Creating a New Industrial Culture

Investments by Russian and foreign partnerships are reshaping the industry, according to Vladimir Shipkov, Executive Director of the Association of International Pharmaceutical Manufacturers. He spoke to Vladimir Kozlov.


Vladimir Shipkov

What are the main challenges and issues for the industry?

These are primarily linked to the overall unpredictable situation in the market. I'm not talking about macroeconomic conditions, although they are also having an impact. I'm mostly referring to the regulatory environment. Currently, the State Duma is considering amendments to the law "On The Circulation of Pharmaceuticals." The way the law will look with these amendments will affect not only individual companies in the industry, but the entire pharmaceutical sector and the needs of those Russians who consume medicines.

Is it fair to talk about the Russian pharma market as mainly a generics market?

Unfortunately, we have to describe the market like that, in spite of the international pharma industry's efforts and its readiness to supply more innovative products, and in spite of investment in development partnerships which transfer cutting-edge technology, train personnel training and so on.

Meanwhile, local companies are mostly focusing on generics, and only a handful of pioneers in the Russian pharma industry are setting for themselves the very ambitious goal of creating and promoting original, contemporary products. This last trend deserves respect and support, and over the last few years it has been developing with the active participation of our association member companies.

Certainly, there have been positive changes in the share between generics and brands. Government initiatives have an influence, for example the extra medicine supply program and the Seven High-Cost Nosologies Program. As many medicines supplied under these programs were original brands, they allowed Russian doctors to experience the difference between these two groups of pharmaceuticals. As for specific figures of market share, I can't give it at the moment.

How is Russia proceeding with harmonizing its Good Manufacturing Practice (GMP) rules with other countries? Are there significant differences?

Here, the situation is ambivalent. On the one hand, the law stipulates that norms for ensuring quality control of pharmaceuticals were introduced as of January 1st, 2014. These norms were based on European requirements, which was a big achievement, to which our association contributed. And here we share the approach of the 'healthy' part of the Russian pharma industry. We also applaud the industry and trade ministry, which eventually made a decision in favor of the maximum harmonization with international approaches. However, when it comes to the observance of these norms, we have serious concerns.

We do not see any specific steps toward observing those requirements by Russian and foreign pharma companies operating in the market. In practice, we have a situation in which, as of January 1st, Good Manufacturing Practice (GMP) was introduced, so all Russian companies are in compliance, unless the contrary is proven.

But there isn't anyone to prove it, as there is no agency that is qualified, experienced and empowered. Likewise the situation with licenses for the manufacture of pharmaceuticals: they are indefinite and there are no strict requirements with regards to regular inspections of manufacturing entities. In practice, official agencies only have enough capacity to inspect several dozen manufacturers, and they are unwilling to do so. So, de jure, there is a pretense that all manufacturers are in compliance, but de facto, we understand that it is not so.

Of course, that corrupts the market, especially when it comes to government purchases without GMP compliance. These are two very different things: a product manufactured with observance of GMP and without it. Unfortunately, price often determines the arrival of a medicine on the market.

Despite the talk about innovation, is it important for Russia to be a developer of drugs or is it more important to make it efficient in terms of the distribution and pricing of drugs?

For Russia, all three tasks are important. Focusing only on one of them would be inherently wrong. If we are quite frank here, focusing on the development of original drugs is a very risky enterprise for any pharma industry and the Russian pharma industry is no exception. This is a long-term, expensive project, which is also risky and unpredictable. What is necessary is to move in all these directions, plus, probably some other ones in the form of partnerships with leading international pharma companies.

I would link the success of the Russian pharma industry mostly to international partnerships, and the creation of attractive conditions for investment and research. As a result of research, it would be possible to develop new drugs with Russian roots, and synergy would help to speed up the process of their launch in the market. At the same time, there is a need to modernize the entire industry, bringing it up to international standards. Only then will success in the various sectors of the pharma industry be possible.

How do you see the Russian pharma market in 10 years from now?

I dare say that in 10 year from now, the Russian pharma industry will have a totally new quality, a new outlook and new capabilities. Products manufactured on Russian territory will be much more competitive in global markets. That assurance stems from the fact that over the past few years, member companies of our association have invested over $2 billion in forming new plants that meet the highest global requirements. We invest a lot in the transfer of technology, including manufacture of original drugs protected by patents. We conduct research, train personnel and create jobs for highly qualified specialists. We are introducing a new culture and new approaches. In 10 years, this will be a totally competitive industry.

Pharmaceutical Business & Health Care 2014
Pharmaceutical Business & Health Care 2014
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