The joint venture, called Aurospharma Company, plans to set up a plant in the Podolsk district of the Moscow region, which Aurobindo expects to be operating at full capacity by the end of 2013. The plant will make non-penicillin and non-cephalosporin Rx generics and other drugs that are categorised as OTC drugs in Russia.

The joint venture will also sell penicillins, cephalosporins and other therapy products manufactured by Aurobindo in the markets of Belarus, Kazakhstan and Russia.

Diod manufactures ecological healthcare equipment and nutrition supplements. The company intends to bring to the joint venture its unique long-term experience in selling medicinal drugs and nutrition supplements in Belarus, Kazakhstan and Russia. Diod also has distribution network resources and streamlined channels of interfacing with medical organisations to bring to the joint venture.

Mr Vladimir Tikhonov, CEO of Diod, said ‘the establishment of the joint venture should allow us to become an important player [in] the Russian pharmaceutical market within the target period.’

Aurobindo expects to enrich the joint venture with its successful international experience in manufacturing generics.

Mr Vishnu Sriram, Associate Vice-President, Aurobindo Pharma, expected the joint venture to give Aurobindo ‘an opportunity to localise production in Russia’. He added ‘using the Russian partner’s marketing vision, we will be able to enter the growing and challenging Russian market with greater confidence and expedite our presence in the market.’

The project is in line with the priorities of the Russian Government’s strategy for development of the Russian pharmaceutical industry for the period through 2020 (Pharma 2020 Strategy), which is being implemented by the Russian Ministry of Industry and Trade. The aim of this initiative is to make Russian public healthcare less dependent on import of originator drugs and to move towards locally manufactured generics. Under the Pharma 2020 Strategy, Russia aims to increase local producers’ share of total drug sales from the 20% share recorded in 2010 to 25% by 2012 and 50% by 2020 [1].

According to Russian-American Business, in 2010, the Russian pharmaceutical market was worth 8.6 billion [2]. And with growth in the Russian pharmaceutical market set to far outpace that for western nations this is looking like a very lucrative market to be a part of.

References

1. GaBI Online - Generics and Biosimilars Initiative. Russian drug spending set to reach US$4 billion by 2020 [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2011 October 21]. Available from: www.gabionline.net/Policies-Legislation/Russian-drug-spending-set-to-reach-US-4-billion-by-2020

2. Russian-American Business. Russia’s pharmaceutical market. 23 December 2010.