medvedev urges regions to fight...

Russia & CIS: Health and Pharmaceuticals © 2009 by Interfax Ltd. 2, Pervaya Tverskaya-Yamskaya, Moscow, Russia Tel: 250-98-40, fax: 250-97-27, e-mail: [email protected] Internet: www.interfax.com

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Published by Interfax Group

May 18– May 24, 2009 Issue 4 (7)

IN THIS ISSUE

CONTENTS

STATE POLICY AND STATE REGULATION

COVER STORY

TENDERS AND PURCHASES

PRICES AND PRICING

CONSTRUCTION

COMPANY NEWS

RUSSIAN REGIONAL NEWS

CIS NEWS

Medvedev urges regions to fight price-fixing Russian President Dmitry Medvedev urged regional authorities to combat underhand deals between pharmaceutical companies aimed at raising prices.

"Monitoring is needed with the aim of preventing pharmacy networks from setting up corporations of some kind, preventing monopoly agreements on prices for medicines," Medvedev said during a teleconference with his envoy to the Far Eastern Federal District, Viktor Ishayev, and the governor of Primorye region, Sergei Darkin.

"In some regions of Russia a situation is in evidence where prices for basic medicines have risen several times over, and there is no reason for this, neither the exchange rate of the ruble versus the dollar or the euro nor changes in the economic situation. This has nothing to do with the crisis, it is a lot of money grubbing when some companies try to take advantage of you and demand extra money for ordinary medicines," the president said.

"This needs monitoring and punishment, underhand corporate deals of this kind must be nipped in the bud, and law enforcement agencies should get involved," he said.

Darkin said he had a conference with pharmaceutical companies last month and that "it was decided to reduce the retail surcharge for medicines by 10%."

‘Swine flu’ - measures being taken, experts working on vaccine Medvedev says Russia ready to withstand ‘swine flu’

Russian sanitary authorities are controlling the ‘swine flu’ situation, and a national vaccine against the A/H1N1 virus will be created soon, President Dmitry Medvedev told Sergei Brilev, the anchor of the Saturday Vesti program of the Rossiya Channel.

“As for the current situation, our country has a sufficient stock of medicines. If we start the production of the new vaccine, we will be totally immune from [the risk],” he said.

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Russia & CIS: Health and Pharmaceuticals, Issue 4 (7) 2

CONTENTS

Medvedev urges regions to fight price-fixing 1

‘Swine flu’ - measures being taken, experts working on vaccine 1

Medvedev urges state control of drugs market 3

Medvedev vows not to cut funding of priority health programs 4

Medvedev says childbirth certificates improve quality of medical service 5

Medvedev says government won’t cut investments in donors, blood plasma production 5

High-tech Russian medical centers to be audited 6

Minister proposes that global firms make drugs in Russia 6

‘SWINE FLU’ - MEASURES BEING TAKEN, EXPERTS WORKING ON VACCINE (continuation) 8

Ufa health department places order to buy OLYMPUS gastrofiberscope 11

Russian state wants to buy preservative-free flu vaccine 11

SK Pharmacia promises transparency in buying medicines for state institutions 12

Kazakhstan increases purchases of medicines for state medical institutions 13

Is demand for medicines in Russia going down? 14

Penza governor demands taking measures to curb prices for medicines 14

FAS finds no instances of unreasonably high drug prices in Samara region 15

Volgograd intends to freeze prices for drugs 15

Kabardian-Balkarian president demands order be established on local medicines market 16

82 Mln euro pharma plant to be built in Stavropol 17

Yekaterinburg to have affiliate of federal transplantology center 18

Krasnoyarsk to have all-in-one medical center for disabled by late May 18

Sberbank to open 70 Mln ruble credit line to Veropharm 19

Siemens expands cooperation with Kazakhstan 19

Nano-dressing material to be made in Tomsk from 2009 20

Altai pharmacy firms’ experience could help national sector during crisis - governor 21

Magadan governor suggests completing unfinished construction projects 22

Cardiovascular surgery center in Penza to continue operations 22

Russian researchers develop nano-aerosol medicines 23

Yaroslavl region will increase payments to rural doctors 23

Udmurtia intends to aid national insulin producers 24

Kazakhstan capable of providing itself with pharmaceutical, chemical products – Nazarbayev 25

Medicines will be more accessible for rural residents of Belarus 25

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STATE POLICY AND STATE REGULATION

Medvedev urges state control of drugs market Russia's pharmaceutical industry is not in a position to supply enough medicines for the country and the state should control the drug market, President Dmitry Medvedev said.

Prices for medicines are something that "we simply must control because the life and health of millions of our people, both those who have a lot of money and those who, unfortunately, have very little money, depend on the state of the medicines market," Medvedev told the "News on Saturday with Sergei Brilyov" program on Rossiya television.

"It is a task for the entire country," the president said.

Recently "quite effective" moves have been made to put the drugs market in order, "although the crisis has hit this sector extremely hard, because our own medicines make up only approximately 30% of the market and 70% are imported medicines," he said.

"Unfortunately, our pharmaceutical industry is not yet ready for this. And because of this, medicines go up in price if the exchange rate for foreign currency changes," Medvedev said.

"One recalculates in such a way that at times it is simply painful to see the way this is done," he said.

"An increase [in the price of a medicine] is not proportional to a change in the exchange rate for a currency," Medvedev said.

The situation should be monitored at local level "because the whole of our medicines market consists of several segments," Medvedev said.

"The first part is what relates to expensive medications for seven diseases, seven nosologies, as medical personnel say. Another part are so-called additional supplies of medicines that are financed from various sources, including the federal budget, and for which regional administrations are responsible today. This also means tens of billions of rubles," he said.

Planned allocations for medicines for this year are about 80 billion rubles, Medvedev said.

"In this case, it is the task of regional administrations to make sure that those medicines are bought at normal prices, because, according to reports I receive, unfortunately purchases often involve surcharges or, so to speak, an extra reward of 80%, and sometimes 100%, in addition to the factory price," he said.

"This means bribes or in effect a simple increase in price compared with the factory price, an unacceptable increase because there can be no such rewards. Those are processes that anti-monopoly authorities, the prosecution service and other law enforcement structures should take up," Medvedev said.

