The recent visit of the Russian President Vladimir Putin has given a booster shot to the pharmaceuticals trade between India and the Commonwealth of Independent States (CIS) by inking pacts for research in the areas of HIV/AIDS, oncology, bioinformatics, bio-imaging, neurosciences and vaccines .

India is also planning to actively participate in Russia’s ‘Pharma 2020 Programme’ that would facilitate setting up of production units in Russia, besides, streamlining the registration process and sharing of information on drugs imported by Russia and on production volumes of strategically identified medicines.

With the growing salience of India in the field of pharmaceuticals and biotechnology on the global stage, the CIS nations are keenly exploring opportunities for building trade relations with India. The Indian government is also equally interested in building a long-term association with the CIS nations.

Among the CIS nations, India’s pharmaceutical exports are spread across Azerbaijan, Armenia, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Uzbekistan and Ukraine

Of these the major trading partners, Russia, Ukraine, Kazakhstan, Uzbekistan, Kyrgyzstan and Belarus constitute more than 90 per cent of India's total bilateral trade with the CIS countries. However, at present CIS constitutes only 1.2 per cent share in India's total exports. The main reason for this is attributed to factors like distance, language barrier, inadequate transport facility and lack of information about business opportunities.

In 2010, CIS had introduced new regulations which mandated the registration process as transparent and indicated that the process would take 210 days for approvals. The norms also insisted that all drug imports would go through the same registration process as those manufactured in CIS. The only exception was given to clinical trials on volunteers where CIS was agreeable to recognize clinical trial data if there was an bilateral agreement with that country. However, orphan drugs used to treat rare diseases were out of the purview of this regulation.

These norms are a clear indication on the part of CIS to strengthen its domestic manufacturing of pharmaceuticals. From 2011, there had been a shift to the good manufacturing practices (GMP) standards and early this year, CIS had begun enforcing GMP which has given a leg up to domestic production.

In the area of pharmaceuticals, CIS is looking to partner with Indian pharma. The high quality and affordable generics is seen to be on the import list of both developed and developing world as there is a huge pressure to bring down healthcare costs. India stands to gain here going by its inherent strengths in the development of the scores of off patent drugs. Now with the several more patent drug expiries in the offing, CIS could turn to India as a viable hub to source its range of generic formulations, said officials from the Karnataka Drugs and Pharmaceutical Association.

However, there is an increased interest among Russian firms to enter into pacts with international pharma companies. Moreover since many CIS countries like Georgia and Russia offer a sound base for manufacture, a number of global pharma majors including Novartis have opened a facility at St. Petersburg, Takeda Pharmaceutical at Yaroslavl in Russia . It is also reported that GSK, Teva and AstraZeneca also intend to invest in the production plants in Russia and have access to the world’s 11th largest pharma market in the world.

CIS offers considerable growth prospects for Indian pharma companies .The region is still an emerging market for the India. In an effort to identify business opportunities, Pharmaceutical Promotion Council of India or Pharmexcil is working out a slew of initiatives to boost its exports to the region.

 According to Dr. P.V. Appaji, Director General, Pharmexcil, the move to participate in local expositions in CIS will give a fillip to the pharma companies in the country to network and explore collaborations and joint ventures.

However the impact of the global economic slowdown from 2008 to early 2013 led to a fall in exports of pharmaceuticals. To survive in such an adverse global environment, pharmaceutical exporters need some support and incentives from various government agencies. India’s Commerce Ministry’s move to establish an International Co-operation Cell (ICC) within the office of the Drugs Controller General of India (DCGI) to address export related queries to boost the confidence of the exporters with a single window for better delivery of services.

The implementation of the new regulations in CIS in 2010 saw the region reducing import of Indian generics and opting for domestic manufacturing. However this move has helped Dr. Reddy's, JB Pharma, Glenmark and Aurobindo Pharma among others because these companies have set up their own production facilities here. While Dr. Reddy’s generates 15 per cent of its sales from CIS and particularly Russia, JB Chemicals supplies 80 per cent of ingredients to J&J here.

