Drug sales in Russia generate $21bn (€16bn) a year, making the market is the sixth largest in the world, Vasily Ignatiev, CEO of local drugmaker R-Pharm, told delegates at the 8th Global Pharmaceutical Contract Manufacturing (GPCM) summit in London yesterday.
Growth is being driven by Russia’s Pharma2020 policy – introduced by Vladimir Putin in 2010 - which aims to have 50% of the country’s medicines made locally by the end of the decade with benefits for homegrown drugmakers and barriers to entry for imported products.
However, while the overall aim is clear, complying with Pharma2020 is proving to be “mission impossible” for many Russian and Western companies that are failing to fully understand the rules imposed according to Ignatiev.
He explained that, officially, 26% of drugs are produced locally, but this is an unreliable measure because there is a “lack of clear definitions of what exactly is a local product,” and the Government itself still trying to explain the concept.
At present, packaging a drug in Russia is enough to get is classed as ‘locally made’ under Pharma2020 according to Ignatiev, who said that while this loophole will soon close, after 2016 the definition can still be applied to medicines that are only filled/finished in the country.
Improving the quality of medicines made in Russia was also an aim of Pharma2020, but efforts in this regard are also falling short according to Ignatiev.
Under Pharma2020 all drug facilities in Russia should have been assessed for GMP compliance by January this year. However, Ignatiev said, delays to the publication of regulations coupled with a lack of qualified assessors meant this target was missed.
As a result many state-owned plants are likely to remain operational despite not meeting GMP standards for the next few years according to Ignatiev, who suggested it would be “very unlikely” for the Government to close down any of its own sites ahead of the Pharma2020-imposed deadline.
As yet the unclear regulations may not have discouraged multinationals from targeting Russia - only one local firm features in the country’s top ten – but “everyone is concerned [about the policy] and in different stages” of entering the market, Ignatiev said.
Some Big Pharma - such as Novartis, Teva , Takeda , AstraZeneca and Novo Nordisk - have built their own sites in light of Pharma2020, whilst others including Pfizer, GSK and Roche have chosen to form joint ventures with local firms.
However, both building a plant and partnering a local firm is problematic, Ignatiev continued, due to bureaucracy, extra CAPEX requirements, utility issues, a lack of educated personnel and cultural conflicts.
Foreign owned plants number 11 and facilities that work with multinationals number 15, compared to approximately 350 ex-Soviet facilities, created originally to make low cost products, he said, and thus turning the industry around is still somewhat of an uphill struggle.