Alexander Kuzin: You cannot always create everlasting greenhouse conditions for domestic companies

03 May 2018

GMP News

What is the way of development of the Russian pharma until 2030? What priorities in the development and challenges will be topical for the industry today and tomorrow? These are the questions which occupy minds of all key players of the market, experts and industry regulators. Sure thing! The stage where the Russian pharmaceutical industry is now, can definitely be called transitional – review of results of the state program Pharma-2020 and discussion of principals of the new state program Pharma 2030.

RBK, one of the major media holdings of the country, is keeping a close eye on the development of this story. Representatives of the state and business discussed results of Pharma-2020 and its further development during the conference set up by RBK this spring.  

Alexander Kuzin, General Director of the pharmaceutical company NovaMedica

What about the prices?

- Cutting of prices for drug products will take place not only due to the fact that the state is making attempts to regulate them, but also due to increase of competition in Russia. 

As you know, some companies in the USA are experiencing problems and they try to either raise prices for their products, or to sell out OTC departments. The reason for it is high competition. They have such a system of procurement and tenders which leads to price drop without the Federal Anti-Monopoly System (FAS). I think that in Russia prices are going to decrease as well and not only due to regulatory activities of the FAS, but also thanks to the competition. This is certain to happen. In this situation the right thing is to make the cake, i.e. the market, bigger. Is there any background for it? Today drug utilization in Russia is heavily held back by the low purchase power. So let prices be lower and consumption grow! Vladimir Putin, President of Russia, has recently said that 3.8% of the budget for health care can be turned to 5% meaning there are capacities for it. The most clear step, from my prospective, is introduction of the medicines reimbursement program.      

Regarding export

- On March, 7 we signed Special Investment Contract (SPIC) with the state to localize drug products from the portfolio of our partner – Pfizer. Our SPIC envisages an obligation to export not less than 20% of the manufactured biotech products.

Moreover, on a regular basis I meet with representatives of Big Pharma which take interest in contract manufacturing at the Russian capacities. We see the interest in placing such orders in Russia and this is not least because of the third-is-out rule. This is the way to increase export of the drug products manufactured in Russia as well.  

Regarding R&D

- We launched our own R&D Center in Moscow a year ago. Considering prospects of its effectiveness we follow the same logic: we shall not isolate ourselves in our world – Russia is only 1.7% of the world market. Developing new products one shall focus in the global market. Only this approach can return investments into R&D. In general I agree with the position of the Association of International Pharmaceuticals Manufacturers – you cannot always create everlasting greenhouse conditions for domestic companies – one day seedlings shall be put into the open ground and grow further. Of course, we can create special mild climate for the manufacturers in the 1.7% of the world market but then we shall not think about export – these manufacturers will not be competitive further on. This is why greenhouse conditions shall be created but only for a while.     

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