UA RU EN
UKRAINE – STARTUP AND
TECHNOLOGY NEWS

Pharmaceutical business announces its withdrawal from Russia. This is deception and manipulation: a big analysis

Since the outbreak of the war on February 24, hundreds of businesses announced the suspension of work with Russia. Some companies left completely, others stopped new projects and investments.

The pharmaceutical business has chosen a different strategy. Large companies, one by one, started announcing that they would leave the Russian market, but with one condition in place: they are to continue supplying essential medicines to the market, because civilian people need them. 

A study of their activities showed that the statements of pharmaceutical companies do not correspond to reality – they continue to sell everything they can on the Russian market – their entire range of products. After all, no one will check which medicines are publicly available, and without which “ordinary people” will not survive.

But we did. We checked.

The material below is the result of work of the large number of specialists in the pharmaceutical industry, which was initiated by Taras Potichnyi, VP of Expansion at Liki24. A group of pharmacists and doctors have figured out which medicines, produced by international companies, continue to be sold on the territory of Russian Federation. AIN.Capital is publishing the results of the research and explains how the giant international pharmaceutical business continues to work on the Russian market through pure deception, successfully avoiding major reputational losses.


30 Seconds Summary

  • The pharmaceutical business, under the social pressure and fear of sanctions, has made a statement that it’s leaving the russian market. But at the same time, it will continue distributing “vital medicines that have no substitutes.”
  • The list of essential medicines is determined by the WHO. Not every single company separately.
  • A large study of russian pharma market has shown that about 90% of drugs on the market are either not irreplaceable, or being produced at local factories. For example, Bayer continues to sell “Aspirin”, although the Russian Federation has its own local manufacturer – Dalchimpharm and its drug “Acetylsalicylic acid”. The drugs are based on a same active substance – acetylsalicylic acid.
  • International companies continue to cling to the Russian Federation for financial reasons – the size of its market is above $25 billion, with hundreds of millions of dollars invested in marketing and distribution on top of this. Leaving the Russian Federation even for a while means losing leading positions for many international players.

Who determines which medicines are vital?

Since 1977, every 2 years, the World Health Organization (WHO) has been publishing an exclusive list of essential medicines to meet the most important needs in the health system of all countries of the world.

There is such a list for 2021, this is its 22nd edition. You can get acquainted with it here.

The WHO is the most authoritative health organization worldwide. Its conclusions and provisions are considered to be a source of truth among scientists everywhere around the world. There is no reason not to trust them.

What about the Russian market?

About 2,800 active ingredients​​1 and 20,000 medicinal products2 are registered in the Russian Federation (for example, Ibuprom is made on the basis of the active ingredient called Ibuprofen). A significant part of them is not vital, the vast majority of the latter is produced on the territory of the Russian Federation, satisfying the needs of the local population. How was it defined?

The team of experts investigated the Russian market and did the analysis against the latest WHO regulations. As a result, the document ‘WHO essential meds production in russia’ was created, which analyzes in detail the capacities of the Russian Federation for the production of vital medicines compared to their import.

In short, there is a total of 6937 medicines defined, which contain 666 active ingredients, including those:

  • produced and imported to the Russian Federation – 361 (54%);
  • not produced or imported into the territory of the Russian Federation – 174 (26%);
  • produced, but not imported into the Russian Federation – 44 (7%);
  • imported, but not produced in the Russian Federation – 87 (13%).

What does it mean?

From the WHO List, only 13% of active ingredients are indispensable (not produced, but only imported) for the Russian Federation. Of all the registered active ingredients, this is about 3%.

Thus, the justification, being made by pharmaceutical companies for their actions to continue the supply of medicines to the territory of the Russian Federation to provide vital medicines, is not true.

Specific examples

Let’s take a look at a few specific examples of how large international companies are acting in a way that is inconsistent with their public statements.

  1. Active ingredient – Loperamide.

Johnson & Johnson supplies a medicine called Imodium to the Russian market. And it does not stop supplying it, although the local market has its own manufacturer – FP Obolenskoye with the drug “Diara”

  1. Active ingredient – Acetylsalicylic acid.

Bayer has been investing in the world-famous Aspirin brand for many years and continues to supply it to the Russian market. At the same time, the local market has its own manufacturer – Dalchimpharm and its drug “Acetylsalicylic acid”.