"It should definitely be fought in the strictest way possible," he said.

A third part are medicines sold in the free market. "This is an unregulated market. There we should monitor the prices that manufacturers declare, and this kind of system is being organized

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at the moment in order not only to have such prices formed in a proper definite way but also to have them publicized so that we can see where such a price comes from," Medvedev said.

"If we are able to regulate the situation in all three components, we will have a normal modern medicines market. I am sure that we will be able to, but this needs to be dealt with at all levels – at federal level, and regional administrations and even municipalities should deal with it as well," he said.

Medvedev vows not to cut funding of priority health programs The current economic situation creates problems for the Russian health care system and forces health authorities to change the tempo of progress in particular areas, President Dmitry Medvedev told Sergei Brilev, the anchor of the Saturday Vesti program on the Rossiya television channel.

“As for the condition of our health care system, I must admit there are certain problems, including those inherited from the past and caused by the economic slowdown. In other words, the condition of our health care system is due to former problems and the current economic situation,” Medvedev said.

“At the same time, not a single priority defined at the beginning of our national Health Care project has been cancelled or even limited in terms of funding. We did not change our plans,” Medvedev said.

The Russian president did not rule out that pace of the development of certain areas might change. “We will promote high-tech medical aid, supply of medicines and other priorities, such as the prevention and treatment of cancer, tuberculosis and cardiovascular diseases,” he said.

The Health Care national project “has been advancing rather well. We certainly have problems, but the general development is rather good,” Medvedev said. For instance, some of the 15 high-tech medical centers are already operational. “Naturally, we will continue this work and launch a number of such centers this year. Apart from that, we are creating 82 regional cardiovascular centers across the country,” he said.

Also, 240 cardiovascular departments will open at national hospitals to increase their total number to 300. “These priorities are invariable,” the president said.

The president highlighted the same subject during his visit to Kirov. Despite the crisis, Russia should not stop pilot health care projects, he said.

“I support further advancement of pilot projects in health care,” the president said at the socioeconomic conference of the Volga Federal District.

Mistakes have been made in certain projects, “but these projects are very useful,” he said.

“We should not stop the experiment,” Medvedev said.

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Medvedev says childbirth certificates improve quality of medical service Childbirth certificates are one of the most successful aspects of the Health Care national projects, President Dmitry Medvedev said. Hopefully, Russia will preserve the nearly 7% increase in the birth rate achieved last year.

“I can tell you that this [childbirth certificates] may be one of the most successful components of the Health Care national project. Over 90% expectant and new mothers have received these certificates,” the president told Sergei Brilev, anchor of the Saturday Vesti program of the Rossiya television channel.

“These certificates increased the funding of health care, including women’s centers, hospitals and maternity homes. They also increased salaries of doctors and nurses,” he said.

“The most important result is the improved quality of medical service. This is a good result,” Medvedev said.

“The birth rate increased by practically 7% last year. Despite the very complicated demographic situation and the general conditions, the birth rate of 6.7% is a rather good indicator, and I hope we can maintain it,” Medvedev said.

Meanwhile, the infant mortality rate is declining, he said. “This is very important, because the infant mortality rate in this country has been a rather complicated problem. It remains such, but some of our regions have rates comparable with the European ones,” Medvedev said.

Medvedev says government won’t cut investments in donors, blood plasma production President Dmitry Medvedev studied the problems of Russian blood donors and the domestic production of blood plasma and promised state support to this industry, while visiting a Rosplasma laboratory under the Federal Health Care and Social Development Service in Kirov.

“We are not going to cut investment because it is the question of life or death,” he said.

A blood preparation plant has been being built on the center’s premises since December 2006.

The new plant, the laboratory and blood plasma centers are the first innovative project of the modern industrial production of virus-safe blood plasma in Russia. Once the project is complete, Russia will stop the imports of such preparations, which are one of the most expensive on the pharmaceutical market.

The plant is almost ready, and its main facilities will be commissioned by the end of this year. The plant will reach its full capacity in 2010, Rosplasma Director General Sergei Levanov told the president.

The plant will process up to 600 tonnes of donor plasma per year.

Medvedev asked how much plasma must be processed to meet the domestic demand.

The World Health Organization recommends 1-1.2 million tonnes per year, Levanon answered.

The cost of the Kirov plant is seven billion rubles, and the money comes from the federal budget, he said.

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While visiting the plant, Medvedev took part in the startup of Russia’s first industrial plasma screening line, which will check donor plasma for blood infections. He personally put in the first set of test tubes carrying donor plasma.

Also, the president was shown a mobile plasma center and spoke to two donors. It takes from 40 to 60 minutes to collect plasma from a donor. Modern technologies separate plasma and return other blood components to the donor.

The president asked how many mobile and stationary plasma centers Russia needed to fully meet the demand. Russia needs hundreds of mobile centers (one center of the kind costs about 30 million rubles) and another 40 stationary centers (the cost of one center is 120-150 million rubles), Levanon said.

Russia already has 14 stationary blood plasma centers, he said.

Medvedev also asked about ways to promote blood donation in Russia.

“This is a material and moral problem. That is a set of problems,” Levanon said.

This requires modern equipment and a positive public attitude to donors, Rosplasma Deputy Director General for Regional Development and Organizational Issues Yevgeny Smetanin said. The media should create an image of donors with the assistance of public figures and popular actors. Also, donors should receive material rewards, he said.

Smetanin suggested establishing the Day of Donor in Russia and celebrate it the same as other professional holidays, such as the Police Day.

“There is no conflict between the two: policemen may also become donors,” Medvedev said with a smile.

High-tech Russian medical centers to be audited The Russian Accounts Chamber is due to audit the use of allocations from the federal budget for the construction and equipment of federal medical high-tech centers in the cities of Penza, Astrakhan, Cheboksary, and Krasnodar in 2009, the chamber said in a report.

The chamber's administration included the audit in the chamber's 2009 plan.

Auditor Vladimir Katrenko will coordinate the audit.

Minister proposes that global firms make drugs in Russia There is a unique chance to arouse interest in the world pharmaceutical business community in organizing the manufacture of medicines in Russia, Russian Industry and Trade Minister Viktor Khristenko said.

