Innovative Development — a Choice to the Benefit of Patients

International pharmaceutical industry considers it necessary to maintain long-term strategic priorities of the state during implementation of the anti-crisis plan
 

May 20, 2015, St. Petersburg. Earlier this year, the Russian Government adopted a plan of priority measures to ensure the sustainable economic development and social stability. Among other things, the document identified such mechanisms for anti-crisis regulation of the pharmaceutical market as the implementation of long-term contracts, indexation in low and middle price segments for medicines in EDL, allocation of additional budgetary funds for the purchase of medicines in connection with the changes of the currency exchange rate.

As a reliable partner of the state, the international pharmaceutical industry shares the commitment to the plans of the Government of the Russian Federation and is fully aware of the need to implement the anti-crisis measures in order to preserve the guarantees of the drug provision to the public and stability amid the current macroeconomic environment. In our view, while implementing the planned initiatives, it is necessary to follow the long-term strategic programs focused on the innovative development path of the pharmaceutical industry and improving the quality of life and health of Russian people.

In this regard, as part of the largest annual Russian Pharmaceutical Forum, the Association of International Pharmaceutical Manufacturers (AIPM) initiated a discussion "How to avoid a potential drug crisis while maintaining the priorities of state strategic programs!" The participants in the event have expressed their vision of the most acute problems existing in the pharmaceutical market and offered solutions, the adoption of which would improve the situation with the drug provision to Russian people and, at the same time, would be consistent with long-term priorities of the state policy in healthcare.

The discussion began by considering the legal guarantees for right holders, a fundamental criterion of investment attractiveness. "Ensuring the reliable protection of intellectual property rights is a key factor in the development of innovative economy and an indispensable condition for attracting international investment to the country. Some recent initiatives, including the possibility of compulsory licensing and parallel import, if implemented, will seriously worsen the investment climate in Russia, jeopardize the country's potential in the area of research and development, and will have a negative impact on the availability of modern innovative medicines to the public. I hope that Russia will maintain its commitment to the principles of protecting the intellectual property rights and, along with it, the competitive advantage that it enjoyed until now compared to other BRICS," said Naira Adamyan, Managing Director of Janssen, Pharmaceutical Companies of Johnson & Johnson; General Director of LLC Johnson & Johnson; Chairman of AIPM Board of Directors.

There is no doubt that the availability of innovative products is provided, among other things, by establishing the effective and transparent procedures for preparing the lists of medical products serving as the basis for state procurement, and improving the approaches to pricing (for example, by concluding long-term contracts, introducing the risk minimization system, using weighted average prices). This is why the current methodology of setting limits for the selling prices on medical products included in EDL, as well as the currently proposed changes to it, are considered by the pharmaceutical community as an intermediate step on the path to the introduction of reimbursement mechanisms for the entire population of the Russian Federation.

"The proposed methodology is designed to solve the urgent tasks of drug provision in the short and medium term by increasing the availability of medicines and reducing the state spending through maximum lowering of prices in EDL. However, the comprehensive measures are required in order to implement the long-term objectives of the Strategy for the Development of Domestic Pharmaceutical Industry and Manufacturing Localization. In particular, the creation of effective drug provision system will contribute to achieving the goals of state healthcare programs, developing the Russian pharmaceutical industry and fulfilling the main objective of the sector, which is to ensure the access of patients to high-quality, modern and effective medical products,"said Danil Blinov, General Director of Pfizer in Russia; Vice-Chairman of AIPM Board of Directors.

"The current methodology of pricing for medical products included in EDL does not take into account the real increase in production costs, which is formed by the inflation and changes in the ruble exchange rate against the dollar over the past 6 years. The medicines of lower price segment, where the wholesale and retail mark-up is small, are rapidly "washed out" of the market. As a result of state regulation of prices, the availability of medical products for patients is declining. Moreover, the methodology is putting the obstacles for manufacturing localization, as it implies a separate registration for prices on local and imported medicines. As long as the State Register of Maximum Prices includes a large number of previously registered prices on medicines with uncontrolled production quality, the production of high-quality essential medicines in Russia will have a low economic practicability," said Dmitry Efimov, General Director of Nizhpharm; Senior Vice President of STADA AG in Russia, the CIS and South-Eastern Europe; Chairman of the Supervisory Board, the Association of Russian Pharmaceutical Manufacturers (ARPM). "Currently, as one of its anti-crisis measures, the Russian Government consideres the possibility of concluding long-term contracts on supply of medical products for state needs. The initiative on introducing the long-term contracts is an extremely important and timely measure, which is supported by the industry and leads to optimizing the budgetary expenditures on health care system without reducing the quality and amount of provided medical assistance," he added.

"Indeed, one of the most effective mechanisms of anti-crisis policy might be the introduction of long-term contracts. We believe that its use is justified for all products but, above all, for those that do not have analogues in the Russian pharmaceutical market. As for the period of performing the long-term contract, we consider that a three-year term will be optimal, given the specific aspects of forming the budget of the Russian Federation, as well as the established frequency of reviewing the medical product lists (ONLS – the Essential Drug Provision Program, "7 Nosologies").

In the current environment, defining the status of the local product is also an extremely necessary step. The industry is still waiting for a decision on that matter. However, in the important regulatory initiatives for 2014-2015, such as the methodology for developing the various lists, including EDL, new methodology for the manufacturer's price and the others, the localization often appears as a key factor. We understand and share the intention of the state to encourage the companies to deeper stages of localization. However, we are consistently advocating the diversified preferences depending on the degree of localization, without imposing any restrictions on the access of foreign manufacturers to the Russian market," said Marina Veldanova, Senior Vice President for Russia and CIS at Ipsen; Chair of the Committee on Health Policy, AIPM.

"The international pharmaceutical industry is one of the most science-driven sectors and, year over year, it holds a leading position in the world in terms of investments in R&D. As part of their social mission, the companies take responsibility for finding breakthrough solutions in the treatment of various diseases and bringing new medicines to the market. At the same time, the industry has the right to count on similar approach from the side of regulators who, in the process of developing and implementing the modern regulatory approaches, are also intended to promote the development of innovation and attracting additional investment to the industry, ensuring the maximum availability to the public of the most effective, high-quality and safe medical products," said at the conclusion of discussion Vladimir Shipkov, AIPM Executive Director.

Association of International Pharmaceutical Manufacturers (AIPM)

Established in 1994. The Association comprises 59 international pharmaceutical companies that provide over 80% of the world’s pharmaceutical products and over 60% of medicines imported to the Russian Federation.

www.aipm.org

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