Medicines under contract

Health of local bottling

Galina Kostina, "Expert" No. 15-2014

My relative, who takes heart medications every day, after hearing about possible sanctions from Western countries, went online to find out if analogues are produced in Russia. Just in case. And he breathed a sigh of relief. For a long time we were treated mainly with foreign medicines, and this dependence persists today. However, a few years ago, the government, within the framework of the Pharma 2020 program, formulated a task to increase the volume of drugs of domestic production in value terms from 20 to 50%. When the draft program was discussed, there were many doubters. In 2010, the program was adopted, and the results appeared quite quickly. A number of foreign companies invested in the construction of their own factories in Russia, others began to look for local partners for production, and others – to conclude licensing agreements for the joint delivery of products to the market. According to experts, we will master half of the market ahead of the target date – 2020. A more difficult task is to saturate the market with its own innovative means.

Build a factory in RussiaNow almost all foreign companies say that localization is important for those who want to come to Russia seriously and for a long time.

And when Pharma 2020 was just a project, it wasn't obvious at all. In 2007, when the project was being developed, the share of Russian medicines on the market was approximately 17%. At that time, the financial crisis had not yet broken out, forcing developed countries to squeeze health budgets, after which the pharmaceutical markets began to shrink. At that time, the vector of faster growth of emerging markets, including our country, had not yet been set. At that time, Russia, with its market of about $ 10 billion, not the richest population and the state's sluggish concern for the health of citizens, was not the most attractive country for the global pharmaceutical industry. And the measures planned by the Ministry of Industry and Trade, the main initiator of Pharma 2020, seemed to foreigners to be twisting their hands. As a representative of one of the major Western companies said at the time, there is absolutely no need for us to build another production for such a small market, there is enough available capacity.

However, foreign pharmaceutical companies, according to Nikolai Demidov, head of the analytical company IMS Health Russia and the CIS, began to come to Russia in the 1990s. But then these were isolated and rather image projects. The Hungarian company Gedeon Richter was one of the first to build its own plant in Russia. In the early 2000s, invest in local steel production and other companies. For example, in 2003, Krka started building a plant in the Istra district of the Moscow region, investing 40 million euros in it.

Foreign companies received a new impetus in 2005 with the introduction of the Supplementary Drug Provision Program (DLP), when the state allocated an additional 50 billion rubles for the free provision of medicines to beneficiaries. "It became clear that Russia is ready to buy more expensive medicines," says Nikolai Demidov. "Around the same time, the Pharma 2020 program began to be discussed, and foreign companies were already seriously thinking about localization." In general, Pharma 2020 set two goals: to increase the share of domestic medicines and to create its own innovative products. It was assumed that the first task could be solved with the help of localization of foreign production, the second – at the first stages with the help of technology transfer.

There were two main directions of localization: the construction of its own factory (or the purchase of local players) or contract production at the factories of local companies. The factories were built primarily by companies producing generics, but there were exceptions. One of the first, in 2005, the German STADA began to acquire Russian enterprises – first Nizhpharm, then Makiz-Pharma and Skopinfarm, then Chemopharm. Sanofi has become the first international company among the top five global leaders to launch the production of high-tech biologics of the latest generation in Russia. In 2010, she bought the plant, which entered a full production cycle in the summer of 2013. "The production of insulin analogues is a very complex production process, significantly different from the production of other drugs and accompanied by multi–stage quality control," says Vice President, head of the Eurasian direction of Sanofi and CEO of Sanofi Russia Patrick Aganian. – Of course, thanks to the launch of local production, the company has gained an obvious advantage – the status of a Russian manufacturer, which gives certain preferences in the purchase of insulin at the expense of the budget." The Sanofi-Aventis Vostok plant, in addition to the production of insulins, carries out the packaging of modern oncological drugs.

Servier, Nycomed companies began to build their production facilities; Krka invested in the second stage of the plant. Berlin Chemie, Novo-Nordisk, AstraZeneca have settled in Kaluga pharmaceutical cluster alone. One of the leaders of the world pharma, Novartis, is building its plant in St. Petersburg.

