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The Russian pharmaceutical manufacturers have all competences to provide the country with high-quality drug products

11 February 2016

Following the Order of the President dated February 7, the representatives of the authorities, business class and public organizations were gathered for the emergency meeting in order to discuss the steps which have to be urgently taken for the development of full cycle productions in Russia

On February 10, the Russian Union of Industrialists and Entrepreneurs together with the Chamber of Commerce and Industry arranged a round table discussion on the development of vaccines, blood products, insulin and drugs for HIV diagnosis and treatment productions based on the principle of full cycle. The representatives of the Ministry of Industry and Trade, the Ministry of Health and the pharmaceutical industry and public organizations also participated in the meeting.

Speaking generally about the current situation in the pharmaceutical industry, the Deputy Minister of the Industry and Trade Sergey Tsyb noted that over the last few years more than 10 drug manufacturing plants were opened. According to the Ministry of Industry and Trade, in 2011 the share of the drugs produced in Russia made about 22% of the government procurement market, in 2015 this figure has increased up to 28%. In particular, the Russian manufactures has managed to ensure insulin safety in the country. This was announced by the President of the Russian Union of Industrialists and Entrepreneurs Alexander Shokhin.

As the part of the Order of the President dated October 13, 2015, the outcome of the local insulin manufacturing plants revision on the production capacities, compliance with the terms of production and quality of manufactured products showed that all companies, operating in the country, have these competences. According to IMS Health analytical agency,in the first half of 2015, the market share of the locally produced insulins was more than 33%. In particular, GEROPHARM Group’s production capacities are enough today to cover 30% of insulin demand in Russia. Taking into account the investment project, aimed to create a new production platform, which is expected to be completed this year in St. Petersburg, the production volumes of the substance will be enough to cover the country's demand for the drug. The Ural plant Medsintez is also planning to launch its own substance production in the near future. So, in the short term, the capacities of local pharmaceutical manufacturers will be enough not only to provide the local market with insulin substances and but also to develop export.

This is one of the most important issues in the sphere of drug supply due to the segment’s high social sensitivity – good-quality, effective and safe drugs must be available for all people with diabetes on a daily basis and in any required quantity. The production technology of insulin is highly important for the country’s national security and social stability. Realizing that the vulnerability in this sphere can cause huge social risks, the President and the Government of the Russian Federation are gradually taking steps for the development of full cycle productions in the country, including the process of substance biosynthesis.

In the Order of the Russian President dated February 7, 2016 there is a task to define the range of drugs whose production should be based on the full technological cycle principle on the territory of the Russian Federation. According to the common opinion of all the participants of the round table, all discussed drugs undoubtedly fall into this category. That was the reason, why so much attention was paid to the discussion of measures, which can stimulate the development of substance production.

The experts made a number of proposals that were recorded in the resolution of the Russian Union of Industrialists and Entrepreneurs:

  • The introduction of differentiated preferences for drug manufacturers depending on the depth of localization
  • The adoption of a "sole supplier" mechanism whose status and rights along with the mechanism of special investment contracts should serve as a set of opportunities for carrying out the tasks set by the government. This measure should be implemented on the principle of "preferences in exchange for the completed tasks, but not for the future achievements". That will guarantee that investor’s obligations to create a full cycle production and provide a stable supply of the required drugs will be fulfilled. Commenting on the issue, Alexander Shokhin noted that the corporation Rostec withdrew its proposal to be the sole supplier of insulin. However, for the rest of the discussed drug categories the question remains open.

Making a report on the priorities in the sphere of development of insulin production in Russia, the head GEROPHARM Group Petr Rodionov emphasized that such mechanism as a sole supplier should not deprive the market of the competitive environment. In order to achieve this, the concept should allow the region to buy from a supplier no more than 30% from the total annual demand for a certain drug.

Criteria for giving the status of a sole supplier on the grounds of "requirements to a product" and "requirements to a manufacturer" in respect of the pharmaceutical industry:

1. Requirements to a product (drug product):

- the absence of drug can cause a significant increase in the lethality and mortality rates or

- a considerable budget share is necessary for drug procurement

2. Requirements to a manufacturer:

- to carry out a full cycle drug, including substance, production on the territory of the Russian Federation. In order to consider the Russian Federation as the place of substance production, on its territory must be implemented:

for chemical substances – chemical modification of the molecule

for biotechnological substances – biosynthesis

- the certificate of drug / product registration

- independence from a foreign investor

  • The rejection of other amendments to the Federal Law №44 aimed to determine the procurement procedure for the participants of the special investment contracts, in particular of the criterion "a product that has no analogues produced in the Russian Federation", as this criterion is not sufficiently selective and in the pharmaceutical industry, for example, it does consider the processing depth, and therefore, it will not stimulate the real import substitution.
  • The necessity to make some amendments to the tax legislation, so that the profit tax rate, enlisted in the budget of a constituent entity of the Russian Federation, may be reduced by 0% for the participants of the special investment contracts by the law of a constituent member of the Russian Federation.

A separate issue, which attracted the attention of the experts, was connected with the country's demand for HIV diagnosis and treatment drug products. The President of Pharmasyntez Vikram Singh Punia declared that the current demand can be coveredwithin the next few years with the help of the existing mechanism of compulsory licensing, which is also reflected in the resolution.

Summarizing the results of the discussion, the representative of the All-Russia People's Front Dmitry Chagin pointed out that in order to assess the impact of the decisions taken by the government and present the true picture of the current situation in the industry to the President, it is necessary to take into consideration the common position of a number of public organizations, such as the All-Russia People's Front, Business Russia, the Russian Union of Industrialists and Entrepreneurs and Leaders Club. The fact that the discussion of the additional measures for the industry development was held in the place, where the Russian Union of Industrialists and Entrepreneurs is located, demonstrates the coordinated work of the organizations and the importance of the decisions taken now.

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