  1. Active ingredient – Paracetamol.

The British company GSK (which was recently planned to be acquired by Pfizer for $68 billion) supplies Panadol GSK to the Russian market. It is not unique – the local manufacturer Velfarm makes its own medicine with the simple name “Paracetamol Velpharm”.

As you can see, American and European companies continue to supply the Russian market with drugs that are not unique or vitally needed. Almost all medicines have substitutes.

Why is this happening?

For decades, Pfizer, Bayer, GSK, and others have invested tens of millions of dollars in advertising and promoting their products. The companies were doing their best to ensure that the local Russian buyer would spend his money on their medicines instead of the local analogues. And the efforts are being rewarded. For example, Pfizer’s revenue from the Russian market makes 0.5% of the global one. In 2021, Pfizer’s global revenue amounted to $82 billion, which means $410 million came from the Russian Federation. Huge number, yet not the highest one. In March 2021, the German company Bayer earned 4.7 billion rubles or about $70 million on the Russian market. It is not surprising that Germany is so slow with saying goodbye to the Russian market.

We managed to identify the volume of the Russian pharmaceutical market for 2020. Its volume is 2 trillion rubles, or $28 billion according to the exchange rate of 2021, when the study was compiled. European and American companies earning billions there are reluctant to leave the market, especially after many years of huge investments in business and marketing.

That is why they are ready to turn a blind eye to everything that the Russian army does in Ukraine in exchange for income from the Russian market.

How was the study conducted?

The basis comes from the 22nd WHO Indicative List of Essential Medicines 2021 (List) (columns A, B, C in the Document). Link to the List: https://www.who.int/publications/i/item/WHO-MHP-HPS-EML-2021.02

  • The document is structured by groups and subgroups of medicines
  • The document also takes into account the medicines provided for in the List, which are therapeutic alternatives4 of the main ones5*
  • Specific, regional and some other subgroups have been removed from the list:

** Medicines and vaccines for the treatment and prevention of tropical diseases (e.g. malaria)

**Certain blood products (platelets, red blood cells, whole blood)

**Chlorine disinfectants

**Mineral solutions for rehydration

**Solutions for peritoneal dialysis

**Some multivitamins

  • Additionally, duplicate names of medicines from those categories where they appear repeatedly in the List, have been removed.
  • Columns D and E have been supplemented with data according to the State Register of Medicines of Russia as of 03/28/22, namely:

**the total number of medicinal products registered in the Russian Federation with the corresponding active ingredient (column E)
** the total number of medicinal products registered in the Russian Federation with the corresponding active ingredient and manufactured in Russia (column D), except for cases when the drug only passes final quality control in Russia or is only packaged in Russia.

*In upcoming versions, medicinal products in the Document will be divided into essential and those belonging to their therapeutic alternative. Such a distribution will make it possible to show that an even smaller number of medicines are indispensable for Russia.

(1) Active ingredient (active pharmaceutical ingredient) – any substance or mixture of substances used in the manufacture of a medicinal product and exerting a therapeutic effect. Each active ingredient has a unique name that is recommended and approved by WHO – an international non-proprietary name (for example, dexamethasone, azithromycin, bisoprolol, etc.)

(2) Medicinal product (drugs, drugs, medicaments) – an active substance or a mixture of substances in a form convenient for use (tablets, ointments, injection solutions, etc.) used for the prevention, diagnosis and treatment of diseases (for example, panadol , citramon, aspirin). Each drug containing the same active ingredient has its own unique trade name for each specific manufacturer (for example, diclofenac sodium – diclak, voltaren, dicloberl, etc.)

(3) Essential drugs – see main drugs

(4) Therapeutic alternative to essential drugs – medicines from different manufacturers that have a therapeutic effect and safety profile similar to the main drugs and are interchangeable with each other and with the main drugs

(5) Essential drugs are life-saving drugs that should meet the needs of the majority of the population for the prevention, diagnosis and treatment of the most common infectious, chronic and surgical diseases.

Search