Tatarstan-Indian pharmaceutical forum: fight for investor, debate about substances and Ayurveda
Naberezhnye Chelny, Zelenodolsk and other municipalities fight for the right to locate an Indian pharmaceutical factory on their territory
Participants of the Tatarstan-Indian Biopharmaceutical Forum told about plans to create a joint venture on 20 November. Two districts of the republic are already fighting for the right to locate an Indian factory manufacturing effective and inexpensive pharmaceutical substances on their territory. Realnoe Vremya's correspondent observed the discussion of prospects of the international business cooperation in pharmaceuticals.
Motto: 'Reasonable and effective'
The Tatarstan-Indian Biopharmaceutical Forum taking place now in Kazan is a direct consequence of the Tatarstan president's visit to India six months ago. Having acquainted with accomplishments of the Indian pharmaceutical industry in the states of Andhra Pradesh and Telangana, Rustam Minnikhanov expressed a keen interest in developing an Indian pharmaceutical cluster and considered this sphere attractive for cooperation. The forum in Kazan became the next step to achieve the real goal – to recreate full-cycle drug production in Russian.
Officials of pharmaceutical companies are representing the Indian side at the forum – they are members of Pharmexil, Pharmaceutical Export Promotion Council of India. As CEO of Pharmexil Ravi Uday Bhaskar stressed in his speech, Indian medications were especially interesting for the Russian consumer, as they combine both a high quality and reasonable price. He says if treatment in India costs $1,000, treatment of the analogous disease in neighbouring Australia might already cost tens of thousands.
Talking about cooperation plans with Indian pharmaceutical companies, Vice Minister of Industry and Trade of Tatarstan Aleksey Savelchev indicated they go beyond the localisation of factories manufacturing pharmaceutic substances by Indian enterprises on the territory of Tatarstan, joint creation and production of innovative drugs and educational projects in Tatarstan were also among priorities. And Kazan State Medical University's Rector Aleksey Sozinov noted that Indian students were already studying at the university and expressed his readiness to not only develop scientific cooperation with Indian scientists but also include an Ayurvedic medicine course designed for needs of future Indian medics to the education programme, but in a remote future.
'You can catch more flies with honey than vinegar'
According to Mr Bhaskar, as one of the biggest generic drug manufacturers and exporters, India, unfortunately, isn't well spread in the Russian market. The country's export market has nowadays gone to $17bn a year. However, CIS countries, including Russia, account for a tiny export share – a bit more than 4%.
Pharmexil's representative gave to understand that India was seriously interested in developing exports to the country where the population, especially an older generation, traditionally trusts the quality of Indian drugs and also localise their pharmaceutical factories in it. However, to make it happen, Ravi Uday Bhaskar claimed that it's necessary to solve a series of problems, including organisational. One of the main tasks today is to simplify registration procedures in the Russian market for Indian pharmaceutical companies. As a source from the republic's Ministry of Industry and Trade said to Realnoe Vremya, the work with Tatarstan representatives in this area is already carried out.
Ready to welcome the investor
After Mr Bhaskar's statement that the big Indian pharmaceutical company Hetero Labs was already present in Tatarstan while Aurobindo Pharma was considering to open a factory in the republic, representatives of both regions of the republic put their cards on the table, so that Indian investors would choose their territory.
''It's very important to choose a site to localise [the factory],'' Deputy Mayor of Naberezhnye Chelny Ildar Timergaliyev started with an unclear hint and explained the advantages of choosing the Kama agglomeration: big and well-educated population, proximity of Begishevo international airport, railway hubs, M-7 Federal Highway, ready communications laid to the land parcels waiting for investors, five-year property and land tax concessions… He even didn't forget to mention developed hotel business and public catering:
''Expats from Germany and China, whose number is very big, can confirm it's comfortable to live and work here!''
Then he added that an investor also should put effort to enjoy the pleasant concessions – to invest at least $83,000 in the enterprise during the first year and create at least 20,000 jobs, that's to say invest at least $830,000 in the project and create at least 30,000 jobs.
''Not only Naberezhnye Chelny but also Zelenodolsk have the status of Priority Social and Economic Development Area, and the concessions there are almost the same, but Kazan is near,'' Aleksey Savelchev noticed and gave the floor to a representative of the Zelenodolsk Municipal Administration. It turned out that Zelenodolsk District offers еру investor two sites to choose for the pharmaceutical factory – Volna or Sviyaga logistical centre…
Then director general of Tatkhimpharpreparary JSC Timur Khannanov offered his own site as base to locate the factory:
''I have two licenses to produce substances and ready-to-use drugs – everything except injections… We're ready for cooperation and contract manufacturing!''
In conclusion, the director general of Pharmedpolis PLC, which has been created this spring for direct attraction and localisation of residents on the territory of the republic, Albert Gaifullin demonstrated possibilities of his site where an investor can choose a parcel right on the computer screen to the Indian guests.
…Later, answering Realnoe Vremya's correspondent's question, Ravi Uday Bhaskar noted that the choice of the address of specific production didn't depend on Pharmexil's representatives but the decisions made at the government level.
'All turns on standards'
Former trade representative of one of the Indian pharmaceutical companies in Tatarstan Nikolay Dolgov served as an expert of Realnoe Vremya. He commented on whether the final consumers – patients – would benefit from the Tatarstan-Indian cooperation in pharmaceuticals.
''There are different quality levels for medications and substances – international, Russian, Indian. The highest standards are in Europe and the USA, they are lower in India and Russia, and they are also different. India mainly manufactures generic drugs, not the basic drugs. The low standards for the domestic Indian market as well as quite reasonable prices for drugs in the domestic market, by the way, can be explained because they need to treat a huge population of the country… When we're talking about the benefit from the localisation of Indian pharmaceutical enterprises in Tatarstan for patients, we should, first of all, understand what standards these enterprises will use when working here. I suppose they won't use the standards applied in India for the domestic market.
In the expert's opinion, not Indian drug production and production of medicinal substances is the main interest for Tatarstan:
''Anybody can crank out pills of a ready-to-use substance. But even European enterprises with very high quality requirements purchase Indian and Chinese substances for their production! In general, all turns on standards, but this area, in my opinion, is more interesting than the production of ready-to-use drugs.
But owner of Ratsiola chain of pharmacies in Tatarstan Sergey Andreyev supposes the production of Indian medicinal substances on the Tatarstan land can't become the starting point that will enable to open a new page in reviving the Russian pharmaceutical industry. In his opinion, the problem is much deeper.
''A medicinal chain starts with laboratories, not the production of substances,'' Andreyev explained his point of view to Realnoe Vremya. ''Chemical formulas are created first, then they are used to make substances and drugs. Creation of formulas is an expensive venture, and Indian partners are unlike to share these formulas. But now it's become a common practice to unite companies to finance laboratories. And the discussion of joint research and developments at the Tatarstan-Indian Biopharmaceutical Forum is a good sign! It's progress towards the beginning of the chain.''
In general, if we really aspire to revive the Russian pharmaceutical industry, we should, first of all, invest in the creation of formulas ourselves, Andreyev is convinced:
''Now the Russian pharmaceutical industry has started to sell, while Russia has always been famous for minds. In the Soviet era, the level of personnel training, the level of science and research laboratories was high, this is why Russia's research base was a world leader. We became outsiders in the damn 90s when we lost the basis, the sector's scientific potential, and we need to restore it.''