15th International Eurasian Pharmaceutical Forum

Protecting the rights of innovators, price regulation, localization of productions: Common drug for the Eurasian pharmaceutical market.

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February 28, 2023 in Almaty started the XIV International Eurasian Pharmaceutical Forum, organized by Adam Smith Eurasia. The event traditionally united the leading players of the industry market in Kazakhstan, Uzbekistan, Belarus, Russia, Kyrgyzstan, Azerbaijan, Moldova, Armenia and Georgia, becoming a platform for an open dialog of more than 350 participants - representatives of government regulators, international and local manufacturers, distributors and pharmacy chains, professional and patient communities.

The forum addressed the key issues of the modern pharmaceutical market in Eurasia: changes in the regulation of the single market, registration and expertise of medicines, pricing policy, market access for innovative drug products, conducting clinical trials in the EAEU, localization opportunities, development of distribution and pharmacy segments, as well as the system of labeling and traceability of medicines. The event was supported by the Ministry of Health of the Republic of Kazakhstan. The general pharmaceutical partner of the Forum was Johnson & Johnson, and the leading pharmaceutical partner was AstraZeneca. The Forum was supported by Proxima Research, Ipharma, Vakhidov & Partners, IQVIA, Global Clinical Trials, Polo, Grata International, Aston Health, Algimed, Sciencefiles, Statandocs, Tukulov & Kassilgov, Sartorius, Dinord, Legalmax, Stellmart, Nextons, Global Clinical Support, Sirius Group, Seamless Legal, AsylPharm, Daribar, Inkar, TeQ.

The business program of the event was opened by a strategic discussion on the practice of adapting pharmaceutical markets to the new economic reality moderated by Viacheslav Lokshin, President of the Association of International Pharmaceutical Manufacturers in the Republic of Kazakhstan. According to him, the past turbulent year of 2022 has changed the balance of power in all major sectors of the economy, which traditionally include pharma. The changes were felt most seriously by the countries of Eurasian Economic Cooperation, particularly Kazakhstan. In the first six months of last year, the pharmaceutical industry of the Republic strengthened by an average of 4.9%. According to the reports of the international company IQVIA, the volume of the local market, at the end of the first three quarters of 2022, increased by 13% year-on-year to 587 billion tenge ($1.28 billion). Domestic manufacturers are noticeably gaining positions - the share of Kazakhstani drugs in the total structure of the pharmaceutical market has approached 20%.

However, the influence of foreign manufacturers is still strong, and this could be a new growth driver for the industry. Reports on the problems of Eurasian markets were made by Erkhat Iskaliev, Chairman of the Board of SK Pharmacia , Alexander Tarishkin, General Director of AstraZeneca in Kazakhstan, Lidia Klyuchareva, Head of the CIS Group at Bayer, Arminas Macevicius, Vice President of the Eurasia region at STADA , Adilet Nazarbayev, Director for CIS countries, Johnson & Johnson in Kazakhstan, and Vladimir Shipkov, Executive Director of AIPM Russia. The key issue of the discussion was the formation of a single drug market in the region, despite the current geopolitical challenges.

"Neither medicine nor pharmacy should be dependent on the realm of politics; their duty is to serve the interests of citizens. And we need to change, to rethink our strategy on a number of issues. Registration of drug products should not take several years. 33 European countries were able to agree on common rules, while we have only 5 countries that have not been able to do the same for 25 years. And it's the consumer who suffers first and foremost."

Viacheslav Lokshin, Association of International Pharmaceutical Manufacturers for the Republic of Kazakhstan

"Within the Eurasian market, the procedure of mutual recognition of drug products practically does not work. In each country, the process is extremely bureaucratic, and individual states deny any changes to simplify procedures. Recognition should be reduced to essentially an automatic procedure, and we need to negotiate."

Vladimir Shipkov, AIPM Russia

"The global pharmaceutical market is showing a positive trend with a CAGR of 19%, by 2026, the market size could exceed $3 trillion. The major trend in the global pharma industry is the strongest growth of the industry. Kazakhstan should be present in this market. We have a good base of manufacturers who are now working to expand their production sites. The President gave an instruction: to reach 50% of the domestic production of pharmaceuticals. This is a matter of national drug safety."

Erkhat Iskaliev, SK Pharmacia

"We are seeing significant positive changes in Kazakhstani medicine. More than five million patients receive guaranteed care under Statutory Free Medical Assistance (SFMA) and Compulsory Social Health Insurance (CSHI). Sometimes they receive such drug products that patients themselves cannot buy at their own expense. This is more than 160 nosologies, which are covered by treatment at the expense of the state budget. The government's share in the market remains at 45%. And I think it's a very good trend."

Adilet Nazarbayev, Johnson & Johnson

"In the CIS countries, the OTC market is growing due to a number of factors, but the hottest issue is prices. Unfortunately, companies are facing unprecedented cost increases. The anti-Russian sanctions, of course, have affected our work, but we have changed the logistical and financial flows, which will now go to the region directly from Europe, and this will be another incentive for the development of pharma in the Eurasian region."

