Putin To Pharma: Do Business In Russia, Or Else
3 CommentsBy Ed Silverman // January 26th, 2011 // 9:10 am
For the past year, several big drugmakers have been embracing Russia as one of the next emerging markets in which to invest. Sanofi-Aventis, AstraZeneca, GlaxoSmithKline, Novartis, Novo Nordisk, Nycomed, Pfizer and Servier, among others, have previously announced intentions or are possible plans to establish or expand manufacturing facilities there (back story).
But apparently few are moving fast enough for Prime Minister Vladimir Putin, who issued what amounts to a warning on the Russian government website to drugmakers that do not help expand the domestic market: “There will be restrictions for (global drugmakers) in the Russian market if they do not launch production and transfer technology,” according to In-Pharma Technologist.
Then, sounding a little bit like a watchdog from a consumer advocacy group in the US, the former spy proceeded to chastise foreign drugmakers for the way their medicines are marketed to Russian consumers. “Foreign producers, with the help of some of our celebrities, are pushing their products, saying that without them everyone will die. We just need to get over it.” Of course, his objection can be interpreted in different ways - foreign drugmakers may successfully use this approach to capture market share from domestic producers.
This is not the first time that Vlad has taken a keen interest in the pharmaceutical sector, which Russian officials hope will see market share held by domestic producers jump from around 20 percent last year to 50 percent by 2012. Last year, he sacked a senior health official for publicly criticizing a draft law introducing state regulation of pharmaceutical pricing (see this) and visited pharmacies to do a spot check on pricing (read here).
Of course, Russia is a big market - lots of patients provide fodder for both clinical trials and sales. And so it is no surprise that pharma regularly eyes the country for opportunities. That is unlikely to end. But perhaps Vlad may want to consider that his homeland makes some people think twice because it is perceived as corrupt. A recent ranking by Transparency International found that Russia yielded just 2.1 on a scale of 1 to 10 in which 10 is considerd a ‘highly clean’ nation (see here). There are many ways to offer economic incentives. Creating a climate in which threats and bribes are considered business as usual, however, is not recommended.
Lacerta Bio
We have also been monitoring this situation in Russia. Further, we think other countries, such as Brazil and India, may follow suit and use government policy to help boost local pharma industry.
Christiane Truelove
Mr. Putin, in referring to technology transfers, may be thinking of HIV drugs. The Siberian region of Irkutsk is being ravaged by and AIDS epidemic, spread by drug use and unsafe sex.
Take a look at this presentation about infection rates in children and adolescents in Irkutsk.
http://www.youtube.com/watch?v=rMfvS3-zXCA
Very grim statistics.
Salient point
This seems like classic Russia. They just passed a disarmament treaty, which may seem accommodationist to some, so Putin turns around & disparages the foreign drug industry to try to rebalance the scales. There may be little of substance to this.