The Russian pharmaceutical industry should prioritise the production of full-cycle products

The Russian market is one of the most promising and emerging markets, and its development did not stop even during the coronavirus pandemic. Gazeta.Ru talked to Denis Remenyako, General Director of pharmaceutical company FC Grand Capital, about what awaits the Russian pharmaceutical market and what technologies are currently used in the sphere of medical provision in Russia.


— Denis Vladimirovich, what changes have taken place in the pharmaceutical market in the last few years?

— There have been many changes, but most importantly, between 2010 and 2019, the Russian pharmaceutical market has gone from being a developing market to one of the most advanced. Much of this, of course, is due to international investment in the industry, which has amounted to several trillion roubles over the last ten years.

— Is it due to the fact that Western companies have started to build their pharmaceutical plants in Russia?

— Not just that. Certainly, the localisation of foreign production has helped the development of the domestic industry, but during this time Russian manufacturers have acquired technology, obtained personnel who have been trained to meet the latest requirements, and all this has resulted in domestic companies now competing with foreign giants. A trend of the last few years has been a greater loyalty to domestically produced products. People are no longer scared at all when they see the label "Made in Russia" on the packaging, they have no negative thoughts that there might be problems with the quality of the medicine.

I think this was due to an understanding of manufacturing standards - GMP - and the inevitability of their implementation. This is correct, because all manufacturers in Russia need to be monitored for compliance with good manufacturing practices. I would point out that the main trend today is: Russian product is nice!

— Coronavirus is a hot topic today, it is clear that it has significantly changed the environment for pharmaceutical companies around the world. And in the face of a pandemic, what has changed for domestic pharmaceutical manufacturers?

— During a pandemic, the main test for pharmaceutical companies was the rush for drugs, and it should be noted that domestic manufacturers were the most active in meeting this challenge. They were quick to respond to the challenges of an ever-changing environment - repeatedly increasing and continuing to increase the production of the medicines needed by the population. On the subject of import substitution, the situation with oseltamivir is a case in point - if there were no Russian manufacturer of oseltamivir, the country would be left virtually without this important medicine. Just one year ago, the Russian oseltamivir share was 10%; in 2020, it is 95%.

The fact that a large number of brands of antiviral medicines are produced in Russia has made it possible to rapidly increase their production and supply to healthcare institutions and pharmacies.

Another factor in the pandemic was the focus on the need to develop groundbreaking new products in Russia. Today, most countries around the world have made the pharmaceutical industry a priority sector and are encouraging greater investment in research on new molecules and the development of modern drugs, referred to as research and development (R&D) centres.

Russia's R&D expenditure, unfortunately, remains at an extremely low level - below the world average - comparable to that of South Africa, Brazil and Poland (0.99% of GDP and $287.7 per capita). But today the authorities understand how important these issues are, and I am sure that in the near future the situation will change, there is simply no other way out.

— Since you are talking about the future, what do you think needs to change in the pharmaceutical provision system?

— The first priority for the domestic pharmaceutical industry should be the production of a full-cycle drug, from substance development to the finished product. The second is, obviously, investment. The most expensive thing in a medicine is the active ingredient, i.e. the molecules. But since investment in innovation is a risk, it is always a venture, so, in fact, the key source is still the companies' internal resources, including those of the founders and parent companies.

For the further development of the pharmaceutical industry it is necessary to focus on the use of Russian substances, because as we have seen during the coronavirus epidemic some countries have banned the export of substances they produce - like India - or have raised prices, like China, thereby limiting exports.

In turn, the development of substance production must go hand in hand with the development of the chemical industry, because today in order to produce substances in Russia, manufacturers still have to turn to imports of ingredients to the same China and India where they are produced. This is due to the fact that domestic chemical companies are not interested in producing ingredients for pharmaceutical substances (intermediates), as the market is insufficient, i.e. there is no necessary volume of demand. At the same time, it is often the case that chemical companies may not actually be aware of the existing need for intermediates - this is where the Ministry of Industry and Trade has an important role to play, as it can forecast the needs of pharmaceutical companies for ingredients and help pharmaceutical manufacturers find chemical plants capable of producing the products in demand in the future.