Khristenko made his point when he, European Commissioner for Enterprise and Industry Guenter Verheugen, and executives with leading European pharmaceutical companies, were visiting a pharmaceutical research and development center in Khimki, near Moscow, Russian daily newspaper Rossiyskaya Gazeta said.

One of the main initiatives that was put forward was a proposal for exclusive terms of supplies of newly-developed medicines to Russia.

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When the 10-year patent protection for a new type of medicine expires, the company that has developed and manufactures it ceases to be its monopoly seller, others begin to produce the drug under other trade names, and prices for it drop sharply, Rossiyskaya Gazeta said.

The proposed exclusive terms would mean that the producer of a medicine would still have a chance to sell it in Russia on a monopoly basis for a time after the expiry of the 10-year period and that the Russian state would close the Russian market to equivalents produced by others. In return, the original producer would have to organize the manufacture of the drug in Russia.

This is a form of arrangement used by many countries, even nations whose own pharmaceutical business communities are intensively developing new drugs, the newspaper said.

Russia would need changes to its laws to make this possible, however.

The Industry and Trade Ministry also suggests that Russian and foreign pharmaceutical businesses join forces in developing new medicines. Whereas in Europe the entire cycle of creating a new drug costs up to 2 billion euro, in Russia the process may only cost 500 million euro.

So, the ministry argues, it is quite a realistic prospect that pharmaceutical giants will want not only to organize the manufacture of drugs in Russia but also to use the Russian research potential, Rossiyskaya Gazeta said.

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COVER STORY

‘SWINE FLU’ - MEASURES BEING TAKEN, EXPERTS WORKING ON VACCINE (continuation)

Medvedev says Russia ready to withstand ‘swine flu’

“We are generally in control. I think we are ready to withstand this virus,” Medvedev said.

“This is a solvable problem, but we should continue the research and create the mono-vaccine. The whole world is doing that, and I think the vaccine will be ready in the near future,” the president said.

As for sanitary measures taken at Russian airports for passengers arriving from North and South America, the president said, “This is an example of the efficient work of our health authorities and sanitary-epidemiological services.”

“The passenger screening plays into our hands. This is the reason for the rather calm flu situation in our country,” he said.

A number of Russian research centers are working on the A/H1N1 vaccine on the basis of viral samples received from the United States. Russian scientists hope they will have a cure for the dangerous influenza that spread from Mexico within several months.

No ‘swine flu’ cases in Russia – Health and Social Development Ministry

There is no ‘swine flu’ in Russia, and the situation is fully in control, Deputy Health and Social Development Minister Veronika Skvortsova said at the 62nd Meeting of the World Health Assembly in Geneva.

Russia has done its best to keep out the virus, she said. “We are screening passengers who arrive from epidemiologically risky areas. Over 72,000 passengers of more than 1,100 flights have been screened,” she said.

Russia has opened 76 express viral laboratories and five reference labs, she said.

All Russian regions are implementing epidemiological measures. Hospitals are ready to admit possible flu patients, and a reserve of medicines harmful for the A/H1N1 virus has been formed.

The Russian experience may be useful for the international community, Skvortsova said. “Russia is ready to be a coordinating and methodological center for the CIS and other countries,” Skvortsova said.

Output of seasonal flu vaccine may grow a lot in Russia – chief public health official

The output of seasonal flu vaccine in Russia may nearly double because of the A/H1N1 hazard, Russian Chief Public Health Official Gennady Onishchenko told Interfax.

“We had analyzed our national potential and decided that the production of a regular flu vaccine may increase to 47-50 million doses,” he said.

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It was planned to buy 27 million vaccine doses this year, but the medical industry may suggest larger deliveries, he said.

More people than usual should be inoculated against the regular flu and against the ‘swine flu’ background, he said. “Traditionally the government assigns funds for the inoculation of pensioners and schoolchildren,” Onishchenko said.

“We will ask everyone – representatives of regional authorities, businessmen and individuals, i.e. those ineligible for the compulsory inoculation – to evaluate their material status and to receive the inoculation by this flu season,” he said.

“The seasonal flu vaccine will partially create immunity against the new flu, especially as it belongs to the H1N1 type. A cross-immunity will develop, although it won’t be strong,” he said.

Depending on further ‘swine flu’ situation, “Russian doctors will develop a vaccine from viral samples received from U.S. specialists in the beginning of May,” he said.

The work is underway in several Russian research centers.

Onishchenko told Interfax earlier that it would take several months to develop the new vaccine. “In the normal course of events, it takes five months to develop a vaccine. If the works are accelerated, the period may be shorter,” he said.

Onishchenko does not exclude ‘swine flu’ pandemic in case of mutation

The ‘swine flu’ has not become pandemic so far, Russian Chief Public Health Official Gennady Onishchenko told Interfax.

“It would be premature to call the A/H1N1 flu pan-epidemic. Everything will depend on its further genetic drift,” he said.

“Currently, the virus is insufficiently transmissible [from person to person]. If this characteristic changes, we may encounter a pandemic virus,” he said.

Russian medical institutions are being supplied with A/H1N1 diagnostic systems, Onishchenko told the media in St. Petersburg.

“The Central Epidemiology Institute has designed the diagnostic systems. Medical institutions, including those based in St. Petersburg, have started to receive them. The received systems are sufficient for 1,000 tests. That would be the tests for H1N1,” he said.

Russia plans to create its own A/H1N1 vaccine if it does not receive the standard vaccine from the World Health Organization (WHO), Onishchenko said.

“So far, we have received only one viral sample. Laboratories of the UK, Australia, the United States and Japan have a wider choice in their work on the vaccine. It will be easier for us to take [the vaccine] recommended by the WHO,” he said.

The H1N1 California 04/09 received a week ago has been distributed amongst laboratories and the work has begun. Two centers are growing the virus and three are studying diagnostic materials.

“We will have our own vaccine sample, but it will be used if we do not receive certified vaccines from foreign laboratories,” he said.

