Big pharma reacts to Putin’s warning by increasing Russian manufacturing

By Alexandria Pešić

- Last updated on GMT

Related tags Pharmacology Glaxosmithkline Pharmaceutical industry

Big pharma reacts to Putin’s warning by increasing Russian manufacturing
GSK and Teva will invest in Russian drug manufacturing in response to PM Vladimir Putin’s warning that Pharmas will face restrictions if they fail to boost local production and transfer technology.

Last month the Russian government unveiled plans to invest RUB120bn ($3.8bn) to expand the pharmaceutical manufacturing sector, which Putin sees as a priority sector for increasing the county’s industrial strength.

In a statement on the government’s website, Putin made clear he wanted pharma firms to play a part in this and move production to Russia, warning that: “There will be restrictions for [global drug companies] in the Russian market if they do not launch production and transfer technology.”

In reaction several pharma giants, which already have facilities in Russia, have announced plans to ramp up manufacturing in the country and earn the status of local producers.

Teva plans $100m investment

Teva Pharmaceuticals is one big players in the Russian drug production field, claiming it has “an extensive product portfolio in Russia”​ that ranks it among the top 10 pharmaceutical companies in the country.

Tamara Sušanj Šulentić, a Teva spokesperson told “Teva firmly intends to address the healthcare needs of Russia by providing affordable healthcare products and services.

“Having in mind the importance and the size of the Russian market, Teva is currently exploring different local supply options in order to meet the growing needs of patients and healthcare providers.”

Putin, meanwhile, has accused international companies of exaggerating the health benefits of their imported drugs, claiming: “foreign producers - with the help of some of our celebrities - are pushing their products, saying that without them everyone will die. We just need to get over it.”

Šulentić said Israel’s Teva plans to invest up to $100m in a Russian drug production plant as part of its strategy to triple sales in the country by 2015.

She maintained that additional investments “will enable it to provide a higher quality support to the Russian healthcare system and thus meet the growing needs of Russian patients.”

GSK joined Russian Binnopharm in vax manufacturing deal

UK-drug major, GlaxoSmithKline (GSK), has also plunged cash into the fast-growing emerging market.

This year the drugmaker struck a deal with Moscow-based vax firm, Binnopharm, which will make and sell GSK’s cervical cancer, rotavirus and pneumococcal vaccines for Russia.

Knowing that the Russian government favours local partnerships and aims to boost domestic pharma’s portion of the market by 30 per cent, GSK said it expects the local manufacture of these vaccines to “help Russia to modernise its National Immunisation Calendar in the future.”

Vince Cable, UK Secretary of State for Business, Innovation and Skills commented positively on GSk’s Russian partnership, stating: Not only does this demonstrate trust between companies sharing their knowledge across borders, but ordinary people will see the benefits.

F&S research analyst, Dominika Grzywinska, agreed that “Companies which decide to establish production facilities in Russia can count on government support and preferential treatment.

Nevertheless,” ​she added,​“companies need to closely observe the changes to assess their impact on potential growth opportunities,”

Other drug majors planning to break into the Russian drug manufacturing industry include Novo Nordisk, Sanofi-Aventis, AstraZeneca, Novartis, Pfizer and Nycomed.

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