“Production of modern innovative drugs today is not only risky in terms of return on investment, but also costly in terms of its output on the market with accordance to all mandatory regulations and rules. Often, these expenses are too high for one company and we see a lot of merger and accession on the market,” said ARPM Director General, Victor Dmitriev at the congress “Rational pharmacotherapy” which took place in St. Petersburg.
The investment made in M&A deals of pharmaceutical and biotech companies reached $67 billion for 85 deals during the first half of 2016. The largest deal was the Purchase of Baxalta by Shire for $32 billion. This will result in expansion of companies in the new markets and addition of new medicines to their portfolios.
Mr. Dmitirev noted that the return on investments will allow companies to reinvest into the development of new medicines. He also spoke about other spendings that companies have when to promote their products. “The advertisement budget of Russian companies reached 75 billion rubles in the first 3 months of 2016. Payments to physicians also account for a significant portion of a budget. For example, GlaxoSmithKline (GSK) spent 619 million rubles for payments to MDs and scientists and Merck Sharp & Dohme (MSD) spent over 647 619 million rubles.
“Despite the public opinion which views pharmaceutical business as greedy companies that make mine off people’s bad health, the industry continues to invest in risky research. The Federal Antimonopoly Service has dispelled the myth that Russia has the most expensive medicines in the world. The Health Minister of Russia, Veronica Skvorcova acknowledged in budget savings due to the program of import substitution. A lot of work is performed to provide financial and physical accessibility to modern medicines in Russia. But we should be honest with people and explain that modern, high-tech medicines can not cost the same as the old ones. The sooner the drug insurance will be launched the sooner people will have an access to modern drugs,” said Mr. Dmitirev.
The success of allocation of production of innovative medicines was proven by the research of IMS Health. Out of the top-10 sales companies in Russia, Sanofi, Novartis, Teva, Takeda Abbott and Servier have allocated their production in Russia. Great results are shown by companies with 100% Russian capital. “Acelbia” by Biokad took the second place in sales in state purchases. Locally produced medicines more often win trades. For example, the victory of the F-Synthes in the auction for procurement of glatiramer acetate for the treatment of multiple sclerosis, and the victory of Biocad in the auction for the purchase of rituximab.
The issue of the rational use of funds in the current economic situation is extremely relevant.There is not going to be an increase in the budget for healthcare. The Minister of Health Veronika Skvortsova announced that the budget for 2017 will remain at the level of the current year, but in fact, taking into account the annual inflation and price increases it will be reduced by 20-25%. The successful implementation of the strategy of import substitution through the joint work of private companies and the state is, in fact, the key to public safety.