EP Vantage Interview – Universal drug coverage nears in fast-growing Russia
Russia is one of the fastest growing pharmaceutical markets in the world. Its growth forecast of 11% a year means it attracts companies focusing on the emerging markets, as witnessed by Takeda’s construction of one of Russia's first big pharma factories in Yaroslavl. It remains, however, a market primarily for off-patent generic and branded generics as third party coverage is uncommon.
That situation has the potential to change as the government rolls out a reimbursement scheme in the next few years, Vladimir Shipkov, executive director of the Association of International Pharmaceutical Manufacturers, tells EP Vantage. “There is already a general understanding in government and in the Ministry of Health that sooner or later universal reimbursement will be developed,” he says.
Russia’s growing middle class, a product of the country’s relatively healthy commodity trade, has put it solidly in the class of attractive emerging economies with Brazil, India and China. Growth in disposable income has driven a strong retail market for pharmaceuticals, but as yet this consists of relatively low-value generics and branded generics purchased out of pocket by patients.
Takeda’s recently completed factory in Yaroslavl, where Mr Shipkov was interviewed, will produce the blood substitute Actovegin, aspirin Cardiomagnyl, and calcium supplements, not exactly high-margin products when compared with patent-protected drugs for cancer or orphan diseases (EP Vantage Interview - Nycomed the answer to Takeda's woes, September 13, 2012).
Also limiting entry of many newer products is the need for Russia-specific data in licensing applications; thus a separate trial or inclusion of a Russian site in pivotal studies are essential. But reimbursement remains the biggest hurdle.
A limited scale reimbursement programme, covering one-tenth of Russia's 150 million-strong population, was launched recently; however, because recipients were offered the option of taking cash rather than drugs, just 5 million remain enrolled, Mr Shipkov says.
Thus Mr Shipkov’s organisation, which represents international companies doing business in Russia, along with the domestic group, the Association of Russian Pharmaceutical Manufacturers, has pressured the government to develop a sustainable programme.
Three years ago the organisation began work on a policy document analysing international experiences in drug coverage, which found European health systems to be most applicable to Russian needs. With the government’s attention now on trying to get payment schemes in place, the next two years will see regional pilot programmes gather data on the best design.
Patients will no doubt share in the cost, but Mr Shipkov says this will probably make up no more than 50% of the total. Although many unknowns remain, momentum has built.
“Even two or three years ago nobody knew the substance of a reimbursement system or how to develop it,” Mr Shipkov says. “Now this issue is included in the agenda of Russian leadership. Everybody knows what it means for patients and the population.”
Expansion in the use of newer drugs will be essential to building a domestic industry as well, Mr Shipkov says. As the government itself is seeking to reduce the economic dependence on oil, natural gas and coal, and their inherent vulnerability to economic cycles, high-tech companies are sought. Certainly, a requirement of Russian data in licensing applications builds clinical expertise, but progress in research and development and manufacturing will also energise growth of a domestic industry.
“That is why we’re here,” Mr Shipkov says of Takeda’s decision to build a plant to serve the Russian market. “It was one of the key reasons for localisation.”
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