02 April 2009

Russian pharmaceutical industry: help financially!

Recipe for Russian pharmaMichael is found, STRF.ru

The participants of the conference organized by the Association of Russian Pharmaceutical Manufacturers on the interaction of the state and domestic companies once again raised the topic of state support for Russian industrial pharmacology.

And once again there were more questions than there were answers to them, and medicines in pharmacies are rapidly becoming more expensive in the meantime.

All generics must be Russian?..The speakers at the event, Deputy head of Roszdravnadzor Elena Telnova and Head of the Pharmaceutical Industry Department of the Ministry of Industry and Trade Dmitry Kolobov, as if by agreement, said that the state should support domestic pharma in every way in the transition to GMP standards and encourage the replacement of generic drugs with domestic production.

(Generic is a drug marketed on the market, for the active substance of which the patent or other exclusive intellectual property rights of its developers have expired.) Ms. Telnova showed the audience a list of more than two dozen imported generics, the import price of which, according to the department, has increased by more than 20 percent over the past six months. Almost half of this list consists of drugs from the Latvian pharmaceutical company "Olainpharm". As Elena Telnova explained, she demonstrates these data not just for the sake of satisfying the curiosity of those present. "This list could form the basis of the list of import-substituting drugs, which our enterprises should focus on. After all, the same drugs "Olainfarma" prices are rising by leaps and bounds!", – the deputy head of Roszdravnadzor was indignant. And she reported that the so-called list of vital and essential medicines approved in 2007 by the Russian government (the list of essential medicines), which includes the minimum list of medicines that each pharmacy is obliged to sell, needs to be adjusted "with the preferential inclusion of domestic drugs in it." Ms. Telnova also proposed "to provide legislative advantages for domestic drugs in public procurement," however, provided that "the necessary nomenclature and volume of production will be provided." But the Roszdravnadzor official did not say how the state can be one hundred percent sure that domestic plants will be able to produce a sufficient volume of VED.

The topic of import substitution was continued by another representative of the government, Dmitry Kolobov. According to him, the Ministry of Industry and Trade has already "formed a list of domestic medicines that can replace foreign drugs with the same nomenclature." Moreover, it was not just formed, but also "sent to the Ministry of Health for coordination with its leadership." According to Mr. Kolobov, out of 180 drugs purchased with budget money that are not produced in the Russian Federation, about 110 are the same generics, "the period of localization of production in Russia is one and a half to two years." If the import substitution project can be implemented in Russia, budgets of all levels will be able to save an average of 30 percent on public procurement of medicines.

The myth of the breakthroughIn order to make it possible to modernize old and launch new production facilities in the name of the bright idea of import substitution, an official of the Ministry of Industry and Trade proposed to introduce "subsidizing interest rates on loans to enterprises aimed at technological re-equipment of the industry," and first of all to those who transfer production to international GMP standards.

Moreover, banks should be allowed to "accept obligations for the supply of medicines as collateral." However, the representative of the Ministry of Industry and Trade did not say anything about what the maximum rates on loans will be compensated by the state, or what the largest amount he will have to pay to a particular enterprise as a subsidy. Meanwhile, in the measures of state support, this issue is almost the key one. Especially if we take into account the significant rise in interest rates of banks, including state-owned ones, due to the crisis. In addition, according to Roszdravnadzor, 60 percent of the production assets of the domestic pharmaceutical industry are not only obsolete, but worn out to the limit of their capabilities.

The question of where to get qualified personnel to work on new equipment also hung in the air. As noted by the dean of the Faculty of Postgraduate Professional Education of pharmacists of the Moscow Medical Academy. Sechenova Elena Maksimkina, domestic specialized universities can only dream of educational and experimental mini-productions that meet GMP standards. Meanwhile, in many foreign countries, training is simply unthinkable without such special workshops.

If Russia needs import substitution, then first of all "high-tech" drugs intended for the treatment of severe chronic diseases included in the state target program "seven nosologies" (for example, hemophilia or multiple sclerosis). The share of imports of such medicines is almost 100 percent, as Maria Denisova, the operational director of the Russian representative office of the research company IMS Health, once again reminded the audience.

Cheaper does not mean betterThe experts invited to the conference did not ignore the issue of consumers' attitude to domestic drugs.

"We have conducted a fairly large amount of research," Oleg Feldman, General director of the research company KOMCON–Pharma, told the participants, "We hear serious complaints from both pharmacists and doctors about the quality of Russian medicines."

"Domestic pharmaceutical companies simply cannot prove that their generics are not worse. And it's possible! Methods of comparative studies of drugs for therapeutic equivalence on so-called "surrogate points" have already been developed and tested. For example, we tested four drugs against heart failure with the active ingredient "enalapril", both domestic and foreign. And all of them had comparable indicators, including efficiency. Unfortunately, our manufacturers do not finance such research," complained Pavel Vorobyov, president of the Association "Society for Pharmacoeconomical Research".

However, Viktor Dmitriev, president of the Association of Russian Pharmaceutical Manufacturers, reacted immediately to this accusation and, of course, tried to justify domestic pharma. In his opinion, the financing of such research by companies will immediately affect the cost of domestic medicines, and clearly not in favor of their cheapening. By the way, Mr. Dmitriev spoke in favor of centralized purchases under the program for providing medicines to preferential categories of citizens (the so-called ONLS, formerly DLO) through the Ministry of Health with clearly fixed preferences to domestic manufacturers. Apparently, it is much easier for domestic pharmaceutical manufacturers to negotiate with the Ministry of Health than to prove the competitiveness of their products to doctors with specific studies. After all, if there is no imported drug in the list under the ONLS program, the doctor simply will not be able to write a preferential prescription for this drug.

Domestic pharma and Belarusian brothersViktor Kalmykov, Deputy Director of the Department of Trade Negotiations of the Ministry of Economic Development, shared a sad anecdote with the participants of the conference.

It turns out that the MAYOR is aware of only one country in the world where there is clear discrimination against imported Russian medicines. This is Belarus. "Discrimination of Russian pharmaceutical products in this country occurs through its taxation at the maximum VAT rate, while the products of other exporters are exempt from VAT altogether. We have held talks with Belarusian partners and hope that the problem will be resolved in the near future," the official said. In addition, Belarusian outlets are forbidden to display imported goods in a prominent place, and in relation to Belarusian goods, on the contrary, it is prescribed to do so, Mr. Kalmykov complained.

So, in order for Russians to be able to buy domestic generic drugs in pharmacies that are not inferior to imported analogues, the Russian pharmaceutical industry needs modern equipment and qualified personnel. If we translate this phrase into the language of economics, then by and large, nothing but huge investments are needed for domestic pharma. Moreover, the money will have to be invested not only directly in pharma, but also in science and education. The same can be said about the automotive industry or agriculture, although these sectors employ an order of magnitude more people than in the production of medicines. But the markets are comparable in terms of volumes. And do not forget about the security of the state. Therefore, budget money will still have to be spent, but whether the stimulation of domestic pharma will lead to active import substitution remains to be seen. In the meantime, it's better for all of us just not to get sick, so as not to thank the native government for medicines that are becoming more expensive almost every day.

Portal "Eternal youth" www.vechnayamolodost.ru02.04.2009

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