Ranbaxy looks to add Daiichi Sankyo drugs to its Russian portfolio

While many Big Pharma players have only recently discovered the potential of doing business in Russia, India's generic drugmaker Ranbaxy Laboratories has been there for two decades. Ranbaxy has established itself by selling the low-price copycat drugs it has made its fortunes on, but is now looking at moving up the value chain.

The head of Ranbaxy's business in Russia, Aman Khanna, says Ranbaxy is looking at adding branded drugs from its Japanese parent Daiichi Sankyo to its portfolio mix in Russia. "Over the years, Ranbaxy has established itself as a preferred generic pharmaceutical company in Russia. In coming years, we look at further expanding our product portfolio to include value-added and innovator products from our parent company, Daiichi Sankyo," Khanna told The Economic Times.

The Indian company claims to have a 15.4% market share already in Russia. The company has registered 51 drugs in the Russian Federation and operates in 56 regions there. But there are developments that are making it a more challenging place to make money.

As the country works to build up its own drugmaking industry, it has told outside drugmakers they need to partner up with domestic companies and establish local production facilities to share in the spoils. It recently barred overseas suppliers of particular meds if at least two domestic alternatives are already available, which often will mean generics. The protective move is part of President Vladimir Putin's push to build up a Russian pharma industry, with 90% of "strategically important" medicines produced in-country by 2018. Currently, 85% of Russia's state drug spending goes to foreign-made drugs. In 2011, 93% of the most expensive meds sold in the country were imported. So the new tack will mean lost sales for a lot of companies.

Still, given that many Western markets are providing sluggish growth, many drugmakers see Russia and its growing market as a place they want to be. Companies like Novartis ($NVS), AstraZeneca ($AZN), GlaxoSmithKline ($GSK) and Novo Nordisk ($NVO) are among the drugmakers who are socking big money into Russian infrastructure and partnerships in a bid to capture a share of that market.

- read the Economic Times story

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