Lidia Klyuchareva, Bayer

"As a leading global manufacturer, we have in our portfolio a large package of medicines for the treatment of oncologic diseases, cardiovascular diseases, rare diseases - virtually the entire list of socially significant diseases. That is why the issues of patients' access to this therapy are especially important for us, and we realize that the current timing of introducing the drug products to the Kazakhstani market must be changed. 3 - 5 years - the current term is a very long time."

Alexander Tarishkin, AstraZeneca

"Last year, several countries, such as Georgia and Moldova, began to rapidly recognize European drug products registrations. The one who will be more adaptable and will be able to adjust faster to crisis situations and will be more successful will be able to provide citizens with their medicines. We plan to strengthen our presence in the Eurasia region to follow our mission."

Arminas Macevicius, Stada

The discussion continued with a plenary discussion devoted to the review of key changes in terms of regulation of the pharmaceutical industry in the Common Economic Space. In September 2022, the Council of the Eurasian Economic Commission (EEC) approved the extension of zero rates of import customs duties and tariff concessions for a number of critical import goods. Raw materials for the production of pharmaceutical and chemical products, as well as drug products, medical equipment and reagents for laboratory tests were among the first to be included in this list. The preferential terms for the transportation of goods are valid until 31 March 2023 and may be extended. The EEU Law also introduced clauses dedicated to accelerated and simplified registration of a number of the most important groups of drug products. The purpose of these changes is the transition from unified principles and rules to unified mechanisms for regulating the pharmaceutical market in the region.

The discussion on regulatory issues brought together representatives of specialized regulators and companies from the EAEU countries: the Eurasian Economic Commission, the Ministries of Health of Kazakhstan, Kyrgyzstan and Belarus, the Union of Professional Pharmaceutical Organizations, ARFP and the National Center for Expertise of Medicines and Medical Devices.

"We have been discussing the idea of creating a common Eurasian space for the pharmaceutical market for many years, many national and supranational documents have been adopted, but so far the process of adapting these new norms - starting from registration of drug products, harmonization of regulatory documents and so on down the chain - is unfortunately going rather poorly. If this process were to move faster, it could move the business forward significantly. That is why today business is even more interested than regulators in making the single space finally work".

Victor Dmitriev, ARFP

"In 2021, a decree on simplified registration of strategic drug products was adopted. 40 drug products have already been registered, with an equal number more in the works. The procedure proved to be timely and in demand, and it is simpler and faster than the procedure under Eurasian rules."

Olga Zhuravleva, Ministry of Health of the Republic of Belarus

"There are significant problems on the registration of drug products. In the national register of the Republic of Kyrgyzstan there are more than 6000 names of medicines, but only 55 applications have been submitted, of which there are none for registration of drug products. These are mostly applications for realignment and 15 for amendments to the registration dossier. Our main goal is to launch a simplified procedure, which is what our country really needs."

Azhar Mambetova, Drug Expertise Department of DLS and MI under the Ministry of Health of the Kyrgyz Republic

The forum was followed by a plenary discussion on price regulation of drug products in the countries of the Eurasian region with the participation of Tatyana Denisik, Deputy Director of the Drug Supply Organization Department of the Ministry of Health of the Republic of Belarus; Zafar Vakhidov, Partner of Vakhidov & Partners; Andrey Kartun, Deputy Minister of Antimonopoly Regulation and Trade of the Republic of Belarus; Olga Korolkova, Deputy Director of the Department of Antimonopoly Regulation of the Eurasian Economic Commission; Mira Tuyakbayeva, Director of the Department of Financial Markets and Other Industries of the Agency for Protection and Development of Competition of the Republic of Kazakhstan; Begimbay Kalybekova, Head of the Pricing and Monitoring Division of the Department of Drug Supply and Medical Equipment of the Ministry of Health of the Kyrgyz Republic; Agzam Nartaev, coordinator on reference pricing system of the Agency for Pharmaceutical Industry Development of the Ministry of Investment, Industry and Trade of the Republic of Uzbekistan and Yerzhan Zhunisov, Deputy Director General for Administrative Issues of the Medical and Pharmaceutical Control Committee of the Ministry of Health of the Republic of Kazakhstan. The participants of the session came to the conclusion that it is necessary to gradually abolish state regulation of drug prices in the EAEU countries. As Mira Tyaukbayeva reminded, since January 10, 2023 in Kazakhstan there is no price regulation for 376 names of medicines, which are sold in pharmacies of the country.

"The current price cap formation procedure remains non-transparent for both government agencies and incumbent businesses. It does not allow to verify both producer and reference country prices and to determine the objectivity of the registered producer price due to the lack of relevant databases. We favor competitive pricing, which is why we initiated the phased deregulation. Taking into account the social importance of our market, we believe that the issue should be approached comprehensively, understanding the level of development of competition and generics production".

Mira Tuyakbayeva, Agency for Protection and Development of Competition of the Republic of Kazakhstan

"Of course, we are now regulating some of the prices, and we are already seeing that there is a certain shortage of some drugs that are on the regulated list. And with the release of prices, the market will regulate itself, including the price will be determined by supply and demand. We hope that after the events of 2020 business understands the situation and the government will not allow sharp price hikes".