"Plans for the construction of the Nycomed plant were discussed back in 1996, but then it was terribly difficult to convince them to invest in an unstable market," says Andrey Potapov, head of the representative office of the Japanese company Takeda (which bought Nycomed). – We returned to this issue in the early 2000s. Then the economy developed dynamically, the business climate improved, and the business grew significantly. It has become easier to convince people making investment decisions to come to Russia seriously and for a long time." Taking into account all the realities, a business case was developed, and after its thorough evaluation, a positive decision was made to build a plant in Russia. Last year, the plant in Yaroslavl produced its first products. The company expects that production volumes will gradually increase due to the expansion of the range of medicines. According to Andrey Potapov, the patient will have access to a high-quality and "fresh" product, possibly cheaper over time (when the plant's capacity is fully loaded). It is also planned to reduce logistics costs – with large production volumes and in case of possible access to preferences from the state.

Preferences for local producers are one of the levers that promote localization. In public procurement, only a local product receives a 15% discount on the price. "While there was no precise definition of what is a local product, many companies began to place packaging of their drugs at local production facilities," says Nikolay Demidov. "However, the Ministry of Industry and Trade proposed to introduce a differentiated system of preferences after 2014, depending on the stage of production." We are talking about the fact that a 15% discount may remain for a product packaged in Russia, a 30% discount for a finished dosage form, and a 40% discount for a full–cycle product started with the production of a substance.

The choice of localization methods largely depends on the volume of sales, the complexity of technologies, and the availability of suitable sites in Russia. Some companies have chosen contract manufacturing for themselves. "We considered various localization options, including the construction of a plant," says Sergey Smirnov, a representative of Bayer. – However, for the time being, based on our sales volumes, we decided to stop at contract production. The choice fell on the Russian company “Medsintez” primarily because it shares our requirements for quality standards, which are higher than GMP standards. Our cooperation began with the production of a full cycle of an anti-infective drug. Now a secondary packaging project is being launched in order to gradually move to full-cycle production. This will happen this year. This approach is related to the specifics of different products."

Medicines under contractAccording to Nikolay Demidov, a new stage is coming in the industry: companies are beginning to transfer the production of innovative drugs to Russia.

This is stated by representatives of the leaders of the world pharma, whose portfolios are mainly formed from innovative medicines, and their plants in Russia are about to enter service or start working at full capacity. "The leaders of the world pharma showed more interest in our market at the turn of 2008 and 2009,– says Nikolay Demidov. – Firstly, it began to show good growth rates, better compared to established markets; secondly, it began to move more actively towards a civilized status: more GMP-certified production facilities appeared (and this is important, including for contract projects), thirdly, the government sets clear goals and manages processes in accordance with these goals are to saturate the market with products of their own production, increase their volume in the list of vital medicines (VED) to 80 percent by 2018 and stimulate the creation of their own innovative medicines." In 2013, according to Demidov, the volume of localized innovative drugs has already amounted to 2-2.2 billion dollars, while imports – about 4.5 billion. A few years ago, almost no foreign innovative drugs were produced on the territory of Russia.

One of the leaders of the global pharma, Roche, packs its drugs at one of the R-Pharma plants, but, according to the head of the Roche representative office in Russia, Milos Petrovich, will soon transfer full–cycle technologies to partner sites: "Our drugs are among the most complex on the market. It's not like pouring soda into a glass. Therefore, it takes years to prepare for the full cycle."

Another manufacturer of innovative products, AstraZeneca, is engaged in packaging its drugs at two plants – Ortat (part of R-Pharm) and ZiO-Zdorovye. And now AstraZeneca has started the construction of a full-cycle plant in the Kaluga Region with an investment of about $ 187 million, which will produce at least 30 innovative drugs for such important areas as oncology, cardiology, pulmonology, gastroenterology and psychiatry. The release of trial batches is expected at the end of this year.

Recently, Pfizer and the Russian pharmaceutical manufacturer NPO Petrovax Pharm (part of the Interros Group) invited journalists to the production in the Podolsk district near Moscow to take a look at the state–of-the-art assembly and bottling lines of an innovative 13-valent vaccine against pneumococcal infection. Since this year, vaccination against pneumococcal infection has been included in the National Calendar of Preventive Vaccinations. According to the World Health Organization, pneumococcal infection is the number one killer of all diseases prevented by vaccination: 1.6 million people die from it every year, of which a third are children under five years old. Pfizer's 13-valent vaccine, launched on the world market in 2009, is the most modern achievement in this field and important for our country, since it covers most of the serotypes of infection relevant to Russia.

