Leading Indian and Chinese drugmakers are considering accelerating their expansion into the Russian market – in a move to fill vacant niches that appeared after the reduction of presence of Western pharmaceutical companies in recent months following the invasion of Ukraine.
According to analysts, there is a possibility that Asian drugmakers can not only take the share of Western competitors, but also squeeze out local manufacturers due to the low cost of their drugs.
In the case of India, the country has not only long developed the production of finished dosage forms, but also active ingredients. In addition, Indian generic drug manufacturers obtain licenses from Western companies on better terms than Russian ones, which resulted in lower prices for finished drugs.
As of now, according to data of the Russian Association of Independent Pharmacies, the supplies of drugs and active ingredients to the Russian market has not changed significantly and there is no shortage of imported drugs. At the same time the share of Indian and Asian drugmakers remain almost at the same level as in the past. However, this situation is likely to change soon, as their presence is steadily growing.
According to Russian analysts, Indian pharmaceutical companies occupied a large share of the Russian market in the 1990-2000s, but over time they lost ground to European and local manufacturers. Analysts also expect, in addition to Indian producers, the share of Asian drugmakers will also grow, that will be primarily at the expense of China and South Korea.
Russia on path of import substitution
Analysts also said the Russian pharmaceutical market is on the path of import substitution, which is reflected by the growth of domestic output and the growth of production of drugs on full-cycle basis although about 80%-85% of Russian drugs are still made from imported active ingredients.
Due to the ongoing war, global pharmaceutical companies, including Roche, Novartis, Pfizer, Merck & Co, AbbVie, Sanofi, announced the suspension of the recruitment of participants in ongoing clinical trials and the launch of new ones.
As director of the Russian Association of Independent Pharmacies, Victoria Presnyakova said in an interview with the Russian Kommersant business paper, as of now, 15 Western companies have pulled out from marketing campaigns and organizing new trials in Russia, and three manufacturers significantly cut their local range of products.