As for the cost of the research, Onishchenko said, it won’t cost much more than the ‘bird flu’ vaccine. “That is not much. We spent 10-15 million rubles on the H5N1 vaccine. The new spending won’t be much greater,” he said.

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Meanwhile, the Flu Research Institute of the Russian Academy of Medical Sciences said it would not test the H1N1 vaccine on volunteers. “That is absurd. No one is going to hire volunteers for testing the vaccine. That is too dangerous,” an institute source told Interfax.

The source did not say how the vaccine might be tested.

The media said earlier that the St. Petersburg Flu Institute had been hiring volunteers, who would be infected with ‘swine flu.’

The institute received a sample of the H1N1 virus on May 12, an institute source told Interfax. “The customs supplied an ampoule containing powder. We are storing it at minus 75 degrees,” he said.

Institute Director Oleg Kiselyov told Interfax that they would create prospective vaccine samples in three months. It will take another two or two and a half months to test the prospective vaccine and to start the production.

Kazakhstan plans to create its own ‘swine flu’ vaccine

Kazakhstan will work on an A/H1N1 vaccine, Chief Sanitary Official Anatoly Belonog told a press conference in Astana.

“The Education and Science Ministry will be working on an A/H1N1 vaccine,” he said.

The government has drafted a resolution, which approves the anti-flu plan in Kazakhstan, he said.

“This action plan includes proposals for the assignment of funds for the prospective vaccine work,” Belonog said. For instance, it is necessary to buy diagnostic preparations and test systems, to make viral research at the Biotechnologies Center and to design the vaccine, he said.

Belarus to monitor cold and flu patients daily

The Belarusian Health Ministry will tighten cold and flu control over the ‘swine flu’ outbreaks.

“Bearing in mind the global A/H1N1 situation, Belarus has intensified cold and flu control. Health Minister Vasily Zharko has signed the ordinance,” a ministry source told Interfax.

It is planned to monitor the cold and flu rate in 18 cities, the source said.

Three weeks after the ‘swine flu” outbreak in Mexico, Belarus developed a preparation for diagnosing the virus, the source said.

The ministry also tightened sanitary control and prepared for a possible ‘swine flu’ pandemic.

Epidemiological control at Belarusian airports, railroads, customs and border checkpoints has also intensified.

Sanitary and medical services were put on the alert, and constant reserves of hygienic items, anti-flu preparations and disinfectants were formed.

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TENDERS AND PURCHASES

Ufa health department places order to buy OLYMPUS gastrofiberscope The Ufa city health department has placed an order on concluding a contract for the shipment of an OLYMPUS GIF-XPE gastrofiberscope, used to examine the gastrointestinal tract and for performing endoscopies and target tissue biopsies, the Bashkortostan procurement department website reported.

The maximum contract value is 449,000 rubles, and the contract will be financed from the city budget. The device is to be shipped within three days from the moment of conclusion of a municipal contract. The winner of the tender will be selected based on the contract price.

The gastrofiberscope is to be shipped by June 18.

Russian state wants to buy preservative-free flu vaccine There is something new about a planned Russian state tender for the purchase of flu vaccines for autumn 2009 – in addition to planning to buy Grippol, a usual flu vaccine, officials have announced a plan to buy 6.6 million doses of "subunit influenza vaccine without preservatives," as preservatives pose a certain danger if they are part of a vaccine, the newspaper Rossiyskaya Biznez-Gazeta said.

While it has been unable to prove conclusively that there exists any connection between Merthiolate and nervous diseases in children, the World Health Organization recommends that vaccine producers avoid using the preservative (EMEA/CPMP/EG/1194/04).

However, there remains the problem of choosing a preservative-free vaccine.

High technology is needed to remove preservative from vaccine in conformity with world Good Manufacturing Practice (GMP) standards.

In Russia, Grippol Plus, an improved version of Grippol, is so far the only medicine meeting these standards. However, imported inactivated vaccines – Influvac, Agrippal S1, and Inflexal V – meet the same standards, Rossiyskaya Biznes-Gazeta said.

Since Russia has a development and support program for its pharmaceutical industry, and as Russian-produced medicines are cheaper than their foreign counterparts, it is likely that preference will be given to Russian-made vaccines. Citing the Federal Anti-Monopoly Service, the newspaper said that last year the Russian government saved 260 billion rubles (more than $10 billion at the 2008 average exchange rate) on imports.

Citing the Federal Surveillance Service for Consumer Rights and Human Wellbeing, Rossiyskaya Biznes-Gazeta said that, of the total number of Russians vaccinated last year, 18 million were immunized as part of a national project and the other 8.7 million had used other sources of inoculation, such as having their employers organize it or using their own money for it.

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Altogether 18.8% of Russia's population was vaccinated while the minimum acceptable level is believed to be 20%. In other countries, people take greater care of their health – 44% of the population normally have themselves immunized in Germany, 48% in the United States, and 25% in Italy.

SK Pharmacia promises transparency in buying medicines for state institutions The establishment of a system under which the purchase and distribution of medicines in Kazakhstan is to be conducted by the sole distributor, the company SK Pharmacia, will make the process transparent, SK Pharmacia said in a statement.

“The establishment of a transparent procurement system and an efficient transportation and logistics system is among priorities for SK Pharmacia,” it said.

SK Pharmacia set up under a government decree in February 2009 is to act as the sole distributor for purchasing medicines within the guaranteed amount of free medical assistance. SK Pharmacia has been tasked with developing the domestic pharmaceutical industry and increasing its share on the market of state medical services. The company belongs to the Samruk-Kazyna national welfare fund structure.

The company plans to conduct purchases at several stages.

“At the first stage, potential suppliers not complying with tender standards will be given the chance to adjust minor nonconformities with the tender documents,” it said.

The second stage will involve a tender, which “will make it possible to find a distributor offering fair and competitive prices,” the statement says. “The specifics of the purchases is that there can be several distributors,” it said.

SK Pharmacia General Director Vadim Zverkov said the implementation of the project of centralized procurement and distribution of medicines will help make the market transparent and meeting modern standards. In addition, the project should prevent unwarranted growth in prices for medicines, he said.

SK Pharmacia plans to purchase medicines for the second half of 2009 and will attach particular significance to support of domestic producers, the statement says.

