Foreign pharma faces tough choices in Russia

 01-Dec-15, Russia Beyond The Headlines 

When in May Prime Minister Dmitry Medvedev tasked the government with creating a program of import substitution in the field of pharmaceutical production, foreign companies were worried. Although Russia’s pharmaceutical market — currently worth $19 billion a year — is a fraction of that of the US, its loss would have been a blow to Western drug companies at a time of global economic crisis.

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However, the policy may not have such serious implications as as first appeared, at least in the short term. For one thing, the import substitution policies will only affect sales to public health organizations, primarily state-run hospitals and pharmacies. Private health clinics and pharmacies are still able to import foreign drugs without restrictions.

Import substitution could actually be beneficial for foreign firms that already have a manufacturing presence in Russia and are working with Russian partners.

Nevertheless, there is still cause for concern here. Today, 60 percent of the drugs on the List of Vital and Essential Medicines approved by Russian government bodies for use in public institutions are produced domestically. Under the new policy, this share should increase to 90 percent by 2018.

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