June 18, 2012 06:08 ET

Foreign Companies Increased Their Presence in the Russian Pharmaceutical Market

ROCKVILLE, MD--(Marketwire - Jun 18, 2012) - has announced the addition of the new report "The Pharmaceutical Market: Russia," to their collection of Pharmaceuticals market reports. For more information, visit

The Ministry of Industry & Energy has been involved in developing a strategy for encouraging growth in the local pharmaceutical industry for the period of up to 2020. The plan envisages the government helping local producers to cover the costs of the R&D required to boost production of innovative pharmaceuticals. It also hopes to create new companies that will be able to attract investment, create new jobs and produce competitive products that fulfill the requirements of patients and the healthcare system. If the objectives of the plan are realised, the local industry will be responsible for 50% of drugs in circulation in the Russian pharmaceutical market by 2020, 80% of which will be innovative. Exports of pharmaceuticals will also be eight times larger.

Foreign companies increased their presence in the Russian pharmaceutical market in 2011. In September 2011, Russian Corporation of Nanotechnologies (Rusnano), Russia's government investment company, entered into an agreement to provide funding for Cleveland BioLabs' new subsidiary, Panacela Labs, which will develop a portfolio of new preclinical drug candidates in Russia. In the same month, Pro Bono Bio (PBB) was launched as a new international pharmaceutical company that is the result of a three-year Anglo/Russian project, developed by Celtic Pharma Holdings. In June 2011, Pfizer and ChemRar High Technology Centre signed a memorandum of understanding (MoU) to explore a collaboration focused on the research, development and commercialisation of innovative drugs in Russia and other countries. In June 2011, Novartis announced the start of construction of a pharmaceutical manufacturing plant in St Petersburg. The facility is expected to be completed by 2014. In April 2011, AstraZeneca began construction of a new US$150 million manufacturing facility in the Kaluga region to supply Russia with innovative medicines that are locally-manufactured. The company also plans to establish a Predictive Science Centre in St Petersburg in 2012.

The market is dominated by generic products. Over the last decade, there has been a shift in demand from cheap locally produced generics to more expensive branded generics of foreign origin. Generics may eventually lose market share to branded pharmaceuticals if the government's plan to vastly increase the number of locally manufactured innovative drugs is successful. Generic pharmaceuticals account for the bulk of local production; original drugs are manufactured in negligible quantities. The generic industry is highly competitive as the same drugs can be manufactured by five to seven different companies. Imported generics, from countries such as Hungary, Slovenia or Germany, are commonly used. Gedeon Richter, KRKA and STADA-CIS are major suppliers. In 2011, major competitive strategies included a joint-venture between Aurobindo and Diod; Teva's agreement for the construction of a manufacturing plant; and an MoU between Ranbaxy and the Government of Yaroslavl.

For more information, visit

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