At the same time, the company has begun to set up a network of high-technology warehouses “complying with international standards of storage of medicines.”

State procurement in Kazakhstan currently accounts for over 40% of the national pharmaceuticals market valued by experts at 115 billion tenge (150.25 tenge/$1). Domestic producers account for only 10% of the market and the rest is bought abroad.

Kazakhstan’s population is over 15.8 million people.

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Kazakhstan increases purchases of medicines for state medical institutions Kazakhstan is not planning to reduce appropriations for purchases of medicines for state medical institutions in 2009, but will in fact increase them, said Syzdyk Baimukanov, head of the Kazakh Health Ministry’s pharmaceutical control committee.

“This year, the financing of purchases of medicines for state medical institutions has not been reduced but has in fact been increased to 70 billion tenge from 55 billion tenge in 2008,” Baimukanov told a press conference dealing with the opening of the KIHE 2009 medical exhibition in Almaty.

The pilot purchase of medicines by a sole distributor is to begin by the end of May, Baimukanov said. “It is planned that the sole distributor will buy virtually half of all medicines to be bought by the state. This should be within 30 billion-35 billion tenge,” he said.

In addition, the state allocates annually about 25 billion-30 billion tenge to purchase medical equipment for such priority areas as cardiology, tuberculosis treatment, and the reduction of maternal and infant mortality rate, Baimukanov said.

It was reported earlier that the company Samruk-Kazyna Pharmacia set up recently by the Samruk Kazyna national welfare fund will act as the sole distributor purchasing medicines for state medical institutions.

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PRICES AND PRICING

Is demand for medicines in Russia going down? Russian manufacturers produced 17.5 billion rubles' worth of medicines in the first quarter of 2009, which was 1.7% up on the first three months of last year, Russian newspaper Vedomosti said, citing Pharmexpert.

This means a backward step given the fact that Russian-made drugs went up in price about 13% in 2008, Pharmexpert said.

In terms of U.S. dollars, Russian drug makers earned $509.5 million for the first quarter of 2009 or 28.4% less than for the first quarter of last year.

Also in terms of dollars, the market was worth 30% more in winter and spring 2008 than in the same period in 2007.

"We have seen a fall in demand for medicines in the last few months, and, most likely, the industry has reacted to it," said the general director of Nizhpharm, Dmitry Yefimov.

Pharmexpert said the world financial crisis had had a relatively mild impact on Russia's retail pharmacy sales, which - excluding state purchases - grew 32% to 93 billion rubles during the first quarter of 2009. But pharmacies are still selling drugs produced last year, Pharmexpert research director David Melik-Guseinov said.

Nevertheless, retails sales of three of Russia's most popular types of medicines that are domestically produced went down in the first quarter. Those of Arbidol fell 24%, those of Pentalgin 14%, and those of Komplivit 18%.

A spokesman for Pharmstandart, producer of all these medicines, declined to comment on these statistics, saying supplies of these drugs to distributors were increasing.

Melik-Guseinov said the relatively warm last winter might have been the reason for lower sales of antiviral medicines and vitamins and that this category of sales showed an upward trend in the spring, especially after swine flu reports.

Vedomosti cited DSM Group as saying cheaper medicines had gone up in price more than more expensive ones. Prices for drugs costing up to 150 rubles rose 28%, those for drugs costing between 150 and 500 rubles increased 25% and those costing more than 500 rubles went up 20%.

Penza governor demands taking measures to curb prices for medicines Penza region Governor Vasily Bochkaryov has suggested that he treats measures to curb growth in prices for medicines among the regional government’s key obligations to the population.

“Growth in prices comparable to growth in the dollar value can be understood, but when prices go up by 70%, it is outrageous, and this should be dealt with,” Bochkaryov said at a weekly conference.

The governor gave his subordinates one week to look into the issue.

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Anatoly Avdeyev, the head of the Penza regional department of the Federal Antimonopoly Service, said at the conference that the department was analyzing the system of pricing in the region’s pharmacies.

“First results of the inquiries show that there are signs of concerted steps by 10 monopolies in the region,” he said.

Avdeyev said the inquiry was continuing, with information from neighboring regions analyzed.

“Cases can be initiated either into abuse of monopoly status or into concerted actions in pricing,” he said.

Dmitry Semyonov, the head of the regional department of tariff regulation, infrastructure development, and energy saving, said his department was determined to work to have retail markups on medicines reduced.

“Significant reductions have been imposed since May, and we will continue to work to have markups go down even lower,” Semyonov said.

FAS finds no instances of unreasonably high drug prices in Samara region The Russian Federal Anti-Monopoly Service (FAS) territorial branch in the Samara region has detected no irregularities on the regional pharmaceutical market.

The Samara pharmaceutical market is working in highly competitive conditions, a spokesperson for the FAS Samara branch told Interfax.

"Drug prices are formed according to the market mechanism. A survey conducted by our specialists has revealed no instances of unreasonably high drug prices neither last year, nor since the beginning of 2009," the regional FAS official said.

Whereas the required minimum is one pharmacy per 4,000-5,000 residents, the Samara region enjoys one pharmacy per every 2,200 of its residents.

"This is a very good situation. There is no shortage of pharmacies in the region. The market is highly competitive. Moreover, there are nine drug manufacturers and 56 drug wholesale companies in the region," the official said.

According to Samara Statistics, drug prices in the Samara region have risen by 17.9% since the beginning of 2009.

Volgograd intends to freeze prices for drugs The Volgograd city hall is negotiating with trade networks and pharmaceutical retailers for fixing prices for “socially important goods” and medicines in high demand from June 1 to September 1, the Kommersant (Volgograd) newspaper reported.

The city hall explained this move by the desire to support pensioners, students and poor people amid the crisis.

There are 34 entries on the list of medicines, including antibiotics, analgesics, bandaging materials, spasmolytics, and cardiovascular medicines.

Pharmaceutical companies, however, said that they cannot guarantee stable prices because of unpredictable exchange rates, the newspaper reports.

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State unitary enterprise Volgopharm, one of the region’s largest pharmaceutical retailer, reported that it agrees on price fixing with its suppliers. “Positions on wholesale were changing every day in February, and this happened not only with imported medicines but with native medicines as well because the majority of them are produced from imported components,” Volgopharm said.

