Working Day

9 october, 2009 20:14

Vladimir Putin chaired a meeting on the development strategy for the pharmaceutical industry in Zelenograd

Vladimir Putin chaired a meeting on the development strategy for the pharmaceutical industry in Zelenograd
"The tasks that the state and the pharmaceutical companies face are clear. First, the policy for the state to purchase medicines needs to be overhauled to introduce clear-cut, transparent market rules to eliminate the possibility of loopholes and abuses, which allow sidestepping the terms of a public auction. When public auctions are aboveboard, prices fall significantly."
Vladimir Putin
At a meeting on the development strategy for the pharmaceutical industry

Vladimir Putin's opening address:

Ladies and gentlemen,

We have gathered here to discuss an extremely important issue-the implementation of the development strategy for the Russian pharmaceutical industry through 2020.

Before we start this discussion, I would like to say a few words about our venue. I visited Zelenograd in 2006 to discuss the development of microelectronics, at which time I also visited the Mikron Company. What I have seen today moves me to give the company the credit it deserves.

Mikron has done a great job. In a mere three years it has become, in fact, a new company. It is the only company of its kind in Russia, with a technological transfer with topological standards of 180 nanometres. The equipment has been imported from 40 companies based in ten countries in North America, Europe, Southeast Asia and the rest of Asia-in particular, Japan.

Mikron has signed a contract with the state-owned Rosnanotech company and set an ambitious goal of switching to 90-nanometre standards within a year. This is what every Russian industry and the entire national economy needs.

I wish you every success.

The other manufacturing company we have visited today is a pharmaceutical company. It has been built on a thoroughly new basis within two and a half years- a breathtaking success. The plant has also entered into a partnership with Rosnanotech to launch the design and production of seven import-replacing genetic engineering medicines, three groundbreaking biotechnological preparations, and new nanoform agents to treat haematological, oncological, contagious and respiratory diseases.

All this rests on a groundbreaking technological and scientific basis. The company also deserves attention for its personnel recruiting. Many experts have returned to Russia after many years' successful work in other European countries and in America. All the conditions are set up for their further success upon their return.

Of no smaller importance is the company's permanent contact with research institutes and universities. This partnership provides what is fashionably called "synergism". It exemplifies the symbiosis of production, research and education that we often talk about today.

I think that's enough compliments for now, and I should move on to our principal topic-the development of the pharmaceutical industry.

The pharmaceutical industry has a direct impact on this country's life expectancy and morbidity rate. Evidently, we will never be able to provide the population with quality, easily accessible medicines unless the industry makes an innovative breakthrough.

Meanwhile, the situation is far from satisfactory. Russia is presently home to approximately 350 pharmaceutical companies, which account for 20% of the market in monetary terms. The rest is imports. Foreign medicines are often sold in Russia for prices higher than in any other country. This is hard to justify based on transport expenses, as they make up 0.2% of the cost at most.

Guaranteed purchases of medicine is one of the principal financial approaches for implementing state strategy in this field. In particular, government and other centralised companies must make such purchases, whose amount is quite sufficient in our country, approaching 230 billion roubles a year. However, Russian manufacturers have no permanent, or at least long-term, access to the market-suffice to say that federal programmes account for fewer than 10% of the volume of all Russian-made medicines sold.

In short, Russian manufacturers are nothing but guests in their own market.

So the tasks that the state and the pharmaceutical companies face are clear. First, the policy for the state to purchase medicines needs to be overhauled to introduce clear-cut, transparent market rules to eliminate the possibility of loopholes and abuses, which allow sidestepping the terms of a public auction. When public auctions are aboveboard, prices fall significantly.

There are grotesque examples that would make one laugh if they were not so alarming. The price of on batch of medicine in the Chelyabinsk Region fell to 1% of the initial price-believe it or not-after the Anti-monopoly Service interfered.

Unfair competition gives medicine suppliers huge profits through inflated prices.

Russian-manufactured medicines purchased using government money must make up no less than a half of the total supply, in terms of value, within the next two or three years. We should shift to long-term contracts with Russian manufacturers to supply medicines to government, municipal and corporate hospitals and clinics, as well as to medical centres affiliated with the Academy of Medical Sciences.

