GlaxoSmithKline and Abbott to start production in Ukraine

28 March 2013

The Pharma Letter

UK pharma giant GlaxoSmithKline (LSE: GSK) and the USA’s Abbott (NYSE: ABT) are considering launching production of their drugs in Ukraine at the facilities of Indar, one of Ukraine’s largest pharmaceutical producers, owned by the state.

According to Lyobov Vishnevskaya, head of Indar, the company will start cooperation with GSK and Abbott this year. There is a possibility that at the initial stage the Ukrainian company will specialize in packing of drugs, among which will be multiple vaccines, as well as drugs against tuberculosis and HIV, while later it may launch their full cycle of production.

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Ukrainian media reports suggest that, in addition to GSK and Abbott, Indar plans to launch production of drugs for another global major, the name of which has not yet been disclosed.

There is a possibility that some of the future production of the Western companies in Ukraine may participate in state tender purchase of drugs, as Indar has already filled a petition to the Ukrainian Ministry of Health for the supply of Abbott’s anti-HIV Aluvia/Kaletra (lopinavir/ritonavir) for the state’s needs.

Foreign drugmakers being pushed into local manufacturing

Ukrainian analysts say that the current policy of substitution of pharmaceutical imports, which is currently implemented by the local government is forcing global pharmaceutical producers to establish cooperation with local producers.

According to Elena Beh, the regional representative of Sanofi Pasteur Ukraine, such cooperation could be beneficial for Western companies, as local producers are responsible for all the risks, associated with doing of business in Ukraine.

Analysts also add that all the above-mentioned companies may gain significant benefits from their Ukrainian expansion, taking into account that at present up to 100% of vaccines, anti-HIV and anti-tuberculous drugs are purchased for state needs, so will not be associated with any problems with demand.

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