Small business in the Russian pharmaceutical industry

Solvency test
New prospects are opening up for small businesses in the Russian pharmaceutical industryAlexander Emelianenkov, "Russian Business Newspaper", 26.01.2010

The Government of the Russian Federation has submitted to the State Duma and is preparing for the first reading a new bill "On the turnover of medicines". The Russian Business Newspaper told in detail about the goals pursued by its developers and how this initiative was perceived in the pharmaceutical community at the end of last year ("Wholesale, retail, rollback, pharmacy" - RBG, 01.12.2009). And after that, at the Expert Council organized by the editorial board, its understanding of the ways of pharmaceutical development They were given by representatives of science, innovative business and those who are called upon to create conditions for the rise of this most important industry.

Yuri Sukhanov, Deputy General Director of Binnopharm CJSC:– Our biopharmaceutical complex was opened in October 2009.

They began to build it as a pharmaceutical enterprise rather. And now, if we skip the intermediate stages, we have come to the concept of a cluster. Its components are science, education, production and a platform for scientific and business communication.

Now a laboratory for applied research in biotechnology for pharmaceuticals is being created jointly with the Faculty of Biology of Moscow State University. There is already equipment, there are squares. Together with the same biofac, we are developing a training program for biotechnologists. Our common task in the near future is to enter master's programs in biotechnology and, possibly, in the so–called fundamental veterinary medicine. This is the training of specialists who are able to work in accordance with the GLP (Fair Laboratory Practice) standard. There is a problem with this in Russia now – there is no one to conduct preclinical tests according to the GLP standard, except, perhaps, in Pushchino.

– Is it necessary to train such specialists purposefully?- Yes.

And this is another argument in favor of clusters. We are absolutely convinced that it is with this approach that it is possible to bridge the gap between science, production and practical healthcare. It is clusters that can become the basis for the creation of an innovative Russian pharmaceutical industry. The one that will be able to compete on the international market.

– And now there is a desert here, which they are even afraid to enter?– Do you understand what's going on?

The manufacturer should participate in the process of creating the drug as early as possible, at the earliest possible stage. Because it is the manufacturer who will register it, he will conduct both preclinical and clinical trials, having produced experimental batches of the drug. Moreover, he will supply these drugs. Ideally, to the state, according to long–term state programs.

Konstantin Balakin, Director of the non-profit partnership of the Institutes of the Russian Academy of Sciences "Orkhimed":– Last summer we initiated a large–scale project - the creation of a National Bioscreening Network.

Among the developers are the Institute of General Genetics and the Orkhimed Partnership, which includes 11 institutes of the Russian Academy of Sciences, which are mainly engaged in chemistry, biological chemistry, and medical chemistry. Our goal is to develop new medicines. And the National Bioscreening Network is not just an infrastructure for testing molecules, but also a system for selecting and promoting promising academic developments to the stage of clinical trials.

We ask for support from the Ministry of Industry and Trade for our project. By 2012, we plan to develop several clinical drug candidates and launch a screening infrastructure, which will continue to develop itself – with the support of the pharmaceutical business and development institutes.

Maxim Tsvetkov, General Director of LLC "Scientific Company "Flamena":– And we came to this market, we can say, from the outside, and there were no scientific authorities behind our backs.

And then, when the material was provided and the first results were received, the truly creative work began. Now we are at the stage of registration of a pharmaceutical substance.

– And who helps you with finances? Where does the money for research come from?– There is no mystery.

Because there is no third-party money. We have been developing our small-format business for 15 years before. But gradually they grew and reached a state when they wanted to try something more interesting, complexly organized. At that time we had no idea how long this path was, but we understood that it was a venture. At first we were lucky, and we got hooked on the idea.

– And then pride did not allow you to retreat?– Rather, interest, backed up by organizational capabilities.

When they realized that it was impossible to work with clean substances on the street, they were able to find funds to build a laboratory building with "clean" rooms.

– Without tax benefits and outside help?– Without.

I'll say more. Scientific enterprises in their pure form, as our "Flamena" was conceived, cannot exist at all under the current legislation. Because the Civil Code, by science, implies the performance of only third–party commissioned work - by contract. And the tax code recognizes science as science if you do such work. And everything else applies to anything – to trade, to production, to anything.

