Big Pharma and Russia: an insurmountable addiction?

Svetlana Sinyavskaya, STRF.ruPhoto: Dmitry Europin

At the beginning of the XX century, changes took place in the pharmaceutical industry — its center moved from Germany, which was the leader in the production of medicines until 1914, to the United States. The beginning of the XXI century may well become a new starting point for pharma. The expiration of blockbuster patents is changing the paradigm of the industry, which can become especially noticeable in the context of the financial crisis. Mikhail Getman, author of the popular monograph "Big Pharma", shares his opinion on the development of domestic pharmaceuticals with STRF.

Reference:
Getman Mikhail Alexandrovich, Chairman of the Supervisory Board of the Non-profit Partnership "National Pharmaceutical Inspection", leading researcher at the Laboratory of Pharmacoeconomics of the Research Institute of Pharmacy of the I.M. Sechenov Moscow Medical Academy. Candidate of Pharmaceutical Sciences. From 1991 to 2004, he held senior positions in both Russian and Western pharmaceutical companies. In 2004-2007, he worked as an adviser to the head of the Federal Service for Supervision of Healthcare and Social Development. Supervised the issues of administrative reform and improvement of administrative practice. During the Hetman's work in the civil service, his efforts have developed and introduced several bills and draft resolutions of the Government of the Russian Federation, as well as 20 administrative regulations on control in the field of healthcare and social development, which have completely updated the regulatory legal regulation in this area. Under the leadership of Mikhail Getman, Roszdravnadzor for the first time in the structure of this authority established an internal audit service, a set of anti-corruption measures, developed and implemented an innovative scheme for denationalizing some control functions.

The pharmaceutical industry today does not just produce pills, it has become a real tool in the political struggle. It's not just the billions of dollars that pharmaceutical corporations spend on lobbying their interests through political institutions and key persons regulating health policy. Big Pharma has a huge potential to influence public opinion. After leaving the civil service, Mikhail Getman can freely talk about this:

— Today, in all countries, pharma has serious levers of influence on politicians due to the fact that it can very effectively influence public opinion in its own interests. Moreover, it is much easier to manipulate through pharma than through medicine — medicine is fragmented, and big pharma is two dozen hypercorporations with a vertical decision—making system. For example, it cannot be ruled out that George Bush got his first presidential term largely thanks to pharma. In 2000, as you remember, there was a strong competition between him and Candidate Gore. Several hundred victorious votes for Bush were cast by the state of Florida, a stronghold of pharmaceutical companies. There are many social institutions for the elderly who believe in American pharma, as it supplies them with free medicines. That's why they vote the way pharma says. Let me remind you that in those years, the political platform of the Democratic Party provided for the possibility of introducing control over drug prices in the United States. Naturally, Pharma chose the lesser evil, that is, the Republican Party.

It is logical that pharma also chooses a protectionist policy. According to Mikhail Getman, drug manufacturers in Russia need to get rid of the illusion of entering the world market through exports.

— This will never happen! The administrative barriers that stand at the entrance to the largest markets on the planet — the United States, the EU and Japan — are not technological, but exclusively political in nature. A Chinese, Indian or Russian company will never receive an export quota to these markets. You will say: "Wait, we know that the Indian company Dr. Reddy's trades in the European Union, in the USA." It sells, but does not export products, but produces them on the territory of the target markets. The only viable way to enter the international market is to acquire specialized assets. The factory you bought in Germany is German, but it belongs to you. After all, no one will stop buying Land Rover cars because today this brand belongs to an Indian company.

In Russia, all borders are open to big pharma, although in the foreign press there are complaints from pharmaceutical giants about the difficulties of working in our country. These difficulties, however, did not prevent foreign drug manufacturers from grabbing a considerable share of the domestic market. This happened back in 2000, when Russian pharmaceutical companies were suffering from an overproduction crisis (so "unexpectedly" market relations appeared).

Now there is a paradoxical situation: even legally, it is much easier for foreign companies to work in our market than for Russian ones. Customs duties in Russia are only 10%, while in China — 40%.

In order to radically change the state of affairs in healthcare and the pharmaceutical industry, words from the power tribunes are not enough, political will is needed.

— Foreign pharma does not want to work in Russia according to the rules by which it works in America or in Europe. She is not interested in being under the full jurisdiction of the Russian Federation and being responsible. Large corporations do not disclose details of their financial transactions, including those that are clearly corrupt. In this case, I am talking not only and not so much about corrupt officials, but about the total corruption of the entire Russian healthcare system. Kickbacks or commissions that doctors in Russia receive from big pharma are huge. And although each company has different codes and anti-corruption rules, in fact it all happens through intermediaries, and everyone is well aware of this. Domestic companies are not involved in corruption of this scale, they are more open and work within the framework of Russian legislation.There is no doubt that the activities of both Russian and especially foreign companies, their reporting should be open at all stages of their activities, starting from preclinical trials and ending with marketing research.

— Conducting clinical trials in Russia is a whole story. Our country, in fact, has turned into a kind of vivarium, where patients are used to conduct research, the benefits of which are felt not by Russian citizens, but by patients in America and Western Europe.

Clinical trials conducted by big pharma in Russia are not transparent, reporting is not provided, and the ethics of many studies can be questioned. The tests are not carried out in accordance with the protocols that receive approval and permission from Roszdravnadzor, there is simply no proper control. At the end of my public service, I began to deal with these issues, but this caused violent opposition from Western companies. Today I understand the background.

