Russia's Ministry of Industry and Trade (Minpromtorg) has published a report reviewing pharmaceutical industry developments in 2015 and plans for 2016, highlighting the Russian pharma market's growth of 10.34% year on year (y/y) to RUB1.12 trillion (USD16.8 billion) in 2015 and a 26.3% y/y increase in the volume of domestic drug production.
Implications | The Minpromtorg estimates the Russian pharma market as totalling RUB1.12 trillion (USD16.8 billion) in 2015, a year-on-year (y/y) increase of 10.34%, with domestic drug production up 26.3% y/y to RUB231.0 billion. |
Outlook | The main focus for the ministry will be to continue attempts to boost import substitution. In 2015, work was already under way with regions to implement an import substitution policy, with 20 synchronised sectoral plans in place for producing import-substituting products. |
Russia's Ministry of Industry and Trade (Minpromtorg) has published a report giving its goals and objectives for the pharma industry in 2016 and summarising results from 2015, as reported in Russian news source GMP News. A major theme of the report was the government's ongoing programme to substitute imported drugs with locally produced equivalents, with 20 synchronised regional plans in operation. Four new programmes and increased funding have been approved to support the domestic industry in 2016.
With government support, 29 new drugs and 17 medical products were produced in 2015. The following key findings were reported for the Russian pharmaceutical industry in 2015:
• The final volume of the Russian pharmaceutical market was RUB1.12 trillion (USD16.8 billion), a year-on-year (y/y) increase of 10.34% from 2014.
• The volume of Russian drug production in 2015 totalled RUB231.0 billion, up 26.3% from 2014, and more than double the figure in 2009 (RUB96 billion).
• The share of domestic drugs purchased via the Seven Nosologies list from 2011 increased from 4.5% to 35.4% in monetary terms.
• The share of domestic drugs on the List of Vital and Essential Drugs (ZHNVLP) was 72.4% (in finished dosage form), exceeding the governmental target of 69%.
• The share of Russian production in the total market in terms of final prices was 27.2% (y/y change of -24% from 2014).
• The share of domestic drugs in the total market volume (5.5 billion packs) was 58% in real terms and their share in total public procurement was 25% in value terms and 69% in real terms.
• Over the past five years, private investment in the pharma industry amounted to RUB120 billion, with federal budget investment of RUB35 billion.
• Six pharmaceutical factories were opened in 2015, from a total of 19 opened since 2013, including seven with foreign capital input.
• Costs during the implementation of medical industry programmes were RUB29.6 billion (including RUB14.4 billion equity).
• The value of pharmaceutical imports in 2015 was USD8.8 billion, with an export figure of USD0.53 billion.
The report notes that the government's Industrial Development Fund approved five pharmaceutical projects from Russian companies for funding in 2015, with a total loan of RUB2.1 billion:
• Generium's production of a rheumatoid arthritis drug;
• Geropharm's production of compounds for the release of peptide and protein drugs;
• Two R-Pharm projects, for production of multiple sclerosis drugs in syringes and for production of cancer drugs; and
• Pharmasyntez's production of tuberculosis and cancer drugs.
The government also budgeted funds of RUB199.8 million for the manufacture of drugs for cancer and autoimmune disease over 2015–17.
Drugs newly marketed domestically under the state programme in 2015 included the antifungal natamycin, the antiviral valganciclovir, the diuretic acetazolamide, the anti-inflammatory methylprednisolone atseponat, norepinephrine for shock, salmeterol + fluticasone for asthma and chronic obstructive pulmonary disease (COPD), and biosimilars of trastuzumab and bevacizumab for cancer. The report highlighted that Russian companies are specialising in the domestic production of monoclonal antibodies, insulins and analogues, cytokines and growth factors, recombinant clotting factors, recombinant enzymes, recombinant vaccines, and cellular therapies.
The ministry's objectives for the pharmaceutical industry in 2016 include:
• Creating import-substituting industries via the Industrial Development Fund;
• Allocating budgets to the creation of innovative medicines;
• Establishing additional support measures for domestic pharmaceutical manufacturers; and
• Improving the regulatory framework of state regulation of prices for medicines from the ZHNVLP list.
Outlook and implications
Increasing domestic pharmaceutical production and its market share is the principal aim of the state programme Pharma 2020, initiated in 2009. A government update for 2014 was reported in June 2015 (see Russia: 23 June 2015: Russia's Ministry of Industry and Trade reports on pharmaceutical market statistics for 2014). While the share of domestic drugs on the ZHNVLP list is now 72.4% (a strong focus of the programme), it is noteworthy that the share of Russian production in the overall market was still only 27% in 2015. In addition, the value of imports still greatly exceeded that of exports.
The allocation of funds towards manufacturing companies and particularly the production of biosimilars (evident from the recent approvals of trastuzumab and bevacizumab biosimilars in Russia) is a key part of the import substitution plan. In addition, the ministry is seeking to implement price preferences for drugs manufactured in Russia, whether by domestic firms or by foreign companies with Russian facilities (see Russia: 29 Oct 2015: Russian Ministry of Industry and Trade looking to increase support for domestic manufacturers).
A separate analysis by the market analysis organisation DSM Group reported an 8% y/y increase in the Russian market to RUB1.25 trillion, with a 4% y/y decline in volume (see Russia: 11 February 2016: Russia's pharmaceutical market grows 8% in value terms in 2015).