December 3, 2011
Addressing investors recently at the “Russia Calling! Investment Forum,” Russian Prime Minister Vladimir Putin included biotechnology among five business sectors on which his nation and its economy are counting to deliver fast growth over the next several years.
“4% is not good enough,” Putin declared in October. “We shall aim higher on the back of domestic demand, an improving investment climate, and greater investment efficiency. The ultimate goal is to diversify the economy and create high-tech jobs.”
Putin spoke six months after committing Russia to growing its biopharma industry to a 5% share of the global market by 2020, up from just 0.2% this year. In March, Russian officials announced approval of RUB 120 billion (about $3.9 billion) toward Pharma-2020. The program, approved but not funded in 2009, calls for boosting investment in Russian manufacturing capability, growing the market share of domestic drugs from 20% to 50%, and creating more high-skill jobs to elevate Russia’s pharmaceutical industry. To build demand for domestic drugs, doctors who prescribe them are entitled under Pharma-2020 to greater reimbursements than for using imports.
The results were evident in June, as Novartis broke ground on a pharmaceutical manufacturing plant in St. Petersburg as part of a $500 million, five-year investment in Russia. Additionally, AstraZeneca started constructing a $150 million manufacturing plant in the Kaluga region. Sanofi already operates an insulin plant it acquired last year from Polish-based Bioton. And Swiss-owned Nycomed plans a $93 million API facility at the Novoselki industrial park in Yaroslavl set to open in 2014, while Novo Nordisk intends to build a $100 million insulin plant in Kaluga.