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Russia plans protectionist measures against foreign drug makers

Russia has started to concoct a concept to defend domestic pharmaceutical companies from “unscrupulous" Western rivals, Russian daily Kommersant has reported. KBC Securities said the new pharma strategy could negatively influence those generic drug makers in Central and Eastern Europe that do not operate Russian manufacturing units like Zentiva and Krka, but would be neutral or even positive for Hungary's Richter and Egis.

The chemical technology and bioengineering department of the Russian Ministry of Industry and Energy has begun to develop a new development strategy for the Russian pharmaceutical industry that will help protect the players from “unscrupulous" Western competitors, Kommersant said.

The authors of the idea claim that local drug makers undergo rigorous registration and testing procedures, while foreign manufactures operating in Russia do not.

Another measure under discussion, according to one of the drafters of the document, is forcing foreign pharmaceuticals producers operating in Russia to form a Russian legal entity.

“[...] Western products are licensed and inspected in their countries of origin, where requirements for those procedures are much stricter than in Russia. In addition, there is simply no pool of inspectors in Russia with the necessary qualifications," Kommersant cited Svetlana Zavidova, executive director of the Association of Organization for Clinical Research, as saying.

According to a Russian market research agency RMBC, foreign drug makers accounted for 78% of the market in pharmacies and 67% in hospitals in monetary terms, and their participation was 92% in the DLO program in January-September 2007.

“We see the news could have negative impact on those CEE generic drug makers who do not have Russian drug manufacturing factories like Zentiva and Krka," Barbara János at KBC Securities has commented on Wednesday.


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