26 May 2008

Problems of domestic pharmaceuticals and possible solutions

On the eve of the round table "Strategy for the development of the pharmaceutical industry until 2020 as a model for the transition of the Russian economy to an innovative development scenario", which will be held on June 6 in the hall of the Board of the Ministry of Education and Science, Park-Media decided to find out the details of the development of the pharmaceutical industry: problems and possible solutions. A.Ivashchenko, the project manager of the HimRar CVT, answered the questions of the representative of Park-Media LLC.

The pharmaceutical industry in the modern economy is a kind of litmus test showing the level of its innovative development. Being at the junction of economic, social, and scientific spheres, it shows the "social innovation" of the state in terms of novelty and availability of medicines. We are talking with Andrey Ivashchenko, the project manager of the ChemRar Central Research Center, about what problems there are in the domestic pharmaceutical industry and about possible ways to solve them.

– What problems and tasks could you identify in the domestic pharmaceutical industry?– The pharmaceutical industry is a special industry.

The development cycle of new products in it is much longer than in others. Judge for yourself – a new drug has been developed for about 10 years, besides, any medicinal and diagnostic inventions must be tested on humans, and they are long and expensive. Therefore, it is very risky and expensive to develop new pharmaceutical products. It is no coincidence that it is said that the degree of development of the pharmaceutical industry is an indicator of the degree of innovation in the development of the country. If mechanisms have been implemented in the country that allow the development of new products in the pharmaceutical industry, then all other mechanisms, less risky, are working in the country.

And here it is important, however, as in any other branch of innovative development, to fill the vacuum between science and industry. Academic research in Russia is brought to a certain stage (relatively speaking, to the first success in vitro), but no one picks them up further – the risk is too great. And the domestic industry is ready to take products that have already passed the third phase of clinical trials. But between these two stages there is a void of 6-7 years and several tens of millions of dollars for one product (for Russia).

Therefore, the first task is to close this cycle. There is only one way to do this – the state should take over the financing of this "intermediate" phase, which is being done all over the world.

For example, when the NASDAQ "fell" in America in 2002 and a lot of private money left the risky investment market, the state began to finance the technologization of knowledge much further. There were Road Map programs, NIH – National Institute of Health, American programs aimed at financing "suspended" developments to the stage when American pharmaceutical companies were ready to turn them into pills. It is necessary to develop similar things in our country, the state should monitor this "void" and finance just enough to fill it.

– Now the "void" is not being filled at all?– Absolutely.

Moreover, the first steps that are being taken in this direction cannot fully solve this problem. The creation of the Russian venture corporation has led to the fact that a billion dollars are poured into the venture capital investment market every year. But the fact is that a venture fund by definition invests in stocks. That is, there should already be a certain stratap, with a team and a patent. This is quite acceptable for firms engaged in, for example, IT technologies, where there are already start-up firms. But there are so few such firms in the field of living systems and pharmaceuticals that venture funds that are emerging now have nowhere to invest. They find inventors, often dubious, who talk about something incomprehensible and ask for money to do something else incomprehensible. A preliminary stage is needed, the stage of seed financing, i.e. it is necessary to do something similar to what the Bortnik foundation does, but only more massively.

In the industry of developed countries, this stage is covered by the "three F's" – Fool, Family and Friends. Fools, family and friends give money. But we also have entrepreneurs who have not had time to grow old for this. Therefore, state support is important (through grants, special programs, maybe through the creation of cooperative venture funds).

This main task can be solved financially – there is money in the country. But will it be possible to solve it organizationally? To make sure that not all the allocated money goes into the sand, but at least 10% is used for the cause? If so, then in 3-5 years these startup firms will appear, they will already be financed by venture funds, some of these firms will go bankrupt, others will be bought up by strategic investors or go to IPO - that is, there will be a normal innovation cycle. Such a task is generally in the industry, and especially in the pharmaceutical industry.

