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Biological Science and Biotechnology in Russia: Controlling Diseases and Enhancing Security
Further, this chapter first describes the Russian marketplace for drugs, vaccines, and test systems. It highlights the role of the Biopreparat complex, which was a focal point for Soviet defense-related activities, and the role of Biopreparat-affiliated institutions in cooperative U.S.-Russian nonproliferation research programs. After noting some of the key aspects of the evolving regulatory framework in Russia, it highlights the gap between research activities sponsored by the Russian government and commercial production activities. It then offers several suggestions for facilitating development of the biotechnology sector in Russia.
THE MARKET FOR MEDICAL PRODUCTS IN RUSSIA
Medical Products for Humans
According to Russian estimates,1 the market in Russia for drugs intended for human consumption (valued at the point of use) rose from $2.5 billion in 1999 to $3.7 billion in 2002, with a projection of $5.0 billion in 2005. This growth has been attributed largely to higher consumer earnings. About 60 percent of the costs were carried by consumers. Various state organizations covered the remaining 40 percent. About 70 percent of drugs were distributed by prescription and 30 percent were over-the-counter items. Approximately 70 percent of drugs (by cost) were imported. This figure reflects the emphasis of Russian producers on cheap generics while expensive specialty drugs largely come from abroad. Among the principal obstacles to the further development of markets in Russia—both for foreign and domestic manufacturers—are a lack of transparency in the registration, certification, and licensing systems; inadequacies in the protection of intellectual property; and the large quantity of counterfeit medicines.
Of the top 20 producers of drugs in Russia in 2002,2 only two companies were Russian-owned: Akrikhin (also known as Otechestvennoe Lekarstvo) and Marbiofarm, the Russian branch of Valeant Pharmaceuticals International (formerly ICN Pharmaceuticals). Other Russian producers were Firma Bryntsalov and Moskhimfarmpreparaty. As for imports, the market has become less concentrated, with the total market share of the top five importing companies decreasing from 25 percent in 2001 to 19 percent in 2002 (Maksimova, 2003).
This discussion is based on estimates contained in TEMPO Noncommercial Partnership Center of Modern Medical Technology (2003). A report by the U.S. Embassy in Moscow has somewhat different estimates, although in a general sense the estimates and the trends are similar as noted in Maksimova, 2003.
These drug producers are, in descending order: Aventis, Gedeon Richter, KRKA D.D., Berline-Chemie/Menarini Pharma, Sanofi-Synthelabo, ICN–Russian Plants, GSK, Novartis, Servier, Pliva, Nycomed, Lek D.D., Bristol-Myers Squibb, Dr. Reddy’s, Pfizer, Janssen-Cilag, Egis, Akrikhin, Balkanpharma, and Boehringer Ingelheim (TEMPO Noncommercial Partnership Center of Modern Medical Technology, 2003).