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30.07.2010

Teva Pharm plans Russia plant

Israel's Teva Pharmaceutical Industries plans to invest up to $100 million in a drug production plant in Russia as it aims to more than triple Russian sales by 2015, a Russian executive told Reuters.

Alexander Bykov, Teva's Russian market access director, said in an interview the company aimed to finish building the plant by 2014 as the Russian government moves to boost its domestic pharma industry.

Global drugmakers are increasingly looking to boost exposure to fast-growing emerging markets as western sales slow and many leading drugs lose patent protection.

"Teva has grand plans. Russia is one of our strategic markets so head office is making it a high priority. We plan to achieve annual sales (in Russia) of $1 billion by 2015," Bykov said.

The Russian government signalled last year it would give more benefits to local producers as it moves to improve healthcare and modernise the pharmaceutical sector, prompting many international drugmakers to explore the idea of establishing local manufacturing there.

"We are considering a greenfield project -- a site where we could establish production of Teva's key medications," Bykov said, adding Teva's blockbuster multiple sclerosis drug Copaxone will "definitely" feature in the plant's product portfolio.


DEEPER STAGE

Bykov said the plant will at first only package drugs, with production beginning at a later stage, but added that he still hoped the company would be classed as a local player in order to take advantage of state benefits.

"We think that until 2014 local packaging will be considered as local production. After 2014, I hope we will have a deeper stage of localisation," Bykov said.

Global drugmakers are set to pour over a billion dollars into Russian packaging, manufacturing and R&D facilities, according to the Association of International Pharmaceutical Manufacturers (AIPM), whose members -- including Teva -- account for 80 percent of all global drug sales.


SALES BOOST

Teva, the world's largest generic drugmaker, generated $280 million in Russian sales in 2009, implying a nearly 3 percent market share, and expects sales to exceed $340 million this year, Bykov said.

"Pharmaceutical consumption per capita in Russia is just $100 on average, and the share of budget spent on healthcare is much lower than in developed countries. But the financing has started to grow," he said.

He expects the Russian pharmaceutical market to grow to $30 billion by 2015 from around $15 billion now.

"Russia can make a breakthrough. Just like a man in a traffic jam -- if you are in the tail, you have more chances to bypass it.

Teva's overall sales stood at $14 billion in 2009 and are forecast to reach $31 billion over the next five years, helped by expansion of its global footprint.


Source:  Reuters

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