

The overall level of allocation of foreign pharmaceutical production in Russia is very successful. This evaluation was given at the meeting that took place among experts of the CCI. According to the CCI Vice-president, Dmitry Kurochkin, the Russian pharmaceutical industry has had investments in the past 2-3 years. Thus 19 new production facilities have been opened in Russia, with 6 of them open in 2015. The leading companies to allocation their production are AstraZeneca, Takeda, Krka, Novo Nordisk, Gedeon Richter, Stada, and Sanofi.

    ARPM Director General, Mr. Dmitirev spoke on the issues that are related to the allocation of production. According to him, there is a number or regulatory issues that make the industry less attractive for investments. The industry is in need of improvement of regulatory basis and its implementation. There is also incoherence between different departments that are responsible for the industry control, and there is no single regulation authority. “The Roszdravnadzor has joined the International coalition of drug regulators. A lot of countries have only one agency that controls medicines. Russia would benefit from the same approach,” said Mr. Dmitirev.

    Mr. Dmitriev also spoke about the companies that have passed the stage of allocation of their production in Russia. He drew attention to the fact that there is a difference between how investors are supported on regional and federal levels. According to Mr. Dmitriev, an investor is always supported by regional authorities through the creation of infrastructure and favorable conditions during construction stages. However, after the start of production, the structure of regional public procurement works unfavorably to the producer. In particular, the region will purchase less of the company’s products after it allocated its production in that region than before. We had this experience in the Kaluga region. “We would like for the regional authorities paid more attention to producers after they launched a full production capacity. The region has to primarily purchase products that are produced within its territory.” He also spoke about the socio-professional aspect of the business. “In Yaroslavl were faced with a challenge that many job candidates did not want to move for a job and better salary.”

    The issue of stimulation of production of pharma substances in Russia was also discussed at the meeting. This topic was raised by the newly local companies after the Ministry of Industry and Trade announced their three-step preference project at state procurement. The number of preferences is determined by the level of production of medicines. Mr. Dmitriev reminded that it is important to keep in mind the economic feasibility of production of pharmaceutical substances in Russia. “It is important to understand that developing substance production in Russia could not only by challenging technologically, but also inefficient economically. The industry’s demand has to be considered as well as export potential. There are substances for which the global demand amounts to 1.5-2 kg. annually. There will be no economic reasoning for establishing a production that would fulfill 150g of that substance for the Russian demand. We need to acknowledge that for some substances it is cheaper to purchase overseas. Therefore, the proposals of the Ministry of Industry and Trade should be carefully evaluated and discussed with producers and only then admitted for practice,” said Mr. Dmitriev. 

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