Nycomed to invest in Russian manufacturing facility

pharmafile | July 21, 2009 | News story | Manufacturing and Production Nycomed, Russia 

Swiss pharmaceutical company Nycomed is already a big player in the Russian drug market, and looks set to consolidate that position with a 60 million euro investment in a new manufacturing facility.

The location of the facility has not yet been established, but it will manufacture active pharmaceutical ingredients and finished dosage forms. Nycomed will be among the first overseas manufacturers to produce APIs in Russia, a Nycomed spokesperson confirmed to Pharmafocus.

Nycomed said its Russian unit saw sales reach $243 million last year, a near tenfold increase over its revenues at the start of the decade and around 23% up on 2007, in line with the burgeoning growth of the overall Russian drugs market over that period. Last year Nycomed Russia-CIS accounted for almost 10% of the Nycomed group's total turnover.

Research published by Espicom earlier this year indicated that the Russian pharmaceuticals market was worth $10.5 billion in 2008, with per-capita spend on medicines still fairly low at $74.

A recent fallback in Russia's Gross Domestic Product (GDP) is likely to peg growth back a little, but the report is still predicting the market to expand by nearly 12% a year to $18 billion by 2013. Over the same period per-capita spending should increase to $129.

A large proportion of Russia's domestic industry is still held back by outdated production facilities and elderly product portfolios, and this has meant that foreign drugmakers have captured around three quarters of the pharmaceuticals market.

In an attempt to boost the local industry, last December the Russian Ministry of Industry and Trade said it would buy imported pharmaceuticals only if they were offered at a 15% discount to existing domestic analogues.

However, the decree included a clause that said foreign companies electing to build plants in Russia would enjoy the same pricing structure as domestic companies. So with its new facility, Nycomed not only cements its position in the Russian market but also gains a competitive advantage over some of its rivals.

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