Russia slashes spending on cancer drugs amid skyrocketing prices: Report

St. Petersburg, Russia -   yulenochekk/iStock/Getty Images Plus/Getty Images
Some Russian regions don't want to invest in pricey cancer drugs, complicating efforts by Western drugmakers who are investing in the country.

Russia has long been considered a prime market for Western biopharma companies in search of new sources of growth. And companies ranging from Pfizer to AstraZeneca have been clamoring to comply with President Vladimir Putin’s demand that they ally with local producers and establish manufacturing plants in Russia. But now Russia is pushing back on an issue that has raised concerns around the world: cancer drug prices.

In 2016, spending on cancer treatments fell in about half of the 85 regions of Russia, according to statistics quoted by The Moscow Times. At least two regions cut their annual spending on oncology drugs by nearly 50%. Analysts blamed rising drug prices.

“In Russia, there is no general standard of care for cancer patients,” David Melik-Huseynov, director of the country’s Institute of Healthcare and Medical Management, told the paper. “The same drugs are needed to treat cancer, regardless of where a patient lives. But everything depends on regional budgets.”

This is likely to be unwelcome news to companies that have been trying to get on Putin’s good side. Several years ago, he pledged that 90% of “strategically important” drugs would be made in Russia by 2018. Pfizer, for one, responded by striking three deals to establish manufacturing plants in Russia. The most recent deal, struck last year with Russia’s NovaMedica, should result in more than 30 drugs being produced there—including cancer treatments. In May, Pfizer confirmed the plant is on track to open in 2020.

RELATED: Pfizer strikes second deal this year for drug production in Russia

Just how big an impact local manufacturing will have on drug prices in Russia is an open question, however. And Russia is far from the only country giving pharma companies a hard time about the pricing issue.

Last month, antitrust regulators in the European Union opened an investigation into South Africa’s Aspen Pharmacare, for example, on allegations that it jacked up prices on cancer drugs and threatened to pull them off the market if payers didn’t comply. The company said in a statement that it is working with the European Commission to resolve the issue.

And just last week, South Africa’s anti-competition watchdogs announced they’re launching a probe into Aspen, Pfizer and Roche focused on “excessive pricing” of cancer drugs. The Competition Commission of South Africa took to Twitter, blasting the companies for engaging in “medical schemes” and “monopoly aided by patents.”

RELATED: Pfizer, Roche cancer drug pricing under investigation in South Africa

As for the situation in Russia, there is a bit of good news amid the decline in spending on cancer drugs. Three of the 85 regions surveyed—Sevastopol, the Republic of Buryatia and Voronezh—actually increased their spending on oncology treatments by more than 200%.