It got to the point that the tax inspectorate strongly recommended changing the main type of activity in the registration documents. We were told: you are not stating what you are doing. For a year and a half, completely legally, we are continuously checked: the quarter ends, we submit reports where the value added tax is indicated "for reimbursement", and the next check went. But science is not done in two weeks, like trading. You invest for a long time, and the profit, if you're lucky, will be in years.

– Let's summarize: are you developing a business to earn money for some kind of scientific hobby?– In general, yes – we shift resources from one enterprise to another.

But, of course, we cherish the hope of entrepreneurial success and scientific events!

– Question to the representative of Rusnano: are you ready to pick up such projects? At what stage? And can such structures count on the support of your corporation as a development institution at all?Tatiana Nikolenko, Director of Infrastructure Programs at Rosnanotech Group:

– Rusnano is ready to consider such projects.

What has been said here about the limited resources for the development of innovative pharmaceuticals only convinces me of the correctness of the course that Rusnano chooses. Where, how and at what stage of the development of an innovative drug to invest is the most important question for the development institute.

The process of developing an innovative drug is not cheap, and it is also necessary to technologize the industry, eliminate personnel shortages and much more. Having started at this stage the construction of infrastructure for the initial stages of drug creation – the search and development of new molecules, we will not receive innovative drugs by 2015 or 2020, having spent a lot of money.

Due to the duration, high risk and high cost of drug development processes, it is necessary to put these risks in the portfolio. This means that we need to have a lot of medicinal candidates right now. In this stream, according to the most conservative estimates, 49 out of 50 are eliminated only at the stage of clinical trials, and even more in some therapeutic areas.

– And how, if it's not a secret, do you think it's possible to stimulate the development of innovative pharmaceuticals in Russia?– In my opinion, one of the steps in this direction could be the creation of industry funds.

In this case, the money of Rusnano would attract the money of co-investors who believed that with such a volume of the portfolio, something would "shoot" and the invested funds would not be lost. This is the first. And secondly, we should not limit ourselves at this stage only to the Russian potential, but take on strict, favorable conditions for us and high-quality foreign developments. There is a crisis in the West, too, and now, more than ever before, they are ready to go to cheap infrastructure. Why not try to localize such developments on our territory? In order not to repeat the same scheme from year to year: we provide Western pharmaceutical companies with clinical bases for testing, they work out their programs at dumping prices, take the results, and after a while they offer these same results at exorbitant prices in the form of ready-made medicines.

In other words, it is necessary to add portfolios of Western partners showing interest in Russian infrastructure to the molecules created in our research institutes. To take this mass of molecules and develop them on strict mutually beneficial terms: with the preservation of our exclusive rights to sell all successfully tested drugs on the Russian and CIS markets.

– The approach is clear. But in this case, is there a chance for our academic research institutes to wait for support from Rusnano? And are there any promising applications to Rusnano from the institutes of the Russian Academy of Sciences and the Russian Academy of Medical Sciences?Alexander Ginzburg, Director of the N.F. Gamalei Research Institute of Epidemiology and Microbiology, Academician, Vice President of the Russian Academy of Medical Sciences:

– I undertake to speak only about medicine and biology.

There are applications from academies. But the fundamental basis for this was made, alas, 25 years ago. This is a groundwork that has passed from the Soviet system, no matter how much we scold it.

– And if you don't dig so deep? It is said that innovation is expected from science...– Not to touch the fundamentals?

Then it is called in another way - a rationalization proposal, or "ratsukha", as they used to say in Soviet times. When a well-made thing is modified by everyone at their own level.

– In fact, I wanted to understand something else. It is not how many times and for what reasons scientists of academic research institutes have applied to the nanocorporation, but how many applications from there, duly executed, have been accepted and are under consideration at the development institute under the name of GC "Rosnanotech". After all, they do not issue research grants there, but support promising projects with money...Sergey Kolesnikov, Deputy Chairman of the State Duma Committee on Healthcare, Academician of the Russian Academy of Medical Sciences:

– The rules of the game at Rusnano have changed many times since the corporation was founded.

I was among the authors of the law, so I am closely following this. The very first statement is that Rusnano will not invest in scientific research. Point.

– Isn't that the case now?– Now, it seems, the concept is different.

We have just heard that we will purchase ready-made developments abroad. What's that supposed to mean? We will not buy at home, but we will buy abroad. A strange position. In this case, what was Rusnano created for – to develop science in other countries and indifferently watch how it bends in Russia? You will come to the Institute of Chemistry in Irkutsk, to the Institute of Organic Chemistry in Novosibirsk – you will receive a portfolio of a thousand promising molecules. Invest in them!

