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To Russia With Drugs Big Pharma Eyes Big Roubles Over Next Few Years

Posted By Paul Tate, June 29, 2011 at 8:50 PM, in Category: Global Value Networks

One of the hottest global pharmaceutical markets right now is in Russia. With a population of 142 million people, the country accounts for a third of the entire Central and Eastern European pharma market. Last year alone, Russian pharma sales expanded by around 17 percent, reaching a substantial $8.6 billion.

But that’s just the start.That burgeoning Russian market is predicted to show annual compound growth of almost 21 percent over the next five years, creating a vibrant, major business worth $22.1 billion by 2016. That would put it among the top 10 drugs markets in the world.

Perhaps most important for the world’s big pharma companies, much of this new growth is expected to be driven by imported products or via foreign owned plants and subsidiaries.

No wonder the world’s pharma giants are queuing up to invest there right now. Earlier this month, Swiss-based Novartis broke ground for a new facility in the Novoorlovskaya Special Economic Zone near St. Petersburg. It’s the company’s largest investment in the country so far and by 2014 will be capable of producing 1.5 billion units of both innovative and generic drugs each year.

Meanwhile, the UK's AstraZeneca has followed its $150 million investment in a new plant in Russia’s Kaluga region earlier this year, with new plans to set up a Predictive Science Center, also in St. Petersburg, to develop bio-informatices, data analysis methods, new testing software, and systems to evaluate the safety of any new drugs.

Now's the time to invest it seems. The Russian government is in the process of implementing its Pharma 2020 strategy, designed to boost the local industry so it’s able to create 50 percent of the pharmaceuticals the country will need by the end of the decade.

Is your company bullish about the expanding markets of the Russian Bear? Are you already, or planning to get involved? What opportunities are you focusing on, and what have been the challenges you’ve faced so far?

Written by Paul Tate

Paul Tate is Research Director and Executive Editor with Frost & Sullivan's Manufacturing Leadership Council. He also directs the Manufacturing Leadership Council's Board of Governors, the Council's annual Critical Issues Agenda, and the Manufacturing Leadership Research Panel. Follow us on Twitter: @MfgExecutive


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