The agreement on the intention to place the production of the vaccine at the Petrovax site was concluded in 2011. It took two years to transfer the technology to Russia. In addition to the fact that the production of Petrovax was GMP certified by independent organizations from Slovakia and Ukraine, a powerful audit was conducted by one of the world's grandees, who confirmed that this site is suitable for the company. And not only the playground – people. "I immediately realized that we, as professionals, speak the same language," said Leon Kogan, Senior Director of Production Development at Pfizer in Russia. The choice of the most modern equipment, staff training, endless control of what was done at all stages was a useful school for both companies. "When I, almost jumping with excitement, conducted one of my big bosses from the head office in New York around the plant after the technology transfer was completed, I was waiting for the most enthusiastic response," says Leon Kogan. – And at first I was even upset by the boss's words that he was not surprised." And then I calmed down: it means that everything turned out as it should, as it should be for such a well–known company as Pfizer, anywhere in the world - in America, in Europe or in Russia. For the world's number one company, this is the first Russian experience in the production of an almost complete cycle of the most complex innovative product. "Perhaps we could have started with simpler drugs," Mr. Kogan continues, "but we also looked at which product could be in serious demand in this country. And the choice fell on the pneumococcal vaccine, because this infection still brings a lot of troubles, because vaccination against it was not mandatory, although the pediatric community insisted on it." Pfizer is importing the substance for the vaccine (the company has enough global capacity to produce the substance), and the "assembly" of the vaccine is already beginning at Petrovax, and special equipment has been created for this most complex operation (according to Kogan, a real high-tech), installed for the first time in Russia. The equipment at all stages of vaccine creation is equipped with a huge number of sensors and sensors that control the process. Almost something is wrong, and the workpiece automatically leaves the line.

According to Leon Kogan, this first experience already gives grounds to consider Petrovax as a platform for the production of other Pfizer drugs. NPO Petrovax Pharm, established fifteen years ago by a group of chemists and immunologists, built its production facilities with the intention of meeting not only GMP, but also its own strict standards. Now the company is releasing three of its innovative products, including the flu vaccine "Grippol plus", known in the country, created jointly with Solvay (now Abbott). "Cooperation with Pfizer is not the first experience for Petrovax Pharma," says Natalia Puchkova, First Deputy General Director of the company. "We are currently in the process of discussing a number of partnership projects, including with the leaders of the world pharma."

In the early 2000s, the share of domestic medicines in our market did not exceed 20%. Now, if we consider a local foreign product packaged in Russia, it reaches 45%. The production of the finished mold in our territory is approaching 30%. Experts believe that this share should grow significantly in the next two years, when the capacities of several plants will be introduced at once. In addition, volumes will be increased at existing production facilities. This is facilitated not only by the measures of Pharma 2020, but also by the significant growth of the market (since 2008 it has almost doubled to 1 trillion rubles), as well as other measures of the government, which designates healthcare and pharma as its priorities.

From contract to licensePharma 2020 assumed that at the first stage, licensing agreements of foreign companies with local ones would contribute to increasing the share of domestic innovative drugs.

"We built our model in order to offer production as a localization platform," says the CEO of the Russian innovation company R-Pharm Vasily Ignatiev. – We understood that not all foreigners would build their factories, but would look for partners for localization. And we, being a long-time partner of many global distribution companies, began to offer them our services. However, we immediately aimed not at conventional contract production, but at a more profitable one – licensed. Now we have more than 20 foreign partners and about 70 drugs." Among the partners of R-Pharma are such well-known companies as Roche, Bristol-Myers Squibb, AbbVie and others. Under the terms of contract production, the Russian partner buys raw materials, produces the product and gives it to its foreign partner. Under the terms of the license agreement, raw materials and brand rights are purchased. Partners promote and sell by agreement. Often a local company gets the rights to the local market, a partner gets the rights to the rest of the world. But it also happens otherwise. R-Pharma has several projects with worldwide sales rights, with the exception of some markets. Having felt its strength, R-Pharm takes products at an earlier stage – even before the registration of the drug. This is, for example, an agreement with UCB on a drug for the treatment of rheumatoid arthritis.