Lyazat Kashkimbayeva, Medical and Pharmaceutical Control Committee, Ministry of Health of the Republic of Kazakhstan

"Regulation, of course, remains for the state segment, while in retail, regulation should be transparent to avoid sharp price fluctuations, but at the same time, so that the drugs are on the shelves of drug products, and pharmacists are interested in producing drugs. In our opinion, it is important to automate the deregulation process so that manufacturers are not waiting for orders. With the level of digitalization in Kazakhstan, I believe this can be done without problems."

Zafad Vakhidov, Vakhidov & Partners

Another equally hot topic - access to the market of innovative drugs - was discussed by the speakers of the discussion moderated by Tomasz Klushchinski, Senior Advisor at Vintura Consulting (supported by Johnson & Johnson in the Republic of Kazakhstan). The expert emphasized that careful attention to the protection of the rights of innovators is of particular importance, because it is thanks to the players of the pharmaceutical market that governments learn about the contribution of innovation in increasing the life expectancy of citizens. Representatives of the Ministry of Health of the Republic of Kazakhstan, the Association of International Pharmaceutical Manufacturers of the Republic of Kazakhstan, IQVIA, Janssen, Johnson & Johnson and Infarma Association took part in the discussion.

"There is a common perception that it is too early for countries where the pharmaceutical market is just developing to innovate. But that's far from the case. There are many tools that allow the direction to grow despite the maturity level of the market. For example, revision of the procurement law, greater reliance on data, launch of new drug products. The market is developing at the expense of the players."

Olga Makarova, IQVIA

"We are seeing inequality between countries when it comes to innovation. Kazakhstan has to be included among such countries. To overcome this problem, serious investments in medical infrastructure, collaboration with scientists, and support from government institutions are needed. Access to innovation is critical to public health. Based on observations in recent years, innovations in medicine have had about a 73% impact on increasing the life expectancy of populations in a number of countries."

Sana Musannif, Janssen.

"The barriers to innovation access are plentiful - the delivery system, regulatory barriers, and intellectual property issues. Our goal-setting becomes especially important. It is not possible to take the whole system of one country and adapt it to another. Every case and market is unique."

Vadim Kukava, Infarma Association

"Only 16 out of 160 EMEA-registered drugs are in Kazakhstan. However, this is no reason to sprinkle your head with ashes. Our country is going its own way, and we are ready, firstly, to attract bigpharma to our market, and secondly, to adapt the best global practices for our market".

Saule Yerzhanova Ministry of Healthcare of the Republic of Kazakhstan

One of the final sessions was dedicated to the state of the markets in the past 2022, trends and development prospects in 2023 moderated by Evgenia Lamina, Commercial Director of Avromed. Ekaterina Markova, Director of Proxima Research Kazakhstan , Alexander Ivanov, Head of Strategic Consulting Department of Aston Health, Aziz Kosymkhodzhaev, Board Member of the Association of Representative Offices of Foreign Pharmaceutical Companies and Manufacturers in the Republic of Uzbekistan, Olga Makarova, Head of Russia and CIS IQVIA Consulting Group, and Anna Pogodaeva, Business Development Director of Pharmagate Group of Companies, presented their vision of winning strategies for pharmaceutical market development. To read the reports and online broadcast of all sessions of the forum, please contact Elena Kodess (H.Kodess@as-conf.com).

The first day of the forum's business program was completed by a discussion on the state of the dietary supplements market, growth drivers and specifics of industry regulation. Alexey Petrenko, CEO of EAS Strategies, Mikhail Petrov, Corporate Communications Director of Amway Central Asia and Alexander Zhestkov, Executive Director of SRO SP BAD made presentations. The speakers urged to pay attention to the increasing number of cases of selling "pseudo-BADs" that have not passed state registration and do not meet the criteria of product safety. "Often such products contain medicinal substances and prohibited components, including poisonous, potent and psychotropic substances. Such products are indistinguishable from legal dietary supplements, do not fall under the legislation on labeling, put consumers' health at risk, create conditions for unfair competition for legal producers and are not traceable by the state regulator," stated Alexander Zhestkov. As a solution, the experts proposed to audit the unified register of certificates of conformity in order to identify and cancel unreliable declarations, to exclude the possibility of independent registration of declarations for compliance with the safety requirements of dietary supplements and to accelerate the adoption of draft laws in the EAEU on extrajudicial restriction of access to information on the sale of unregistered dietary supplements and sports nutrition on the Internet.

On the 1st March the discussion of topical problems of the pharmaceutical market will continue. The discussions will focus on finding successful strategies for intellectual property protection for drug products, registration and expert examination of drug products in the EAEU member states, conducting clinical trials, implementation of the system of labeling and tracking of drug products, opportunities for localization of production, development of the distribution and pharmacy segments. At the end of the event, experts will take part in round tables, where they will be able to establish a lively dialog on the most pressing issues and problems of the industry in an informal atmosphere.

We would like to thank the distinguished speakers, delegates, colleagues, partners and media representatives who supported the XIV International Eurasian Pharmaceutical Forum.

See you at new Adam Smith Conferences Eurasia events!