There are other specifics in the pharmaceutical industry. Its technologization and commercialization is based on advances in biology and chemistry over the past decades. Compared to other sciences, there have been many successes here, this is confirmed by the Nobel prizes. Basically, they are all related to the decoding of the human genome. But just in this area, and in others too, our academic science was largely disconnected from world development. Therefore, the second task is to quickly learn what Western scientific schools have passed over these 15-20 years. If this task is solved, then we will have some success in the pharmaceutical industry. If not, we will continue to move in "our" directions to please individual ideologists of our science. In this case, it is difficult to predict how this may end, but most likely we will develop "something", get a result, then they will explain to us that we are not ready for these results yet, that they will play a role in 50-100 years, i.e. we will have some kind of abstraction that is poorly technologized and commercialized.

– How can we quickly reduce this 15-20-year gap between Western and our science?– There are a lot of tools for this.

A huge number of our compatriots have gone to work abroad. If we could return at least some of them (as China does, for example), then we would immediately have modern laboratories, and we could develop science from exactly the level at which it is in the West. Young people from universities who will gather around such laboratories will have the opportunity to study on a modern basis, and not on an outdated one. I am convinced that the return of our compatriots could be a strong and effective tool. Peter the Great did the same thing . When he needed to build a fleet and needed masters, he went to study himself. Our task in this sense is easier, we only need to return our compatriots. It is clear that the returned scientists should not be paid the money that they earn in Russian science today. There should be serious grants, according to my estimates, at least $100 thousand per annum should be given for one such scientist.

In addition, we have a strong competitive advantage – we have a century-old tradition of chemical and biological school. Our science has a huge potential in this sense. You just need to turn it in the right direction. In China, a big copy machine, they learn everything quickly, but they do not have the traditions of scientific schools and our creativity – and this is a key competitive advantage for innovative development.

– In the strategy – concept there was a thesis that it is necessary to establish production in Russia of drugs that do not have generic analogues. What do you think, if this is achievable, then in what time frame?– This task splits into two.

First. For example, Glivec (Glivec) Novartis Pharma is sold – an innovative drug, there are no generic analogues, because this group of drugs appeared less than 20 years ago. What can be done to make such drugs produced in our country?

You can go by the so-called automobile model. Western car manufacturers are offered the following. Do you want to sell your Mitsubishi in Russia? Then build factories, but no more, for example, 5. Do you want your $100 million sales of innovative drugs on the Russian market? Build a factory. This is the first and not the most important step. But it will create jobs that will meet GMP standards, and people will be taught to work carefully. This, of course, will lead to an increase in labor productivity in the industry (and this is one of the key problems not only in pharmaceuticals). This means that competition will increase. But these events will not create engineers, because Glivek was not developed here. Scientists in this case will not be in demand (only if they work for Western contractors).

Therefore, in my opinion, it is much more important to stimulate innovative pharmaceutical manufacturers. It is necessary to create scientific research centers in Russia. Such a trait of our national character as creativity, it seems to me, would lead to the fact that in the near future Russia could take exactly those places in the international distribution of labor where the creation of something new is required. This will happen only if the state encourages the creation of research centers (as in the same China). The logic is very simple. It is known that, on average, a Western innovation firm spends 10-15% of its annual turnover on research. We can say: dear sirs, you are selling on our market for $ 5 billion, spend 7% on research in Russia. We have scientists, a good education, we can allocate places in special economic zones. In Singapore, for example, the government adds another dollar to anyone who spends a dollar on research. And thus makes this industry attractive.

If such a policy were pursued, many research centers in the field of living systems would arise. They are, again, a tool – and would teach our youth and scientists to work from the level from which the whole world is working now. There would be a demand in the country for graduates of the chemical faculty, biofac and so on.

Therefore, it is written in the strategy that the first stages concern labor productivity, and the second – the launch of various developments. It is clear that if the development of a drug takes 10 years, then it should be launched now. Then the transition to GMP will help us develop for 5 years, and by that time innovative elements will have arrived, which will begin to produce their own innovative products.

– The transition to GMP is often written in the press, this issue has been raised more than once at various round tables. In particular, it is said that precisely because we cannot finally switch to this standard, we are ceding the domestic market to imported suppliers. Is this problem far-fetched or is it really so significant?– It's hard to say.