Kabardian-Balkarian president demands order be established on local medicines market Kabardian-Balkarian President Arsen Kanokov has instructed the State Committee on Tariffs, the local department of the Federal Antimonopoly Service and the local Health Ministry to check how substantiated the prices on some medicines are in the republic.

“Some medicines in our republic are more expensive than in all entities of the Southern Federal District except North Ossetia. And some medicines are sold at half or at one third of the price. What does this tell us? That they are counterfeited,” Kanokov said at a conference in Nalchik.

Kanokov criticized the fact that about 80% of all medicines are supplied to Kabardino-Balkaria by one company, which has become a monopoly on this market.

Zhiraslan Vologirov, the head of the Kabardian-Balkarian State Committee on Tariffs, said the company Edelweiss Holding dominates the market and supplies 78.8% of all medicines in the republic. The other major wholesale distributors of medicines are Miapharm (9.7%), Elepharm (6.1%) and Papashev (5.4%).

As many as 299 pharmacies are holding Kabardian-Balkarian Health Ministry licenses, but only 92 pharmacies whose trade turnover amounted to about 262 million rubles provided reports on their performance to the local department of the Federal Antimonopoly Service in 2008.

Medicines sold in Kabardino-Balkaria are bought mostly outside the republic. The key supplier is the Stavropol territory and its distributing companies, such as Protec-39, Katren, SIA-International Stavropol, and Medchesta-M.

“Because of a small market, there are no direct wholesale shipments from the producers to the republic. As a result, a lot of interim links emerge between the manufacturer and the consumer, which prompts the prices on medicines to go up,” Vologirov said.

“The most common violations of the pricing procedures on the medicines market are those uncovered during the formation of a wholesale price by suppliers located outside the republic,” he said.

“The main problem in state regulation of prices on medicines is the lack of a legal basis. There is no methodology on setting limits of wholesale and retail markups and on applying control procedures. A procedure for determining responsibility of all links in this chain from the manufacturer to the consumer has not been endorsed,” Vologirov said.

The analysis of the situation on the medicines market in Kabardino-Balkaria is complicated by the market players’ actions, Vologirov said. “Taking advantage of the federal law ‘On the protection of rights of legal entities and individual business people during state and municipal control and supervision procedures’, market players are permanently engaged in active reorganization of their activities: they transform and change the organizational legal form of their enterprises, set up subsidiaries, or undergo licensing procedures by changing their activity from wholesale to retail trade in medicines and vice versa. These transformations protect them from inspections by executive control and supervision agencies,” Vologirov said.

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CONSTRUCTION

82 Mln euro pharma plant to be built in Stavropol There are plans to build a plant for manufacturing solid medications and infusion solutions, using the bottle-pack technology, in Stavropol, Alexander Sergeyev, Executive Director at Biokom (one of the authors of the projects, a Pharm Center Group company), told Interfax.

"The investment project is estimated at 82 million euro, of which 45 million will be spent for buying high-tech equipment for the plant. One of the Europe’s leading engineering companies will act as the general contractor," he said.

The construction will begin once sources of funding are identified, Sergeyev said.

"The project implementation period is two years. The project should pay off within five years from the commissioning," said the Biokom executive director, adding that the plant will be built on an allocated site in Stavropol, "which has all necessary communications and engineering infrastructure."

Once the new plant has reached its estimated capacity, the forecast sale of its products will total 433 million euro per year, with 358 million euro of annual net profit, Sergeyev said.

The demand for domestically produced medications has sharply increased, he said.

"There has been a significant increase in the sale of domestic pharmaceutical products since the end of 2008. This is due primarily to the impact of the global financial and economic crisis, which led to the ruble devaluation, as a result of which the ruble price of imported drugs has doubled. At the same time, domestic drug prices increased by no more than 20%," said Sergeyev, adding that "domestic pharmaceutical products are getting more competitive as the consumer’s buying capacity is reducing."

Biokom manufactures 540 million pills and 90 million capsules per year. In 2008, the sale of Biokom’s ready medications totaled 146.8 million rubles, a 28% increase compared to the 2007 indicator.

Biokom has been present on the immunobiological drug market since 1991. Currently, the company specializes in manufacturing solid medications.

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Yekaterinburg to have affiliate of federal transplantology center An affiliate of the Russian Federal Transplantology Center will open on the base of the Sverdlovsk regional clinical hospital No 1.

The affiliate will also service residents of Siberia and the Volga district, Sverdlovsk region public health minister Vladimir Klimin told a briefing.

“We should become an inter-regional transplantology center,” Klimin said.

The regional clinical hospital No 1 transplanted 23 kidneys, eight livers and four hearts in 2008, the minister said.

Krasnoyarsk to have all-in-one medical center for disabled by late May A medical and social examination center for the disabled will open in Krasnoyarsk by late May.

This will be Russia’s first center where the disabled will be able to undergo a comprehensive examination in one place within a day, the Krasnoyarsk territory government reported. “The polyclinics will work two shifts. Its capacity will be up to 500 visits per shift,” the government said.

The rehabilitation unit will occupy a part of the center.

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COMPANY NEWS

Sberbank to open 70 Mln ruble credit line to Veropharm Sberbank (RTS: SBER) will open a non-revolving credit line with a limit of 70 million rubles to Veropharm, the company said in a statement.

The credit line is to be opened under an annual interest rate of 17.8% and will be secured by Veropharm’s property. The money will be spent on compensating for earlier investments and financing current investment projects, including the payment for construction and assembly work, purchases of equipment, and accumulation of working capital.

Veropharm’s aggregate debts to Sberbank on the opened credit lines amount to 735.61 million rubles, which makes up 26% of the balance sheet value of the company’s assets as of January 1, 2009.

Veropharm has three pharmaceutical factories in Belgorod, Voronezh, and Pokrov. The company’s sales amounted to $171.6 million and debts to $21.3 million in 2008.

A controlling stake in Veropharm belongs to Pharmacy Chain 36.6.

Veropharm’s net profit according to international accounting standards in 2008 reached $36.9 million, up by 33% from 2007.

