New Delhi/Moscow: Efforts by numerous Indian pharmaceutical companies to enter the lucrative $45 billion Russian pharmaceutical market are being hampered by a range of regulatory and business obstacles, as highlighted by the Pharmaceuticals Export Promotion Council of India (Pharmexcil).
Divesh Kumar, Pharmexcil’s Representative in Russia, emphasized, “Compliance with Russia’s stringent pharmaceutical standards and navigating complex registration procedures presents significant challenges for Indian firms. Meeting these standards is not only essential but also time-consuming and costly, posing barriers to market adaptation.”
“Market access remains a common challenge for Indian companies in Russia,” added Kumar. “Navigating the extensive network of diverse distribution channels is complex, particularly without local connections. Language and cultural barriers exacerbate these complexities, hindering effective communication and understanding of local business practices.”
Despite these challenges, several Indian companies are actively seeking to establish themselves in the Russian market. Kumar noted, “Pharmaceutical giants such as Micro Labs, Zydus Lifesciences, Sun Pharma, Akum Drugs, and Dr. Reddy’s are engaging with various regions across Russia, signaling growing interest and investment in the market.”
Moreover, Safecon Lifesciences from Agra recently signed an MOU at SPIEF 2023, committing $120 million to build a pharmaceutical plant in Murmansk. Trident Lifeline Ltd. plans a $20 million investment for a manufacturing plant in the Sakhalin region, while Cadila Pharmaceuticals Ltd. aims to establish an injection manufacturing site with a $100 million investment, according to Pharmexcil.
“Cipla Ltd. is exploring joint ventures, Torrent Pharmaceuticals Ltd. eyes expansion, and Hetero Drug, with a significant presence, is adjusting its strategy to comply with Pharma 2030 by seeking to manufacture 20 products in Russia,” Kumar added. Other players such as Vivimed Lab/Finnosa, Biowelness Lifescience Pvt. Ltd., Sugam Healthare LLP, and SSV Phytopharmaceuticals are also exploring opportunities in Russia’s pharmaceutical sector.
However, the Indian pharmaceutical industry faces challenges related to patent protection, data exclusivity, and intellectual property rights legislation in Russia. Government intervention in pricing strategies and reimbursement policies could also impact profitability and competitiveness.
“Russia’s pharmaceutical market poses challenges due to stringent regulatory requirements, including adherence to Russian Good Manufacturing Practices (GMP) and conducting Bioequivalence, Clinical, and Toxicology studies within Russia,” Kumar explained. The Pharma 2030 law now favors local manufacturers, further complicating matters.
Local manufacturing requirements in Russia add to Indian pharma firms’ expenses, as partnering with local entities or establishing local facilities becomes necessary. Intense competition from multinational and local Russian players, alongside unstable geopolitical and regulatory conditions, adds to uncertainties for businesses, hindering long-term strategic planning.
“To overcome these barriers, Indian pharma companies must adopt a multi-pronged strategic approach,” Kumar suggested. “This could involve forming local partnerships for market insights and regulatory support, developing tailored market strategies, and prioritizing adherence to Russian regulatory standards. Investing in R&D for innovative healthcare products tailored to Russia’s needs and fostering strong relations with Russian regulatory authorities will facilitate smoother business operations and efficient market entry.”