If we talk about imported suppliers, then they should be divided into two groups – generic firms and innovative ones.

We currently have mainly Eastern European generic companies on the generic market. But these firms are brand–generics, real crocodiles (in the good sense of the word) – Indian firms have not yet come to our market. When they come en masse with their prices, then our Eastern European neighbors will "get sick." Indian generic firms supply the whole world, so they can keep prices very low. Unlike generic Eastern European colleagues, who live by branding their names, but whose production costs are more expensive. And then the question arises – to what extent is GMP production implemented in the world?

In Eastern European countries, it is implemented quite strongly, so the products are more expensive. There are also a lot of GMP production facilities in China and India, but the latest news suggests that, for example, the US FDA (Food and Drug Administration) has to seriously increase its staff in order to inspect production facilities located in China and India. It turns out that the products are not made at a factory operating according to the GMP standard, but in a neighboring village. This is a big problem, and in this sense, I believe that the issue of GMP is not so significant. It is important that the absence of this standard seriously hinders us in terms of labor productivity – it is low, and GMP would allow it to increase.

If we talk about the export of innovative drugs, then we have less than 1% of them at all, and therefore it is not relevant how they are produced:  by GMP or not. As they say, a negligible number.

Where else is GMP relevant? In general, there are two types of drugs – based on synthetic substances, when traditional drugs are made by chemical synthesis, and drugs based on biological substances. They are made on the basis of biotechnological synthesis, where not a chemical reaction is used, but some bacteria or cells produce something that is a drug.

The culture of working with biotechnological drugs is much higher. Therefore, GMP is especially relevant here. When two people make the same protein on a large scale, some get this protein active, others don't. A chemical substance in this sense is more unambiguous: if you synthesized it, it is still active. And proteins can curl up the wrong way during production, the wrong active side "sticking out". Therefore, they enter the body, exit it, and do not have a therapeutic effect.

The trouble is that there is no modern biotechnological production in Russia at all. There are pilot things. Biotechnologies have been developing in the West for the last 15-20 years, we have again dropped out of the process. Here is the task of buying such productions, their construction, as they say, in a green clearing from scratch. I guess this is not the most difficult problem. We will buy the production – it costs $50 million now (previously, such a plant would have cost $ 100 million, fortunately, they quickly become cheaper, like mobile phones). But there are no people who know how to work in this production. So, we need to buy Western specialists, train our youth. The task is solvable, but through technology transfer. And we will be able to catch up – the level of education of graduates of our best leading universities will allow us to do this in a short time. With the culture of production, however, it will be more difficult. The Chinese are more disciplined in this sense, they are like robots… But on the other hand, we are building rockets that fly into space and do not fall. Why don't we make neat and therapeutic proteins?

– Is biotechnology the future?– The XXI century is the century of the sciences of living systems, even the potential of nanotechnology is probably less.

Any commercialization of knowledge happens after fundamental discoveries. All the fundamental discoveries of the mid-twentieth century have been exhausted, and humanity has not made new discoveries for a long time. The decoding of the genome is something similar to a discovery, but it is rather a prerequisite for discoveries.

If this logic is correct, then all the money, all the new technologies, all the development in the XXI century in the world will be in the field of living systems. If the twentieth century was the century of physics, then the XXI century is the century of biology. Our Nobel laureate Vitaly Ginzubrg also writes about this in his "Phizminimum". He lists the areas where physics will give results in the XXI century, and at the end says that physics will play a service role in this century, and biology will give the main result.

Probably 80% of biotechnologies are pharmaceuticals, diagnostics, i.e. those related to treatment and prevention. The remaining 20% is agriculture and some other segments.

– In 2007, the share of domestic drugs in DLO was only 7%. According to the calculations of the Association of Russian Pharmaceutical Manufacturers, we could have saved 9 billion rubles of budget money if foreign companies had not been given the green light. How can you comment on this?– I haven't seen these calculations, but I can imagine where they come from.