Siemens expands cooperation with Kazakhstan Kazakhstan and Siemens AG are going to continue developing a partnership on modern medical technologies, in particular IT medicine, a memorandum signed in Astana by Kay Zwingenberger of Siemens and deputy chairman of Kazakhstan’s National Medical Holding Beksultan Tutkushev reads.

Joint medical conferences, workshops and educational programs, as well as consultations on medical technologies and service support of Siemens medical system are the main areas of cooperation, the Siemens office in Kazakhstan told Interfax.

It is expected that Siemens will provide equipment but will also teach doctors and fine-tune its maintenance. This will allow to offer medical service of better quality in Kazakhstan.

Siemens works in three sectors in Kazakhstan: industry, energy and health. It has offices in various Kazakh cities including Astana, Almaty, Atyrau, Aktau, Temirtau and Pavlodar. The company’s experts also work in Kamenogorsk, Kostanai, Aktobe, Balkhash and Dzhezkazgan. It has been on the Kazakh market for 15 years.

Siemens has equipped five regional craniological centers with new angiographic systems, installed equipment in the Kazakh Scientific Center of Emergency Medicine, as well as the Astana cancer center.

Siemens’ stock of orders grew to 93.5 billion euro in the 2008 financial year. Company’s revenue exceeded 77.3 billion euro and net profit amounted to almost 5.9 billion euro.

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Nano-dressing material to be made in Tomsk from 2009 OOO Akvazon is expected to launch the production of a new dressing material based on nano-technology before the end of 2009, Sergei Psakhye, the CEO of the Tomsk Research Center of the Russian Academy of Sciences’ Siberian Department, told Interfax.

“A production line is in place and all the required documentation is being readied. The new material is likely to be made and sold from late 2009,” he said.

But prior to that, all the testing, required by the Health and Social Development Ministry, will have to be carried through.

The new material will be made at the same facility that manufactures biological water filters, he added.

Thousands of square meters of nano-dressing material will be produced by the end of the year, according to Psakhye. The material is being developed by the Strength Physics and Materials Science Institute of the Siberian Department, by the Siberian State Medical University and by the Russian Medical Sciences Academy’s Pharmacology Institute.

Earlier reports said that a team of Tomsk researchers had developed a new-generation dressing material, based on the technology used in making biological water filters. A test showed that if this material is dipped into a container with a high concentration of staphylococcus, a sterile solution forms in two-three days.

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RUSSIAN REGIONAL NEWS

Altai pharmacy firms’ experience could help national sector during crisis - governor Altai territory’s experience in producing and selling medicines, as well as bringing them onto the European Union’s market can be used to benefit the Russian pharmaceutical sector, which has found itself in a dire situation due to the ongoing financial crisis, Altai Territory Governor Alexander Karlin told a news conference at the Interfax central office.

“We will present our ideas that will help draw up a draft mid-term development strategy for the pharmaceutical industry of Russia. Moreover, specialists at the level of the heads of the department in charge of these issues have visited our region to study the operations of our pharmaceutical enterprises, ranging from cooperation with the research sector to measures aimed at promoting products of the Altai pharmaceutical industry,” Karlin said.

The territory’s experience is now being studied, said the governor, who is a member of the governmental council for the development of the pharmaceutical sector.

This experience will be applied to other regions, if the authorities find it relevant, he said.

The pharmaceutical industry in Altai territory is based on self-contained production, Karlin said.

“Today, the territory is being viewed as one of the most important areas as far as pharmacology is concerned. The science town of Biisk will house a center incorporating chemical-pharmaceutical and pharmaceutical manufacturers and makers of food products with designated useful qualities,” the governor said.

This center will include the region’s leading enterprises specializing in the production of various groups of medicines and owning exclusive technologies to make medicines from natural raw materials, he said.

Altai territory has already begun securing foreign investment in its pharmaceutical sector, Karlin said.

“We are now working actively to secure foreign capital to establish joint ventures, some of which have already been set up with Canadian and European capital. Altai territory pharmaceutical producers have already used the ideas of leading pharmaceutical companies in Europe and North America,” Karlin said.

“By minimizing the starting period, we receive an opportunity to establish state-of-the-art production enterprises within a short period of time. Altai territory will manufacture popular products, including medicines to treat asthma and diabetes patients, medicines needed by the vulnerable sections of the population,” the governor said.

The territory is moving rapidly to bring its pharmaceutical products onto foreign markets, Karlin said.

“All international agreements signed with Altai territory give top priority to promoting products of the Altai pharmaceutical sector. We have recently signed an agreement with a region of Bulgaria. People there know our products and are interested in larger supplies,” the governor said.

Pharmaceutical products from Altai territory also enjoy demand in regions of France and Germany, he added.

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Magadan governor suggests completing unfinished construction projects The governor of the Magadan region, Nikolai Dudov, has said that before starting to build new hospitals and clinics full funding must be provided for those in construction.

“Only when design and estimate documentation has been prepared and the exact cost of the construction project has been determined can we start building new facilities,” the governor said at a meeting in Magadan. The governor also called for the completion of the general practitioners’ building of the Magadan regional hospital, a new mental hospital and the reconstruction of the Talaya sanatorium, the Sever DV newspaper said.

The region is running eight target health care programs: "A set of measures to counter drug abuse and illicit drug trafficking in the Magadan region in 2007-2009," "Preventing and combating social diseases in the Magadan region in 2007-2010," "The healthy generation of the Magadan region in 2007-2010," "Developing blood donor services in the Magadan region for 2007-2010," "Installing modern medical equipment at state and municipal healthcare institutions in 2007-2012," "Magadan region’ health care staff in 2008-2010," "Implementing high-tech types of surgical aid and intensive care and developing telemedicine in the Magadan region in 2005-2007," and "Health care development in the Magadan region in 2009-2011,"

the governor said.

The region spent over 175 million rubles from its budget under these programs in 2008. In 2009, the region is planning to spend a total of 196 million rubles in funding for the health care programs.

Cardiovascular surgery center in Penza to continue operations The federal cardiovascular surgery center in Penza will receive additional quotas on providing advanced-technology medical aid to 1,000 patients in the near future, the Russian Health and Social Development Ministry reported.