Such contracts will help Russian manufacturers upgrade production facilities and attract funds for technological upgrades and introducing cutting-edge technologies.

That is exactly what the personnel of this pharmaceutical plant said when we were making a tour of it today.

Next, we should provide for the greatest possible number of medicines to be manufactured in Russia-in particular, through licensed production and generics.

We should make a list of important and essential medicines, and promote their domestic manufacture through development institutions.

There is a third challenge-preventing the sale of counterfeit medicines and medicines that have already expired. These medicines threaten people's health and even lives, and our efforts to combat them should not subside.

Fourth, it is taking Russian manufacturers too long to switch to GMP and other international standards, without which the Russian pharmaceutical industry will never become an equal competitor in the world.

I have just discussed the matter with the Health Minister. It is clear that if we shift to the new standards overnight, Russian manufacturers will vanish from the market-but it is also impossible to stay in our present state forever. What we need is a stringent plan for a gradual transfer to the GMP standards. Medicines that do not qualify will no longer be purchased using government money after such a plan has been implemented.

Fifth, disintegration is one of the reasons why the Russian pharmaceutical industry lags behind. We must consolidate. The industry needs integrated structures linking research and development with manufacture. These would of course make use of market instruments.

In this regard, the state should help interested companies receive subsidised interest rates on loans for technological upgrades. I have issued a relevant instruction to the Industry and Finance ministries, and I hope it will be enacted as soon as possible, and that the ministries will share their own ideas. Mr Viktor Khristenko and I estimate the arrangement requires about 700 million roubles.

Sixth, government development institutions should play a practical role in the research and development of innovative medicines, moving these medicines into production, and promoting the Russian pharmaceutical industry in foreign markets, especially in developing countries.

* * *

Ladies and gentlemen,

I cannot keep silent on another burning issue, however unpleasant it might be to discuss it. I mean the unhealthy relationship that has emerged in recent decades between pharmaceutical manufacturers-mainly foreign-and a part of the Russian medical community. It is natural for pharmaceutical companies to advertise their products, but they must do so in a civilised way and comply with universally acknowledged ethical norms, as well as with Russian legislation.

Meanwhile, pharmaceutical companies pay doctors bonuses for prescribing their medicines-sometimes even on forms printed by these same suppliers. This is an inadmissible practice. Manufacturers sponsor seminars and other corporate events, often at venues near sunny beaches. Such events involve thousands of Russian doctors. I want to emphasize that: thousands.

Titans of the pharmaceutical industry have established powerful lobbies. We should put an end to these abuses. Medical ethics should be made more stringent, and profit made on this ignoble practice should be prohibited by law. I hope the medical community will pay attention to this, because its own action will be the most effective.

We should also get rid of so-called pharmaceutical representatives at medical institutions. True, there are such people in other countries, but their work is strictly limited. But in Russia this practice is unhealthy. For starters, we should at least limit their activities and make them more transparent.

Last but not least, persons paid by manufacturers should not work on expert boards for the approval of new medicines. There are obviously conflicting interests to the detriment of the industry here, because, as a rule, experts working on such boards ignore quality and promote medicines produced by the company that pays them.

I understand how sensitive these matters are. Pharmaceutical manufacturers in Russia and other countries are very sophisticated when it comes to their interests. They only need a short time to find support in relevant offices, send out public promoters, and set up committees of all kinds. If we want to protect our nation, we should protect national and not corporate interests.

As for a civilised dialogue between the medical community and pharmaceutical companies, we could perhaps establish a market council on par with what currently exists for the energy industry, as well as for some other industries.

The development strategy for the pharmaceutical industry sets ambitious goals. When implemented, it will increase the share of Russian-manufactured medicines from 19% to 50% in terms of value. Innovative medicines will make up 60% or more of the entire output, and 85% of important and essential medicines will be manufactured in Russia.

I would like to hear how strategy-related work is going on, and to what extent the pharmaceutical industry is ready to meet the targets that have been set for it.

Let us get down to business.