State Pill

Vladimir Putin has set difficult tasks for the Russian pharmaceutical industry

The growing interest of the Russian authorities in the pharmaceutical market, one of the least affected by the crisis and a sector of the economy generously financed by the state within the framework of public procurement, is becoming more and more obvious. If previously the problems of the pharmaceutical community were of interest primarily to its business participants and were only occasionally discussed somewhere at the level of relevant ministries, then Prime Minister Vladimir Putin’s keynote speech last Friday showed that pharma is now a state matter. And all issues in the industry must be resolved at least at the government level.

It is immediately worth noting that at the meeting “On the strategy for the development of the pharmaceutical industry”, held in Zelenograd with the participation of the head of the Cabinet of Ministers, absolutely nothing new was said. All the topics raised in Mr. Putin's speech have been discussed at various levels for at least five years. The real sensation was precisely the fact that a critical mass of dissatisfaction with the order established in the market was still able to spill out to a higher level - to reach the head of the government. Which, according to representatives of the pharmaceutical community, is in itself a sign signaling that statesmen have finally gotten their hands on the relatively small (compared to oil or gas) drug market. And the specifics are not that important.

Nevertheless, in his speech, Vladimir Putin spoke about the most pressing problems of the industry. For example, he demanded, starting in 2011, to stop government procurement of drugs produced without complying with the standards of the so-called good manufacturing practice - GMP (Good Manufacturing Practice). This is a unified drug safety system recognized throughout the world. Although different countries use different GMP protocols, in any case they regulate all stages of production - from loading raw materials to waste disposal.

The head of government spoke about the transition to GMP as a problem that was well known to him: “We understand that a sudden transition will simply throw our enterprises out of the market overnight, but it is also impossible to remain in the state we are in today forever.” Indeed, back in 2003, after a meeting with the heads of processing industry enterprises, among whom were leaders of the pharmaceutical industry, Mr. Putin, then president, gave instructions “to ensure the transition to a system of international standards for the production of medicines from January 1, 2005 ( GMP)". And he appointed Boris Aleshin, Ilya Klebanov and Yuri Shevchenko responsible for the implementation. “I personally attended this meeting six years ago, and even then they were talking about a speedy transition to GMP. It’s sad to see that over the past years the state has only managed to lose valuable personnel who were ready to implement this standard,” Andrei Mladentsev, chairman of the board of directors of the logistics company Farmat, who recently served as deputy head of the Federal Service for supervision in the field of healthcare and social development, and previously headed the large production of Nizhpharm. Over the years it took to carry out Vladimir Putin's orders, the problem became more complex, Mr. Mladentsev said. “It is unfortunate that until 2011 the health of patients will be exposed to unnecessary risks due to government procurement of drugs produced under uncontrolled conditions,” he said.

In Zelenograd, Prime Minister Putin gave the heads of departments a new instruction. He suggested considering the possibility of allocating 700 million rubles from the budget. as a subsidy for interest rates on loans for technical re-equipment of domestic pharmaceutical enterprises. This measure will allow even those companies to receive loans that, under normal conditions, could only receive loans at maximum interest rates, as they are not the most reliable borrowers. According to experts, such subsidies could attract multibillion-dollar funds into the industry.

But to solve the problem of enterprises supplying medicines for government programs, not much money is needed. “Optimization of that part of the Russian pharmaceutical industry that produces drugs included in government procurement may well cost 1 billion rubles,” David Melik-Guseinov, director of marketing research at Pharmexpert, told Vremya Novostei. In his opinion, the industry should be grateful to Mr. Putin for updating the topic of transition to GMP, which has been somewhat forgotten in recent months. “The vast majority of production facilities that are fully or partially state-owned cannot be certified according to GMP, at least within the walls in which they are currently located. They need new buildings, new territories,” the expert recalled the problems.

The second major task set by Vladimir Putin for the domestic pharmaceutical industry, as it may seem, contradicts the first: the head of government demanded an increase in the share of Russian products in the market in general and in government procurement in particular. But the introduction of mandatory GMP, as can be assumed, at least at first, will, on the contrary, reduce the share of Russian production, throwing out all outdated enterprises from government programs. “It is necessary to ensure that in the next two to three years the share of domestic drugs purchased from budget funds is at least half in value terms,” said Vladimir Putin. “I’m afraid that it will be problematic to solve two such large-scale problems at the same time,” says Yuri Krestinsky, director of the Institute of Public Health Problems. In his opinion, it is quite possible to switch to GMP by 2011, and this will not require any additional investments from the state. But it is realistic to bring the share of high-quality domestic products to 50% in value terms only by 2015. “If we talk about the production of generics, then nothing prevents us from increasing their share of money in state programs to 60%,” believes Mr. Krestinsky. But the problem, he is sure, is not so much that there are no Russian drugs, but that the conditions of procurement auctions are drawn up in such a way that Russian products simply cannot participate in them. The corruption of officials and top medical bosses causes much more damage to both the pharmaceutical industry and patients than the medical representatives also mentioned by the prime minister, who bribe ordinary doctors with branded pens and foreign trips.

Galina PAPERNAYA