New capacity pushing pharmaceutical development

The Russian government is supporting the development of the country's thriving pharmaceutical market. As foreign capital is raised to meet domestic demand for medicines, co-operation is helping new factories open doors.

The Petrovaks Group of Companies has unveiled its new factory in Moscow Region where the flu-fighting Grippol vaccine will be produced – the first of its kind in Russia.  In 2007, the country's pharmaceutical market was valued at $12 billion. Its growth potential is high, with estimates for this year from 20 to 25%.

The government is aiming to develop domestic production in the sector to stave off the flow of imports according to Andrey Mladentsev, Deputy Director, Roszdravnadzor, Moscow region.

“We are actively involved in the working process of development of  pharmaceutical production so that there will be more medicinal  products made in Russia to meet the demand provided by Russian patients.”

But foreign investment in pharmaceuticals is also part of that development plan. The European Bank of Reconstruction and Development in Russia has invested €40 million in the construction of the Petrovaks factory. Eric Rasmussen, from the European Bank of Reconstruction and Development, Moscow region, sees it as an integration opportunity

“If you look around the world it is an increasingly integrated and an integrated economy.  And many of the opportunities that exist in Russia are actually there and waiting for that integration to happen.”

Construction of the Petrovaks facility began in 2005.  It is now has the capacity to produce up to 80 million doses of retail medicine a year, with the possibility of increasing that number if needed. It plans to produce for export – primarily to CIS countries.

The opening of new pharmaceutical plants like these and the production of new medicines is all part of the Russian government's plans for development in the sector.  Marina Gladkova, Analyst for Eastkommerts, Moscow, says foreign interest in the sector is strong, helping the Russian market to realise its potential.

“There are two tendencies in investment into the sector – either only with Russian capital or through companies with foreign  capital that have production facilities in Russia.  I think right now foreign companies are ready to buy small domestic companies and also to build new factories in Russia.”

Pharmaceuticals are one of the high-tech, consumer sectors the government sees as vital. And investment in plants like Petrovaks is seen as a way to help Russia's economy, as well as its people, stay healthy.