Tatiana Nikolenko:– We are not talking about buying individual medicinal candidates abroad.

We are talking about attracting promising technologies to Russia and creating modern infrastructure on our territory. A large portfolio of developments is needed to reduce investment risks. And Rusnano is not going to spend a penny on the purchase of molecules. Neither domestic nor Western.

– The Pharma 2020 strategy specifies how many specialists are needed and how many teachers are needed to train them, including professors with experience in Western pharmaceutical companies. And who and where will prepare them?Valery Danilenko, Head of the Department of the N.I. Vavilov Institute of General Genetics of the Russian Academy of Sciences:

– The issue is being solved.

For example, a number of faculties of Moscow State University: biological, chemical, biomedical. Some institutes of the Russian Academy of Sciences have educational and scientific centers for training specialists in the field of genetic biotechnology, medical chemistry. So, our Institute of General Genetics named after N.I. Vavilov has a joint educational and research center with the Department of Genetics of Moscow State University. There is a similar center at the Institute of Organic Chemistry named after N.D. Zelinsky.

– Probably, there should be an order for shots. And who will post it? This is not spelled out in the strategy at all. Will it be born out of thin air?– In fact, there is an instruction from the government to the Ministry of Education and Science, money has been allocated, and the process is underway.

How this is done is another question...

– But the strategy is just a departmental document approved by the order of Minister Khristenko. What instructions can follow from this to Minister Fursenko? It seems that we are lulling ourselves to sleep...Anatoly Miroshnikov, Chairman of the Pushchinsky Scientific Center, Academician of the Russian Academy of Sciences:

– We have a department of physico-chemical Biology at the Institute of Bioorganic Chemistry in Moscow.

And there is no need to explain what phys tech is in this audience. So, recently I was informed that the "phys techs" do not want to do our theses. Smart and very energetic guys, they are already in their fourth year, have "scored" places for themselves – in banks, in the administration of the region, the city. And we, they say, have too big requirements for a diploma – they would have something simpler, on the job. I mean, it is very difficult to ensure the influx of young scientific personnel into our field. I have been assembling my team for years, now there are 36 people working in it. And this is really a piece product. We started looking after the guys in the second year – at the Institute of Fine Chemical Technologies, at Mendeleevsky and, of course, at Moscow State University – at the chemical faculty and biofac. We take thirty people to our graduate school. But even those who finish it are not easy to keep with us.

– Still the same problem with housing?– Yes, salary and housing.

Recently, President Dmitry Medvedev visited the Academy of Sciences, and a serious conversation started about this. With the money that was promised and soon allocated to the Pushchina Scientific Center, we bought 50 apartments on New Year's Eve.

– Even so? Congratulations! Invite me to a housewarming party.Viktor Dmitriev, General Director of the Association of Russian Pharmaceutical Manufacturers:

– We also feel the shortage of personnel.

I won't talk about biotechnologists, but there is a shortage of technologists for production. And when faced with the fact that students study GMP requirements by pictures, they realized that it was necessary to organize joint internships. We agreed with the Association of Medical and Pharmaceutical Universities and began to accept children during the summer holidays for real production. After such practice, graduates make a more conscious choice. But there are circumstances that are beyond our control. The footage leaks if there are food or oil companies nearby – they pour beer or make gasoline. With the current salary ratio between them and us, we are uncompetitive.

Alexander Ginzburg:

– To complete the picture, I can add about the housing situation at the Russian Academy of Medical Sciences. I've been a vice president for three years and I've been in charge of something like a housing commission for three years. So, six million rubles are allocated for 70 of our institutes per year. These are three or four apartments. For all our graduates, postgraduates, and young scientists – in Moscow, Novosibirsk, Tomsk, and the Far East. Once a year, at the commission, which includes 10-15 directors of our research institutes, we share these three or four apartments. And Sergey Ivanovich Kolesnikov, as a deputy, a member of the presidium of the Academy and a member of our commission, has the dubious pleasure of listening to my brilliant speech...

Sergey Kolesnikov:– Russian President Dmitry Medvedev absolutely rightly stated at a meeting at the Russian Academy of Sciences that a serious housing program for scientists is needed.

After all, they could do it for the military!

Alexander Ginzburg:– Until this problem is solved, all the others, in my opinion, are secondary.

Portal "Eternal youth" http://vechnayamolodost.ru26.01.2010