Development of Pharmaceutical Market in Russia: Yesterday, Today, and Tomorrow. 20 years for better health and life in Russia.

Representatives of international pharmaceutical industry shared their vision towards the solutions of key problems of the Russian pharmaceutical market and discussed the most important priorities for its further development.

June 17, 2014, St. Petersburg — As part of the 20th Russian Pharmaceutical Forum, the Association of International Pharmaceutical Manufacturers (AIPM), which is also celebrating its 20th anniversary this year, has initiated a discussion of the most pressing issues for today's pharmaceutical market, including the prospects for development of healthcarein the Russian Federation, increasing the innovative potential of local pharmaceutical industry, improving the regulatory system, building a modern drug provision system, etc.

The experts who attended the press briefing were unanimous in their view towards the history and current state of the Russian pharmaceutical market – the last 20 years have been marked by a real breakthrough. Above all, the rapid development of the pharmaceutical market in Russia resulted in the availability of sophisticated innovative therapeutic solutions to Russian people and substantial expansion in the range of the most modern, effective, high-quality and safe medical products. The most significant contribution to this has been provided by international pharmaceutical companies which, in addition, are investing tremendous funds in the localization of production, creation of new and modernization of existing pharmaceutical enterprises, launch of licensing projects, transfer of technology and know-how, joint scientific research, international clinical trials, etc.

The joint activities of the international pharmaceutical industry are entirely aimed at achieving the ambitious goals of the Russian healthcare system to improve health and life in Russia.

"In its history, the Russian pharmaceutical industry went through the different stages of development. Today, without any doubt, Russia has a great potential in development of the pharmaceutical industry both in terms of ensuring the access of patients to modern effective medicines and in terms of economic impact associated with new investments and development of high technology.

As the representatives of international pharmaceutical industry, we share and support in every possible way the objectives aimed at improving efficiency of the Russian healthcare system through development of its pharmaceutical industry, patients' access to innovative medical products and transforming Russia into one of the international leaders in the area of pharmaceutical innovation.

We are consistently acting as a constructive partner in the implementation of goals and targets set by the Russian Government in this area. This is evidenced by our large-scale study on additional measures to support the implementation of government programs of the Russian Federation aimed at the development of healthcare and pharmaceutical industry," said Naira Adamyan, Managing Director, Pharma Division, Johnson & Johnson LLC, Chairman of the Board of Directors, AIPM.

"For the pharmaceutical industry, guaranteeing the intellectual property rights, including the protection of data obtained during preclinical and clinical studies, is critically important. Given the contribution made by the industry to the research and development of new molecules, strict adherence to the rules of patent protection (among other things) is a critical measure, without which no further development of medical and pharmaceutical industry could be possible.

In this regard, it is important to ensure the compliance with the international obligations assumed by the Russian Federation as part of its accession to WTO, and the applicable laws, as well as to create in the future a differentiated approach for biological and orphan drugs," said Ivan Blanarik, General Director, Boehringer Ingelheim, Deputy Chairman of the Board of Directors, AIPM.

"The existing model of drug provision in Russia (ONLS - Essential Drug Coverage Program, etc.) is one of the possible options to provide the guaranteed drug availability to those eligible for benefits. It can be criticized or accepted, but the most important thing is that it exists. This model is required by the population and there is an understanding shared by the Russian Government that it should further evolve.

I hope that we will still come to a new model, which will be characterized by full transparency, clearly defined pricing rules, etc. The companies will be able to negotiate with public procurement authorities on a price that will guarantee the supplies of a defined volume within 2-3 years. For the public, the new model based on drug insurance will mean the higher availability of treatment options. Therefore, the market should become larger, commitment of patients to treatment will be better, and the availability of innovative medicines for the public will become higher," said Marina Veldanova, General Director of Ipsen Pharma in Russia.

"Russian patients deserve to receive a world-class medical care. The task of the Russian state is to ensure the availability of high-quality and modern medical products. Only compliance of the production with GMP standards can guarantee the high-quality of products," said Danil Blinov, General Director of Pfizer in Russia. In his comments on the current state of the clinical trials market in Russia, he also noted: "In the Russian Federation, we need to create a favorable environment for holding the clinical trials of medical products, in particular, through the implementation of the requirements based on recognized international practices. This, in turn, will stimulate the development of the pharmaceutical industry and the Russian healthcare system in general."

"Summing up the past 20 years, we can say that our pharmaceutical market has grown by 5 times in terms of its size and exceeds 20 billion US dollars in consumer prices. The range of products available in the market has also expanded by 1.4 times in terms of product mix and by 3.5 times for the number of packages.

If we use the marketing approach to define the life cycle stages of a medical product and try to determine the current stage in the development of the Russian pharmaceutical market, we will, most likely, find ourselves in a difficult position. On the one hand, there is a continued and significant growth (by the standards of developed markets). On the other hand, we reached a level with the evident signs of maturity.

The latter can be definitely said when we consider not only the size of the market and the level of consumption, the number of medicines available in the market, but also such "qualitative" indicators as the speed of launching the new medicines in our market, opportunities for their launch and success stories," said Nikolai Demidov, General Director, IMS Health Russia and CIS.

"I think that today the key to successful development of any economic sector is the effective interaction between the industry and the state represented by the government and the relevant regulatory authorities of various levels. The dialog within the government authorities is no less important. We have different experiences in this area. Let's take, for example, such document as the amendments to the Federal Law No. 61 "On drugs circulation", which defines the normal operation of the industry. The work on this document lasted for more than 18 months; the industry has seen no less than nine versions of amendments and provided its comments to each of them while strongly insisting on the need to consider the international practices. However, the situation has been only worsening from one version to another. I think that the general public is unanimous in that the latest version of the amendments to 61-FL, submitted by the Ministry of Healthcare to the Russian Government, has not been seen even by the representatives of patient, medical and scientific communities confronted daily with the real needs of Russian patients, let alone the pharmaceutical industry. And this is just one example indicating the lack of appropriate professional dialog.

However, we are not only keeping our faith in the high potential of the Russian pharmaceutical market, but we are also supporting it by our own activities. For example, over the past 3-4 years, the members of AIPM have invested more than 1.6 billion US dollars in various forms of localization in Russia, and this is not the limit. I am convinced that, in the end, the professionalism will prevail and we will witness a completely different, more civilized pharmaceutical market in Russia," said Vladimir Shipkov, Executive Director of AIPM.

Association of International Pharmaceutical Manufacturers (AIPM)

The Association was established in 1994. In the Russian Federation, AIPM represents the interests of leading international pharmaceutical manufacturers of modern, effective, safe, and high-quality medical products. Today, AIPM brings together more than 55 international companies, which account for over 80 % of global pharmaceutical production and more than 60 % of medicines supplied to the Russian Federation.

www.aipm.org

For more information, please contact:

Julia Oreshnikova,

 PR-manager at AIPM,

 tel .: +7 (495) 933 70 40 (ext. 109)

mob.: +7 (903) 241 79 81

e-mail: j.oreshnikova@aipm.org

Yana Zadorozhnaya,

 Nestline Agency,

tel.: +7(495)721-83-22

mob.: +7 (925) 127 93 09

e-mail: yzadorozhnaya@nestline.ru