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Russia: A promising future market for the pharmaceutical industry

Russia’s stated strategy for the pharmaceutical industry mandates that 90 percent of all essential pharmaceuticals be manufactured within the country by 2020. This means that there is a huge incentive for international companies to establish their own production facilities inside Russia. Russia expert Alex Stolarsky, Schneider Group, takes a look at the key legal and tax issues in his presentation at Cleanzone Plaza on 23 October at 1:00 p.m. He gives us a preview here in our interview.

‘As a result of Russian localisation policies, the importance of the Russian market to international pharmaceuticals firms has been increasing since 2015, particularly for those companies looking to participate in governmental tender processes.’

Alex Stolarsky

1. What is the importance of the Russian market for companies where production is carried out under cleanroom conditions, such as the pharmaceutical industry?

Alex Stolarsky: “As a result of Russian localisation policies, the importance of the Russian market to international pharmaceuticals firms has been increasing since 2015, particularly for those companies looking to participate in governmental tender processes. Here, it is necessary to demonstrate sufficient local content and production within Russia, or to contract production out to Russian firms. Furthermore, since May 2017 there has – at least officially – been a uniform pharmaceuticals market within the Eurasian Economic Union (EAEU), including the requisite processes for uniform drug approvals etc.

Healthcare and medical supplies are areas of key strategic importance to the Russian government. According to Russia’s ‘Pharma 2020’ strategy, up to 90 percent of all essential pharmaceuticals and 50 percent of all other medicines are to be produced within Russia by 2020. We believe that this offers tremendous growth potential for foreign pharmaceuticals manufacturers.”

2. In your opinion, what are conditions currently like?

Alex Stolarsky: “In view of the current geopolitical upheaval and sanctions, the Russian market is viewed with a certain degree of ambivalence, and it is treated with tremendous caution. With spiralling sanctions and other characteristics of the Russian market, this is certainly not misplaced. Even so, we are also witnessing a certain degree of over-compliance. There is no doubt that lasting success in Russia demands structured preparations for legal affairs, tax matters and operations, and these efforts must be accompanied by a healthy dose of pragmatism and a willingness to take decisions. In the pharmaceutical industry in particular, we are witnessing a great deal of activity focused on Russia and the EAEU, as well as increased interest in local production.”

3. What topics will you be exploring in your presentation at Cleanzone Plaza?

Alex Stolarsky: “I will be starting off with a brief overview of the overall economic situation in Russia before proceeding to address the uniform pharmaceuticals market within the EAEU. I will then go into the details of the legal and tax aspects of setting up production; in other words, I will be presenting the rules for localisation in Russia. Furthermore, I will be discussing GMP in the EAEU for the pharmaceuticals field, and exploring how it will be necessary to serialise all pharmaceuticals (both those available solely on prescription (Rx) and over-the-counter medications (OTC)) in Russia starting in 2020.

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