AstraZeneca plots $150M facility in Russia

AstraZeneca has accepted Vladimir Putin's invitation. The drugmaker plans to spend $150 million on a Russian drug manufacturing plant in an attempt to capture a share of a drug market that's expected to grow quickly over the next several years. AZ says it plans for the facility to produce cancer treatments, cardiovascular drugs and other products by the spring of 2013.

Investing big money in the country is de riguer for foreign pharma firms now. Putin has made his expectations for market entry very clear. Not only has the Russian prime minister pledged to spend $3.9 billion to help develop a domestic pharma industry, but he's set a local market-share target of 90 percent, meaning that foreign drugmakers had better set up local operations to get their share of the favors.

Plus, Putin expects foreign drugmakers to transfer technology to domestic players. And he has some punishments in mind for foreign companies that don't manufacture in-country and lend a hand to Russian firms. Perhaps that's why AZ's Russian plans include investment in R&D as well.

Obviously, Big Pharma is getting the message. Novartis plans to spend $500 million in Russian investment over the next five years. Novo Nordisk is building an insulin plant there. GlaxoSmithKline recently teamed up with Russia's Binnopharm to make and sell GSK vaccines. Now, AZ has joined Putin's locals-only club. Who's next?

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