“Media reports alleging that the center is suspending its operations are groundless. This is impossible even in theory. On the contrary, the Health and Social Development Ministry has drafted a decree on adjusting the state quota, which envisions its increase for the Penza center by 1,000 patients,” a ministry official told Interfax.

Dmitry Shutov, a deputy director of the Penza center, said earlier that the establishment could suspend its work because of lack of financing, as the center exhausted the 2009 quota on providing treatment to patients.

However, the Health and Social Development Ministry disagreed with that and said it did not view the situation as critical. “The state quota is formed by the Russian Health and Social Development Ministryfor medical institutions based on regions’ applications. At the end of each year, regions send us applications concerning their needs for funding medical help for the next year,” a ministry official said.

The Health and Social Development Ministry has held a number of conferences with heads of regional health departments regarding the provision of advanced-technology medical help, at which they agreed that the federal cardiovascular surgery center in Penza should better coordinate its work with the regional authorities “in forming the flow of patients,” he said.

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Deputy Health and Social Development Minister Veronica Skvortsova also told journalists that “the center now has a quota for 79 patients to be provided with treatment, and 21 places under this quota are still vacant.”

“The federal center in Penza provides not only advanced-technology but also other types of special medical aid under its charter. To this end, the center has been provided with 325 million rubles in 2009. There is absolute certainty that the center will continue to work efficiently without any pauses,” Skvortsova said.

The Penza center started accepting patients in August 2008. In September-December 2008, 557 patients received high-technology medical help at the center.

“The original state quota for the center was 881 patients in 2009. As many as 802 patients have received treatment at the center in 2009. A decision has been made to increase the state quota to 2,200 patients. The necessary financing under the increased state quota will be forwarded to the center in the near future,” she said.

Russian researchers develop nano-aerosol medicines Researchers at the Novosibirsk University and the Russian Academy of Sciences’ Siberian Branch have developed a method of making medicines in the form of particles the size of a nano-meter (one billionth of a meter). Their efforts have supported by the Russian Foundation for Basic Research and by a multi-subject integrated project, run by the Siberian Branch.

The research centered on the effects of indometacine, a popular antifebrile medicine. But given its numerous side effects, indometacine is prescribed with extreme caution, especially to elderly patients and patients suffering from liver, kidney and intestinal problems, the newspaper Izvestia writes. Aerosol application is a lot more preferable, the more so since when injected by a syringe with a solution, part of the medicine is lost, the newspaper writes.

The expectations were justified and the nano-aerosol proved so effective, that the doze can now be seriously reduced Many of the modern medicines are poorly soluble, so emulgents have to be added to the medicine if injected, which leads to undesirable side effects and overuse of the medicine.

Yaroslavl region will increase payments to rural doctors The Yaroslavl region plans to introduce additional payments to therapists working in rural areas, regional public health and pharmaceutical department head Igor Kagramanian said in the local parliament.

“We plan to introduce them on October 1,” Kagramanian said.

The region will also start to implement a federal program aimed at improving medical assistance to people with vascular diseases this year, he said. “Special centers are being created as part of this program: the regional vascular center on the base of the regional clinic hospital, as well as three primary units on the base of the Yaroslavl hospital No 8, the Rybinsk hospital No 6 and the Uglich central regional hospital. Repairs are underway. Personnel are being prepared,” he said.

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“The system of providing assistance will start to work in full in January. We plan that equipment will delivered and the units will be staffed with personnel in the fourth quarter of the year, and the system of providing medical assistance to patients with heart strokes should start to work under this new technology under the federal program in December,” Kagramanian said.

These four centers will be equipped with the most up-to-date equipment worth over 300 million rubles, 250 million rubles of which will be transferred from the federal budget, he said.

The region intends to join the federal program on assistance to patients with cancer in 2010, he said, adding that the region has already applied and sent a letter to the Russian public health minister hoping to join the federal program in 2010 – 2011. However, the region has already been implementing a cancer program for two years.

“Now together with the federal cancer center we are thinking about how to make our program comply with the parameters of the federal program,” he said.

Udmurtia intends to aid national insulin producers The Public Health Ministry of Russia’s internal republic of Udmurtia will support Russian producers of insulin, republican Public Health Minister Sergei Subbotin said.

There are over 28,000 people with diabetes in the republic, Subbotin said. And its growth rates amounted to 30% in five years, which proves that the region needs a diabetes target program for 2010 – 2012, the Pharmaceutical Bulletin quotes the minister as saying.

The program will get 137 million rubles in financing, which will be distributed among municipalities, Subbotin said.

“Russian medicines approved themselves well, they are quite competitive, and the main thing is that they are cheaper than their foreign counterparts,” the minister said.

Subbotin also confirmed that every contract on insulin deliveries to Udmurtia was signed, he said.

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CIS NEWS

Kazakhstan capable of providing itself with pharmaceutical, chemical products – Nazarbayev Kazakh President Nursultan Nazarbayev said that it is necessary to foster the development of pharmaceutical and chemical industries in the country.

“One should speed up the development of chemical and pharmaceutical industries, which the economy needs badly,” Nazarbayev said at the 12th congress of the Nur Otan ruling party in Astana.

The president also set the task of working on the possibility of building a new pharmaceutical plant. “In the pharmaceutical area, one should work on the issue of building a plant for the production of our own medicines, vaccines, insulin, antibiotics and others within a month,” he said.

“I set a certain task before the government: to secure 50% consumption of medicines thanks to our own production in 2014. This is absolutely real,” Nazarbayev said, pointing out that Kazakhstan now imports 90% of its medicines.

Medicines will be more accessible for rural residents of Belarus Belarusian MPs are discussing the bill amending some Belarusian laws on medicines trade in its second reading.

“The main novelty is that we allowed the selling of medicines in any village which has a district hospital or an ambulance station. Earlier medicines were sold only in paramedic and obstetrician centers,” said head of the Belarusian parliamentary committee for physical culture, family and youth affairs Oleg Velichko.

The novelty will make medicines accessible for rural residents, although usually there is no possibility of opening a drug store in villages, he said.

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