Drug plants popping up in Kazakhstan

Emerging markets have become the name of the growth game and Kazakhstan has a growing middle class and developing healthcare system that has caught the attention of some drugmakers who have plans to build new plants there.

As the Financial Times points out, Prague-based Favea Europe in October signed an agreement with Romat, a large Kazakh company. Romat will invest about €37 million ($49.3 million) in two plants as part of that deal. Turkey's Abdi Ibrahim Global Pharm struck a deal with Alma Pharma and the two will build a $60 million factory in the country. Those deals follow the $85 million deal from 2011 when Poland's Polpharma bought Chimpharm, the largest domestic producer in Kazakhstan. A new manufacturing facility was part of that acquisition. Big Pharma also is taking note. GlaxoSmithKline ($GSK) last year opened an office in the country with the intent of eventually manufacturing some of its vaccines there.

The country is actively recruiting drug companies as part of President Nursultan Nazarbayev's intention of building domestic drug production to 50% of the country's requirements to create jobs and to keep healthcare costs in hand. It is not unlike what Russia is doing but in that case the country has indicated that if Western companies want to sell drugs there, they need to start producing them there.

While Kazakhstan is seeing some action, its goal has been elusive as the country's middle class continues to grow and so does its demand for modern medicines, the Financial Times points out. The country imported close to $1 billion worth of drugs last year, accounting for about 85% of its needs. Domestic generic drug producers filled in the gap.

- read the Financial Times story

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