When the state buys an innovative product that is really needed and which is not on the market, this is understandable. But the trouble is that often the state buys a brandgeneric, paying for it as an innovative product, simply because there is a relationship with one or another pharmaceutical manufacturer. The manufacturer's patent has ended – a large number of different companies can and do produce this product, the price for it falls 5 times in developed countries. But our brandgeneric price drops by 10-20%, i.e. we continue to overpay for the name. But with this money it would be possible to buy several times more of this medicine, including from domestic manufacturers.

If we look at what is bought from us for DLO and at what prices, we will see that there is a very large part of the brandgenerics. It would be possible to find similar drugs of inferior quality, which are also purchased in developed countries.

In the English healthcare system, everything is simple in this sense. The state pays only for generics. Do you want innovative drugs? There is insurance medicine. The state is not inclined to overpay for brands, because when it does, it thereby kills innovation. Well, why would a manufacturer develop a new product when, despite the fact that the patent has ended, he still gets super profits because he managed to convince someone that his product is better?

In America, there is a whole legislative system against such evergreen patents, which are very clearly monitored: do you really have an innovation, or are you portraying an innovation? But we don't have that, we are still a country of brandgenerics.

I think when our Ministry of Health publicly displays the Concept of Healthcare Development, we will see what model we will develop according to. If it is a model of developed countries (as in England or America), then our breadgeneric products will disappear quite quickly. People will have to decide whether to make generics cheaply and efficiently and, perhaps, compete with Asian manufacturers with the support of the state. Or develop new products. Again, with the help of the state, because our pharmaceutical manufacturers do not have money for development yet.

The state must, if it wants to have this industry at home – and it wants to – now launch this innovation cycle. I think that after all, it is better for the consumer that the industry be domestic. After all, he not only buys pills, he has children who want to learn some sciences. And if there are no innovative industries, there will be no demand for graduates, universities will "die", and then we will have an energy scenario for the development of the economy, for which, as "friendly analysts" once considered, 50 million people are enough. Demographic programs will become irrelevant. Unwinding this logic in the opposite direction, it is clear that it is necessary to help our manufacturers fight with competitors: with Asian countries where the state provides support, with multinational innovative firms that have already been promoted in this market and have huge turnover.

– Many countries have adopted a national drug policy (NLP). There is no such thing in Russia…– And this is very bad.

NLP is a clear statement of the rules of the game in this market: what does the state pay for – generics, or innovative medicines, or all together? If innovative medicines, what does it have to do with pricing: free or do we use reference prices, if reference, how are they considered? This is all already worked out. There are perfectly working LP's, we just need to apply the most interesting model for us, based on the goals – who do we want to be after some time? There are no methodological difficulties here, only political will is needed.

– Medical equipment plays an important role in the treatment and prevention of diseases. And here, too, we are firmly sitting "on an imported needle." Is it really possible to get off it? – Yes, there really is a distrust of our manufacturers, who grew out of the defense industry, where it was not the consumer qualities of a product, its ergonomics, convenience, but its functionality that was important - so that everything worked in a nuclear explosion.

But we are also seriously behind here. The range of medical equipment in the world is very wide. We have just started to produce something, even began to make tomographic equipment, and this is good. But there is a whole class of new diagnostic equipment that has appeared quite recently and is associated with the decoding of the human genome. When they talk about personal medicine now, in particular, they mean the appearance on the market of a pair of drugs and diagnostic equipment for this medicine, which allows you to determine whether this drug will help you or not, and monitor the effectiveness of exposure during treatment.

One can imagine that in 10 years a person will be admitted to a hospital with some kind of oncological disease, where the profile of this particular cancer will be diagnosed on biomarkers (there will be 100, 200, 300 pieces). A personal cocktail will be prepared from the necessary medicines, and again, with biomarkers, it will be possible to see how adequate the treatment is. That is, there will be a spliced system of medicines and diagnostic devices, medical equipment, if you want. In this sense, if we make a development concept until 2020, then we need to pay attention to the development of the production of diagnostic equipment. Here will be the main innovation and the main superprofits of Western corporations, and maybe even Russian ones. If only the state takes the right position on this issue.

Portal "Eternal youth" www.vechnayamolodost.ru26.05.2008

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