Compared to the dynamic changes taking place in the global healthcare, pharma and biotechnology arena, collaborations between Russia and India in the pharma sector are on a low key. Hence according to industry experts, India and Russia must join hands in investing in research and development and innovation of medicines and medical devices to beat the disease burden of both the countries.
“As in defence, both countries must also collaborate in pharmaceutical and biotechnology manufacturing. In fact it is high time that India and Russia caught up with the world and re-energize their relations to build up a strong and everlasting partnership in the field of medical research, drug development and biotechnology,” aver industry expert.
Events like Convention on Pharmaceutical Ingredients (CPhI) are providing right platforms for government authorities, policy-makers and researchers to come together and focus on the contemporary issues faced by the pharma and biotechnology industry in both countries.
CPhI Russia 2015, which is being held in Moscow from April 27-29 is an apt meeting point for entrepreneurs from pharmaceutical and related segments to exhibit, discuss and network for exploring new avenues of trade between the two countries. This time CPhI Russia is co-located with the IPhEB conference.
The big event in Russia is expected to host a range of exhibitors in the field of pharma ingredients, finished dosage, machinery, equipment, technology and outsourcing. In fact the event is expected to give a unique opportunity to customers and visitors where they can initiate business and build partnerships in the booming Russian and CIS pharma markets.
The Russian pharma market
The Russian pharma market is at present at the forefront of emerging markets and is projected to reach a value of US $31.2 billion in 2019.
The Russian Government's ambitious Pharma 2020 plan, introduced in 2009, includes funding of nearly US$5 billion and seeks to dramatically increase domestic pharmaceutical manufacturing and R&D capabilities. As a result of the Pharma 2020 plan, there will be a dramatic rise in the demand for pharmaceutical ingredients and manufacturing and packaging equipment as the existing manufacturing sites are being upgraded to GMP standards.
Specific pharma goals of Russia by 2020 include increasing domestic finished-dosage manufacturing capacity, direct investment by the Russian government and a funding of $5 billion for the next five years.
As Russia is going to become the strongest growth area for international pharmaceutical and chemical companies over the next two years (CPhI Survey, 2011), customers and exporters can take it as the right opportunity for them to exhibit in this big event in Moscow.
One can build new avenues and create partnerships with leading Russian companies and government institutions. CPhI Russia 2015 aptly provides a platform for networking with top-level executives and gain in-depth market knowledge during the two-day international forum from April 27-29, 2015. This year CPhI Russia is also partnering with IPhEB, a highly respected Russian pharma event.
Indo- Russian pharma trade
Historically India’s relation with Russia has been regarded as the key pillar for the country’s foreign policy. In fact Russia has been a long-standing time-tested partner of India. Since the signing of “Declaration on the India-Russia Strategic Partnership” in October 2000 (during the visit of President Vladimir Putin to India), India-Russia ties have acquired a qualitatively new character with enhanced levels of co-operation in almost all areas of the bilateral relationship and pharma and biotechnology are important amongst them.
Despite its huge size and advanced scientific might, Russia still relies on India for pharmaceutical exports. In fact this has been one of the mainstays of Indo-Soviet trade, access to cheap medicine being a persistent problem for the Russian population. In 2010, the Russian government sought to protect its domestic pharmaceutical industry by lowering the price of local drugs and imposing regulations on foreign manufacturers, a plan which pushed a number of Indian pharma companies out of Russia.
“Russia has been a good market for us since long and it offers huge potential for the generic drugs, but off late the government’s policy to support the local manufacturers is subjecting Indian manufacturers with stringent regulatory hurdles,” says Satish Reddy, Chairman of Dr. Reddy’s labs.
However, even now 80 per cent of the Disclosed Limited Order (DLO) of Russia’s pharmaceutical market is spent on imported products. And this trend is expected to persist for the next several years.
With the growing ageing population and high cost branded drugs prevailing in the Russian market, Russia is in dire need of low cost high quality generic medicines to meet the growing healthcare demand in the country.
Having acknowledged India’s prowess as a low cost high quality generic manufacturer of the world, Russian authorities in Moscow recently had extended an invitation to Indian businessmen to supply pharmaceuticals at moderate prices under direct contracts.
To further strengthen the relationship in the field of pharma and biotechnology trade, both Russia and India have signed four agreements and memoranda of understanding related to the production of pharmaceuticals that have been concluded by the two sides during Medvedev’s visit to India in December 2010, which points to the primacy of this industry in the bilateral trade.
There are about 300 Indian companies which are registered in Russia and many of them dealing in pharmaceuticals. At the same time there are only 33 Russian companies that Russia’s Chamber of Commerce lists as operating in India. Almost all of these are Indian branches of Russian state-owned conglomerates involved in hydrocarbons, machine-building and construction and arms rather than private companies.
Challenges
One of the challenges often cited by the Indian side is the difficulty of doing business in Russia outside of the big cities—Moscow and St. Petersburg—due to the lack of roads, as well as the language barrier for Indian businessmen, with all communication in most companies taking place in Russian. More generally, persistent fears of corruption, lack of transparency, and inadequate insurance facilities abound.
Meanwhile, the Russian side cites difficulties in setting up in India where they are bound by stringent labour laws, as well as the Export Credit Guarantee Corporation of India (ECGC)’s grade of B for Russia, which translates to a higher premium for Russia-bound Indian goods.
Governments of both the countries have repeatedly spoken about the sluggishness of their private sectors and, in the past few years, there have been several tools of co-operation set up to address these problem, but with variable levels of effectiveness.
Deeper prodding reveals a number of joint scientific and technological initiatives that have either not realized their full potential or never actually taken off, despite their presence in official documentation. One such major project which is still in limbo is the proposed Russian-Indian Centre for Ayurvedic Research in Chandigarh. Despite a number of MoUs having been signed for their establishment, there has been no action take so far to make it a reality till date.
Opportunities
To beat the challenges of disease burden on both sides, Russia and Indian can work on various joint ventures. Joint medical research is one such unexplored area. India, the world’s highest burden country for tuberculosis, and Russia, the world’s 11th, with a large number of prison TB cases, could conduct collaborative research on eradicating the disease at their DOTS. In the future, the joint development of products through nano-technology has the potential to revolutionize biotechnology and medical science as well. The combined Russian and Indian engineering prowess, together with large-scale Russian investments, can result in the building of thriving nanotechnology, biotechnology, and medical, including pharmaceutical, research institutions, opine experts.