The development of local and contract production is a modern reality

Representatives of pharma at the Adam Smith Conference have exchanged opinions on the development of local and contract productions. It was discussed at the session dedicated to the Russian pharmaceutical business, moderated by the General Director of the Association of the Russian Pharmaceutical Manufacturers Viktor Dmitriev.


The 24th annual Russian Pharmaceutical Forum of the Adam Smith Institute was held from May 15th to May 16th in Staint-Petersburg. Traditionally, the leading players of the pharmaceutical industry have gathered to discuss the current issues of the industry with the regulators and leaders and to obtain the necessary information to develop a competitive market strategy.


Before the guests’ speeches, Viktor Dmitriev had noted that quality of products remains the main objective for Russian pharmaceutical manufacturers. «This is the category that has no boundaries. The issue of interaction between business and the state is very important. In this case, the state acts both a regulator and one of the players. A huge volume of purchases is carried out by the government. It is important to find a balance. This aspect also affects the localization of processes and the inflow of investment in our country».


Answering the question about the essence of the processes in pharma Irina Bernshtein, a Business Development Director in Russia, Kazakhstan, Belarus, Armenia and neighboring countries, Condair has advised the players not to cut down expenses on details: «The government is aimed to create a strong and competitive industry capable to produce pharmaceutical products for consumers. Faced with the difficulties, the way out can be unordinary solutions and in Russia they are able to be found. The unique opportunities for implementation have been created in Russia and  this is a reason why many specialists who left the country in the 90s, return and successfully introduce modern international trends into Russian pharmaceutical manufacturing».


Mrs. Bernshtein has noted now the market gives good opportunities for compiling a foreign experience and original ideas. In turn, speaking about the specialists who have come back to Russia, Viktor Dmitriev gave an example of the successful experience of the Russian company, which managed to return 54 specialists, most of them preferred to stay in their motherland.


Speaking about local manufacturing, Andrey Odabashyan, a Head of the legal services group to pharmaceutical companies, PwC, has noted that the number of foreign companies localizing manufacturing in Russia is increasing every year. «This is primarily due to the support of Russian producers. The most popular way of localization is the implementation of contract production at Russian plants, as this requires less time and investments, which in turn positively affects the increase in the number of workplaces, the development of production and the investment potential of the industry», — Andrey Odabashyan said.


According to Mikhail Nekrasov, a CEO of «Nanolek», in contract production it is important to choose reliable partners. «We presented our strategy in taking the strongest players at the pharmaceutical market as partners. Our strategy has paid off. Today we are working three shifts. We have fully loaded our manufacturing. In our case, the financial flow from a major partner helps us today feel confident in the future. In addition, a contract manufacturing allows us to obtain a unique experience of foreign business partners».


On behalf of the major partner Guillaume Oshalter, a General Manager of Sanofi Pasteur Russia and Belarus, spoke about the experience at the Russian market: «Sanofi has been supplying vaccines to Russia for 40 years and is striving to ensure a sustainable supply of Russian healthcare. It is necessary to be aware of the fact that this is a complex multi-step process, which on average lasts from 24 to 32 months. At the same time, up to 70 percent of this time a quality control takes, which includes several hundred different tests. Therefore, in general, the costs of production and release of vaccine into the market is much higher compare with the solid dosage form. We continue the joint project with the «Nanolek» company. Since 2016, our combined vaccine produced in Kirov region is available to the Russian consumers».


However, investors have fears, which Anton Katlinsky was shared by with the audience, a President of «Fort» company. «It is important for us to assess the risks. Of course, it is important to have guarantees. So far this issue is not adjusted. Today it is a high-cost business and we are extremely interested with the well-established process of implementation».


The question of personnel in the pharmaceutical and medical industries has been discussed. «In February of this year, along with Belgorod University, we launched a joint international program: «Topical issues of industrial production of medicines». It is intended for university students and allows to get the latest information about the production of medicines» — Elena Bushberg said, a CEO of «Veropharm».


Viktor Dmitriev, in his turn, has noted that students from Belgorod always show good results at the Pharmaceutical Academic Olympics organized by the ARPM. It is already planned in January 2019 in Nizhny Novgorod. At the end of the Conference, all participants expressed their hope for further successful development of the industry in the conditions of interaction of all structures and author

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