Russia has been rumbling at global pharma for awhile, but Prime Minister Vladimir Putin has sharpened his warnings to foreign drugmakers. If you want to capture part of his country's market, be prepared to manufacture your products locally and transfer your know-how to Russian drugmakers, too.
It's all part of Putin's plan to build up the Russian drug industry. The prime minister is now promising to invest 120 billion roubles ($3.9 billion) into domestic pharma and medical devices, industries he's designated as priorities for growth. And he's setting market-share targets for Russian pharma, too: By 2020, he wants local drugmakers to be producing 90 percent of medicines deemed "essential" by the government.
"The simple way is to show that there will be restrictions for them in the Russian market if they do not launch production and transfer technology," Putin said during a cabinet meeting on the drug sector, according to Reuters. He drew an analogy with the car business, in which Russia forced domestic production by imposing higher import duties and establishing consumer incentives.
Of course, the Russian government has direct purchasing power over pharma as well. Combined with the industry investment, the country's leadership is hoping to expand domestic drugmaking by more than 10 times. "At the most conservative estimate, the pharmaceuticals market will grow sixfold over the next decade. So our industry will have to grow 12-fold," Trade Minister Viktor Khristenko said during the cabinet meeting, according to the Moscow Times.
Some drugmakers have already announced plans to set up production in-country, namely Nycomed and Novo Nordisk ($NVO); as Reuters notes, AstraZeneca ($AZN) and Novartis ($NVS) have said they're considering doing the same. The question now is, who's next?