Generics Bring Vital Treatment to the Healthcare Market

Ranbaxy helped popularize generic alternatives on the Russian market. Aman Khanna, Country Head, Russia, Ranbaxy, told Mark Gay about his strategy.


Ranbaxy

Aman Khanna

Ranbaxy has long experience in the Russian market. How has the generics segment developed?

Ranbaxy has a long term commitment to the Russian healthcare segment and late last year we marked 20 years of successful operation in Russia. When Ranbaxy entered the Russian market in 1993 there was minimal understanding of the generics concept amongst most Russian physicians and pharmacists. It was a time when the Soviet system of pharma distribution had a very limited number of governmental channels and it had collapsed with no alternative system available. Retail and hospital pharmacies did not have a structured source of information, nobody could answer the questions like, "Why do both products have the same active ingredient and yet one costs five times more than the other?".

For example, Ciprofloxacin as an antibiotic worked  miracles in cases of severe hospital infections and a lot of patients in intensive care units required this medicine. The innovator product was twice as  expensive compared to Ranbaxy's Cifran. But since many pharmacies at that time did not have much understanding about generics, they used to buy the innovator antibiotic product which led to only a few patients getting the proper treatment due to limited resources. This situation resulted in Russian doctors making an effort to understand the concept of generics.

Through that experience doctors also learnt that not all generics had the same qualities and they could differentiate between generics. Today we find that almost every medicinal product in Russia has several generic versions and these are widely being used.

The compound annual growth rate of the generic market has been around 9 per cent during the past three years which is almost in line with the pharma segment growth. Over many years Ranbaxy's generics medicines have established and proved themselves. Today, healthcare professionals view Ranbaxy's products as dependable quality generics.

We are very proud to be contributing to the healthcare segment of Russia. We are confident that the policy makers in Russia will also continue to encourage quality generics which in turn will make the products affordable and accessible to patients.

The Russian government has set targets to produce more drugs within Russia and to substitute imports. How does this affect Ranbaxy's activities?

As the pharmaceutical industry's sales already stand at a little over $20 billion and the government plans to steeply increase the number of patients to be treated under the medicine insurance scheme, it is fair for the Russian government to look at lower dependence on imports. The Russian Federation currently is encouraging local production by giving pricing preference on tenders to local manufacturers. As Ranbaxy's participation in tenders at the moment  is very low, in the short term, it does not affect us. However, Ranbaxy has already started the process of manufacturing its products through signing contracts with local companies. At the same time, we are open to exploring any feasible and attractive local investment opportunities in manufacturing.

Which types of drugs are best suited to production as generics, over-the-counter drugs or those for serious illness?

The Ministry of Health has already issued the Essential Drug List (EDL). As the name suggests, these are essential to the health of the citizens and therefore, these products should have priority in local production. Most of the EDL consists of medicines to treat chronic illnesses in areas of cardiology, diabetes and so on.

How much of the Russian generics market is imported  and how much is produced locally. Is this changing?

In 2008, local generics manufacturers produced about 87 billion units, or 40 per cent of total volume. By 2013 this had risen to about 54 per cent in volume terms,  which is a substantial increase in local production. This production is largely catering to the government sector.

The Russian government is making more drugs subject to prescription. Will this slow the growth of the Russian drugs market?

Encouraging prescriptions for prescription products is not wrong and this is practiced in most countries with a regulated healthcare system. However, as this has not been the practice in Russia for many years, the government will need to ensure that there is sufficient legal support provided to doctors who are currently worried about legal implications. As more patients visit doctors to get prescriptions there will need to be enough doctors in place. At the same time, globally, there is encouragement for safer medicines to move from the Rx category to OTC. This reduces healthcare costs substantially for the governments and empowers the patients in case of an urgent need.

How is Ranbaxy expanding its activities in Russia? Can you give examples of R&D, new plants and so on?

As stated earlier, Ranbaxy through its 20 year presence in Russian Federation has played a key role in offering quality generics in Russia. Doctors appreciate Ranbaxy's efforts to ensure that their patients can easily buy affordable quality products. We are constantly assisting the regions by educating the doctors and pharmacists on various health related subjects. Ranbaxy has also tied up with the Yaroslavl Government on educating healthcare professionals in the vital subject of pharmacovigilance.

In 2010, we expanded our presence with introduction of important chronic products through a new chronic team. For the past two years, we have participated in Government auctions of antiretroviral  products (ARV) and have managed to supply ARV products at less than half the price prevailing three years ago. This will enable the Government to expand its treatment program to a greater number of needy HIV patients and this has already helped arrest the increased incidence of this deadly disease.

Ranbaxy has also tied up with a local manufacturing partner to produce these products. We hope to continue our collaborations and through our global experience, make valuable contributions to the healthcare sector in Russia.


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