A growing disease profile, rise in income levels awareness on prevention an expanding geriatric and paediatric population have now created the need for high quality and affordable generic drugs across disease segments, said Archana Dubey Mitra, vice president, exports Bal Pharma.

The Indian biotech companies also have an opportunity in the region. The incidence of arthritis, cancer and psoriasis will now see increasing sales in the region, said industry observers.

Growth prospects in CIS region
It is estimated that pharmaceutical sector in Russia and other CIS nations will have a double digit growth of around 10 to 11 per cent during the year 2012-2016. At present there is no national drug provision insurance system in Russia and CIS countries. This means that 60-70 per cent of all pharmaceutical sales are paid out of the Individual pockets. Large, locally-owned pharmacy chains account for most of the market, but there are still a substantial number of small, independent pharmacies, particularly in the small and medium-sized cities. A national insurance scheme is under development. The hospital drug provision system, meanwhile, is more advanced and will continue to develop in the future.

A key factor for pharmaceutical companies to succeed in CIS region would be to balance their portfolio of branded generics, branded ethical products and over-the-counter (OTC) drugs that can be sold primarily at the retail level. A solid pipeline of innovative products aimed at the developing reimbursement and insurance schemes is also critical.

Meeting stringent regulatory regime of CIS
CIS market definitely holds good potential and offers promising opportunity for quality players. Though the new regulations are welcome, the fee is too high to export and market multiple products. The 210 days seems to be good for the companies which could submit dossiers with zero errors. Also, language would play a major role to fast track registration, said Mitra.

CIS as a region holds good potential for growth and Russia in particular with remarkable growth rate of 13 per cent, having strong support from the government is definitely bound to grow by leaps and bounds and is attracting the attention of global majors. Since Russia is an emerging market, opportunities abound for serious players in pharmaceuticals. In this context, joint venture partnerships will be a good way to look at and many would be working in this direction, said Mitra.

Bal Pharma entered Russia more than a decade ago with a couple of products and is commercially operational too. Other markets where presence can be seen are Uzbekistan, Tajikistan and Moldova. We are working on product development and registration for Ukraine and Belarus. The high registration cost and language barrier have made us go slow on the said markets, she said.

The market of CIS is important for Bal Pharma and its products are well accepted in the region .Hence it will be focusing more on product registrations in the coming years. The company is trying to accelerate growth by expanding the product portfolio in the current markets while exploring opportunities in others, she said.

Tomsk team visits Indian cities
Russia’s Tomsk region known for its pharmaceuticals and chemicals have evinced interest for collaborations and joint ventures with Indian companies. A business delegation of small and medium companies from the Tomsk Region was here in Bengaluru, Mumbai and New Delhi to ascertain the growth prospects in early November 2014.

With Russia's official accession to the WTO, the customs duties imposed on drugs have dropped from 15 per cent to about 6.5 per cent. The two countries are already exploring the possibility of a Free Trade Agreement to give a fillip to bilateral trade from the existing $6 billion, which is less than one per cent of India’s total foreign trade.

The business delegation organized by the Tomsk Chamber of Commerce and Industry was in India where along with the Federation of Indian Chamber of Commerce (Ficci) state branches were looking to discover new opportunities of cooperation with potential Indian pharma companies.

Now India is looking to attract investments in the Delhi - Mumbai industrial corridors, the new manufacturing and investment zones and increase pharmaceutical export to Russia, noted sources.

One company among the 10- member delegation, Zeleynaya , engaged in herbal tea production was scouting for a market here. Another company Corporate Medicine Center Ltd. is specialised in safety-security protection and medicine services for enterprises, as well as comprehensive clinical care. This company which focuses on employee’s health was looking for an opportunity in India because it is known for its large industrial hubs, according to officials.

Corporate Medicine Center , known to provide highly professional medical services for corporate houses and industrial hubs, is keen to offer services in emergency medicine, working conditions estimation and consult services for safe working conditions and also to offer first-aid training.