A similar policy is also practiced by the High-Tech Center "HimRar". The head of HIMRAR, Andrey Ivashchenko, even at the time of the formation of the Pharma 2020 strategy, said that while our business has not yet woken up for innovation, it is possible and necessary to fill a niche with external innovations. According to him, many small but effective companies in the West began to hang at different stages not for scientific reasons, but because of a lack of funding, especially after 2008. HimRar has held dozens of negotiations with both small and large companies. Large companies, according to Ivashchenko, began to revise their structures and abandon some areas. For example, Roche began to curtail research in the field of virology in order to focus on oncology. "And we showed remarkable activity," says Andrey Ivashchenko. "As a result, the Viriom company was created, which received two promising molecules for HIV therapy at the stage of transition from pre–clinic to clinic." Now one of the selected molecules is undergoing the second stage of clinical trials. The results are encouraging.

By agreement with the same Roche, the company Tiarex was created to develop a drug intended for the treatment of thrombosis. Two drugs are in the development of another "daughter" of "HIMRAR" – the company "Saterex", one of them is Pfizer, and the company "NewVak" develops products obtained from Agenus and Janssen.

The import of technologies was actively engaged in the company "NovaMedica" created by Rusnano and the American investment company Domain Associates LLC and the venture fund "RosnanoMedInvest". "We have analyzed more than a hundred products for transfer, which we are looking for mainly not from big pharma, but from medium and small companies," says Vladimir Gudrus, CEO of TeamDrive, which manages NovaMedica and RosnanoMedInvest. – Technology import is the fastest way to bridge the gap between the Russian and developed markets and for faster access of patients to innovative drugs." NovaMedica has already concluded four deals on 10-12 products in the field of ophthalmology, gastroenterology, immunology; the company is building a modern production facility in Kaluga. In addition, part of the research facilities will be located in Skolkovo. RosnanoMedInvest selects projects for venture financing at different stages of clinical trials. There are already eight deals in the fund's portfolio.

According to Andrey Ivashchenko, licensing agreements also help Russian pharma to increase professionalism, train personnel in new technologies, and accelerate the development of its own developments. State aid is also aimed at this, including within the framework of Pharma 2020. "I am also impressed by the fact that the Pharma 2020 program is not a kind of frozen document," says Vasily Ignatiev. – Yes, the goals are firm, but when the Ministry of Industry sees that the first stage of localization is taking place at an accelerated pace, and mainly at the expense of the companies themselves, the money saved can be moved faster towards innovative developments."

Another thing is that this flexibility of the Ministry of Industry is by no means always accompanied by the flexibility of other regulators, Ivashchenko believes: "Otherwise it turns out that one agency presses on the gas, the other on the brake. The Ministry of Industry says "let's develop", throws up some money, and the Ministry of Health: "Wait, we don't understand everything here."" Many market participants complain that the Ministry of Health greatly slows down permits for clinical trials. "They have not been focused on innovation all their lives,– says Ivashchenko. – It's difficult for them. They are afraid to give such permits. But sometimes they refuse purely for formal reasons. We have to conduct clinical trials abroad. We are in Thailand, R-Pharm is in Australia. This is delaying the process very much, and, alas, we are not yet keeping up with the schedule that was planned in the innovation creation program."

In order to successfully implement plans for the growth of pharmaceutical production in Russia, the regulatory environment, according to Andrey Potapov from Takeda, should be more transparent and flexible: "There are countries where registration can be completed in six months. I would be just happy if we had such an opportunity." It would be fair to accelerate the expertise for the products of high-tech factories that are located here in the country, next to experts and the regulator, and which can always be evaluated. It may be worth reducing and even canceling the program of local clinical trials for such manufacturers, if clinical trials were carried out abroad, and the production of the drug was implemented in Russia. It is necessary to encourage companies actively developing research and production projects in Russia: building production, supporting education and science with various projects.

According to market participants, the development of the market and the industry could be accelerated. "Big Pharma is the main source of innovation,– says Vasily Ignatiev. – And it can no longer be stimulated by barriers, but by mutual benefit. For example, an innovation produced in Russia may undergo accelerated registration. Or it can enter the list of VED not in five years, but in a year." Then the population will get closer to good, really life-improving products and will flinch less from threats from the outside.

Portal "Eternal youth" http://vechnayamolodost.ru08.04.2014