Mikhail Getman is convinced that they are trying to force Russia to accept conditions that are obviously not favorable to it, making it dependent on foreign pharma. The danger of this dependence should be considered in the context of the fact that pharma today is the strongest lever of influence on the social situation in any country.

— Our healthcare depends too much on foreign pharma. And even not so much in the context of the personal interests of prescribing doctors, as organizationally. The situation is serious, and the top officials of the state should make a principled decision, including a ban on the fulfillment of those requirements of foreign partners that diverge from the interests of the Russian Federation. Joining the WTO will not affect Russian pharma in any way, so I don't see any point in following what the American partners insist on in this area. If there is a balance of interests in the metallurgical, raw materials industry, energy, and fuel sector, then it must be adhered to. But why deliberately restrict the access of Russian patients to cheaper medicines?

There are many questions of this kind. Why does the state prefer to spend money on foreign diagnostic equipment, which requires "their" expensive reagents? (Often, due to a lack of funds for the regular purchase of reagents, expensive imported equipment is idle.) It is obvious that by purchasing medicine, a diagnostic device or a set of reagents from a domestic manufacturer within the framework of the same national project, the state creates a resource for the further development of this enterprise, makes it possible to conduct and implement new developments. If, of course, the state has the task of developing the industry, and not just mindlessly spending taxpayers' money, who, by the way, see the main advantage of Russian drugs in their safety.

According to a study conducted by the Russian representative office of the international company GfK Group at the end of 2007, "almost half of the respondents [49%] stated that they prefer to buy and use [medicinal] preparations from Russian manufacturers. About 44% consider Russian drugs safer than imported ones, and 40% are satisfied with the price—quality ratio of Russian drugs. However, only 35% consider Russian drugs more effective than imported ones."

Domestic pharmaceuticals, therefore, has a certain credibility with the Russian consumer. It turns out that in order to win back our own market, our companies need to strengthen promotional, marketing and other activities.

With the promotional activity of big pharma, everything is in order — about two-thirds of a billion dollars (namely, how much is spent on obtaining a new drug) is spent not on creating new molecules, but on marketing research and promotion of the drug. It should be noted that this has already been talked about in the press.

— Not so long ago I read an interview with Andrey Ivashchenko from Himrar on this topic. He is certainly right, but apparently he tried to be politically correct. Since political correctness is not my path, I will say it bluntly. In fact, the costs that pharmaceutical companies declare as innovation costs are dominated not by research at all, but by administrative costs, marketing and corruption. Judge for yourself. 10 years ago, the creation of a new drug cost industry leaders 50-100 million dollars, and now a billion. Where did it come from? There was no inflation of this scale… To create a new product for several tens of millions of dollars is more than realistic.

Are all medicines created in the world today innovative? If by innovation we mean something better or different in relation to what has already been, then yes. But if we study in detail 20-30 new products released by international pharma, it turns out that 90% of products (and sometimes more) are so-called me-too products. That is, pharmaceutical companies master an already well-known market segment, reproduce and exploit already known solutions or create "lifestyle" drugs.

The Russian pharmaceutical industry, according to its Development Strategy, faces the task of creating 200 innovative medicines. Is this goal achievable? And where does the main potential of innovation for Russia lie?

— With the exception of the creation of fundamentally new molecules, there is a great potential for innovation in the creation of delivery technologies, increasing the effectiveness of drugs due to it or achieving new therapeutic effects. In addition, the improvement of delivery technologies is a much less costly mechanism than the creation of fundamentally new molecules, since the basic properties of the product are known. For Russian developers, it is the improvement of well-known medicines that is a serious resource for increasing their profitability and strengthening their competitive potential.

Today we are facing very serious historical challenges. The global economic crisis that has begun cannot but hurt the farm. When this inevitably happens, the healthcare system will inevitably collapse — for the reason that the largest companies have been exploiting the so-called blockbuster model for a long time, creating products with exceptionally huge commercial potential. On the one hand, they thereby optimized the management system and their own costs, on the other hand, they made themselves dependent on it. For example, Pfizer — still number one on the planet — will lose the next five patented products in the next two years. If you look at the stock quotes of pharmaceutical companies, we will see that almost nothing has happened to generic firms, but the shares of companies dominating the innovation market have steadily crept down. So, over the past year, Pfizer has lost almost 40% of the value of its shares and will probably soon be bankrupt, while Israeli Teva has lost almost nothing.

We need to determine what really gives fast and high returns, and what is stable healthcare (and therefore social stability). Therefore, it seems to me, taking into account the current situation, it is necessary to adjust to a certain extent, including the strategic imperatives laid down in Pharma 2020, to make it more moderate. I repeat, the stability of pharma and healthcare depend on generics and their improvement. But this does not mean that you need to forget about creating new molecules.

In Russia, the system of applied biomedical research is fragmented and ineffective. A number of companies prefer to order research abroad because they do not believe in the effectiveness of domestic research centers. The Academy of Medical Sciences is engaged in anything but applied medical research for pharma. Therefore, in order to make an impetus to the innovation of Russian products, it is absolutely necessary to make both organizational and investment efforts in the field of applied scientific research. This may be the organization of clusters, technoparks, reorganization of the system of relations between universities, academic institutions, public-private partnerships, etc. This needs to be done because the field of applied pharmaceutical research has lagged significantly more than the entire industry of drug production in Russia.