I think that investing in the development and support of such companies, creating a clear market for domestic substances, and organising systematic demand will be a good contribution to the country's pharmaceutical industry and will certainly take it to a new level.

— Today, there are complaints about shortages of medicines in many regions of Russia. Some of the market players attribute their problems to the mandatory labelling of all medicines that started on 1 July. Do you share this position?

— Labelling has contributed to medicine shortages, but the situation has been greatly exacerbated by the onset of the second wave of the coronavirus and the fact that people have been buying medicines in advance.

The introduction of labelling has been planned for a long time and all market participants have been preparing for this event, as they realised that it is a technically complex process that will introduce serious adjustments in the work of all participants in the commodity supply chain.

After all, the date of 1 July was not chosen by chance. During the summer, after the spring rush, there is always a drop in demand for medicines, but no one could have imagined that the introduction of the system would coincide with such an overwhelming demand for medicines amidst a global coronavirus epidemic, or rather the second wave that has set in. The demand now is not rational but impulsive, people just sweep all the medicines off the shelves in one day.

The increased demand far exceeded last year's demand: shipments of the most popular products Nobasit, Arbidol, Klexan and Eliquis increased manifold compared to Q3 2019. This has triggered an increase in the flow of labelled products, although they still account for only 15% of all medicines.

Everyone understands that labelling is essential! But the quality control algorithms in the system, which was launched on 1 July, have, in my opinion, proved to be a heavy burden for the industry, which would have been crushed even without labelling. In other words, there is an overlap, and companies that have just learned to work with the new technology have had to deal with technical failures in the face of a critical increase in transaction volume. Therefore, in the current circumstances, it is now necessary to take swift action to free market players from unnecessary transactions as quickly as possible and to facilitate the movement of medicines through the supply chain so that, in the meantime, the technical difficulties that have arisen can be promptly resolved. The state has taken some steps to facilitate the circulation of medicines in the labelling system. I hope that it will continue to move in this direction in order to resolve the situation as soon as possible.

— And what do you think is the way out in this situation?

— In my opinion, the first thing that needs to be done today is to eliminate the shortage of medicines in pharmacies, so it would be logical to leave the need for data entry into the MMMP (monitoring the movement of medicinal products) system until 01.07.2021 only to the manufacturer until release by Roszdravnadzor. This procedure, while taking away the ability to see the location of each package of medicines as originally planned, will allow every consumer to verify through the Honest Mark app that the medicine they are buying is the one officially released and put into circulation.

And in 2021, revisit the issue of introducing a notification procedure for pharmacies that a medicine has been withdrawn from circulation after purchase. In this way, the system will be closed - inputs and outputs will be recorded, but so far without detailing the path of the medicine (its logistics from manufacturer to pharmacy) within the "manufacturer" and "pharmacy" endpoints.

— There are questions today about the need for labelling, do we need it?

— There is no doubt that medicines need to be labelled and put into circulation through the Roszdravnadzor system - this is clear. It is a powerful tool in the fight against counterfeiting, which is, without exaggeration, fatal for our industry.

In particular, it is something that will rid us of the counterfeiting and theft of medicines in the hospital segment with resale on the black market - everyone has heard of the outrageously violent cases where drugs that could never have been on sale as they were only supplied to specific health facilities were put on the market. These are human lives that could be saved, thanks to labelling, which would eradicate the very possibility that medicines a person is entitled to in hospital could be sold by unscrupulous people.

We must always remember that it is not labelling that is primary, but the ability of the person to receive the treatment prescribed to them. Therefore, all actions to implement the much-needed labelling in the marketplace must be calibrated and not be detrimental to patients in the first place.

Source: https://www.gazeta.ru/business/2020/11/13/13359235.shtml