19 june 2008

Russian Prime Minister Vladimir Putin addressed a meeting on drug production in the city of Kursk

Vladimir Putin

Meeting on drug production

"In fact it amounts to creating a general system of insurance for the provision of drugs. Under the system, the state will subsidise part of the price of the drug dose. But for this system to work we have to assess all the financial outlays, complete the development of standards of medical assistance and introduce the necessary monitoring system including, of course, quality assurance. It is necessary to protect the market from inferior and counterfeit products".

Vladimir Putin's opening remarks:

Dear colleagues,

Today we are to discuss the prospects of the domestic pharmaceutical industry.

The issue is directly relevant to the health of our citizens and the development of modern medical care.

Medicines, their affordability and quality have traditionally been a sensitive topic, especially for those who suffer from chronic diseases, for elderly people and children.

The Russian pharmaceutical market is growing at an average rate of 20% a year. Last year it was worth 285 billion roubles.

However, we still lag behind leading countries in terms of consumption of medicines. Unfortunately, the reason is not that we are healthier. The reason lies elsewhere. The reason is that many people simply cannot afford the imported drugs that they need; they are too expensive.

In the last three years, partly thanks to a series of measures under federal programmes, we have achieved some progress. Under the programme of additional provision for drugs, 164 billion roubles worth of medicine have been purchased.

It helped tens of thousands of fellow citizens to recover and lead a normal life. There are more opportunities to use the most modern innovative drugs at the outpatient stage of treatment.

I would like to mention the proposal made by some regions to expand the list of medical conditions that entitle the sufferer to government-subsidised medicine prices.

The issue has been raised in a timely manner. But I think we should take a broader view of the problem and I suggest that as part of the reform of the health service we consider targeted co-financing for the cost of buying drugs in pharmacies.

In fact it amounts to including medicines in the general insurance system, so that the state will partially cover the cost of prescribed medicines. But for this system to work we have to assess all the financial outlays, complete the development of  healthcare standards and introduce a monitoring system, including, of course, a quality control of medicines. It is necessary to protect the market from low quality and counterfeit medicines.

I would like to stress this point. It is a problem in our country and we must address it.

Of course, the funding that we direct into the health service must contribute to the development of our own pharmaceutical industry.

Today we visited an enterprise and I was told that the share of domestic products in our home market has not been changing. The slides that we saw show that it is nearly 70%, you had 68% there (addressing Viktor Khristenko), but in cost terms, it is not more than 20%. What does that show? It shows that our producers have been confined to the niche of cheap, low-tech medicines. What are they? Iodine, green antiseptic, bandaging and so on.

What should be done to reverse the situation and make better use of the production and scientific potential in the country?

First, it is necessary to speed up the introduction of modern world production standards, that is, GMP standards.

Most of our pharmaceuticals still don't live up to this standard, but they continue to produce medicines and to be financed out of the budget. Most of the time these low-cost products are procured from such enterprises rather than from those that have invested in reconstruction.

Unfortunately, this is a common situation. We witnessed it in the procurement of vaccines for the National Vaccination Calendar.

What does this imply? It means that the state finances the "conservation" of a technologically backward sector.

The new standard of pharmaceutical production must be mandatory for all. That will create an incentive for business to modernise. And no less importantly, it will enable our products to break into world markets.

I understand that it is a challenge, we know how difficult it is and how closed the markets are. But it is possible and it must be done.

Let me remind you that the corresponding instructions have been given and formulated. Special meetings and conferences on this topic have been numerous. But in practice things are not moving forward. I would like to hear from you on this subject today. I would like to hear what concrete steps are being taken to rectify the situation.

Secondly, the state must formulate long-term goals for the market participants and provide producers with a clear picture of what medicines and amounts will be procured with the budget money. It is an important and necessary indicator, including for potential investors.

Third. The relevant agencies and sectoral associations must work jointly to ensure a balanced development of the market. They must coordinate the building and reconstruction of enterprises in order, on the one hand, to respond promptly to the changes in demand and, on the other, to prevent an over-production crisis.

On the whole, as we have agreed, it is necessary to finalise the comprehensive long-term strategy for the pharmaceutical industry. It must include the basic goals and a set of possible support measures. They can be very diverse. We spoke about it with Viktor Vladimirovich today: the measures may include customs and tariff policy or direct intervention of the state. For example, the government can finance R&D in the development of modern medicines.

I suggest that we get down to business. I give the floor to Viktor Khristenko.