The Global Pharma Market: Key Trends – VIDEO

  21 October 2022    Read: 646
 The Global Pharma Market: Key Trends –  VIDEO

Larisa Popovich, candidate of biological sciences and Director of the Institute of Health Economics at the National Research University Higher School of Economics in Moscow, goes into detail in her interview to about stockpiling drugs, advantages of Sputnik V, joining efforts to fight orphan diseases and growing domestic production.

- What is the current situation in the global pharmaceuticals market?

‘If we are talking about the development prospects in the global pharmaceuticals market, we must consider the close connection of the market to the situation in the healthcare system. This means that Covid has been the principal influence market in these past two years. It has substantially changed global medicine, stirring the drug industry as well. The pandemic damaged the economy and public health tremendously. On the other hand, it has enriched the vaccine, drug, and medical equipment manufacturers. Previously unnoticed research teams gained recognition, as they managed to discover promising molecules in treating the consequences of Covid. And they were actively acquired by big pharma players, who now had significant resources. As a result, it was the big pharma who came out victorious, having received an impetus for further scientific breakthrough in developing new drugs. More and more producers have started applying to the IPO, as pharma manufacturers increased their capital. Covid vaccines were in great demand. The foreign media was critical about the Russian Sputnik V, which turned out to be not only effectively comparable to the RNA-vaccines such as Moderna and Comirnaty (a vaccine by Pfizer-BioNTech), but also with fewer side effects. I am not paltering here; I have been following all the updates in the field. The prevalence of the Russian vaccine had been largely politicized. Nevertheless, some 80 countries are now using it. The RNA vaccines, meanwhile, were reported to have side effects, so much so that some countries banned them altogether. At the same time, foreign academic periodicals started unexpectedly publishing positive feedback about Sputnik V.

The pandemic certainly made us rapidly introduce many vaccines ignoring standard procedures, tested throughout years. Therefore, as Covid has not yet ended, we will get more data about the consequences of vaccination in the coming year. I personally have fewer concerns about Sputnik V than other vaccines, since I know that Russian scientists have created it, while having studied its analogue since the first SARS coronavirus outbreak in 2002.

But the pharmaceuticals market was not only busy with vaccines. The big pharma has a lot of interesting developments in store in promising areas that the analysts prognosticate to become the most urgent in the immediate future. These are diseases concerning disorders in the immune system, oncology, and psychiatry. We are expecting interesting new introductions on Alzheimer’s disease. We have been observing the presentation of promising molecules to fight destructive diseases of the nervous system and various types of tumours.

Therefore, we might expect impressive breakthrough in cancer immunotherapy quite soon. And of course, we are in for completely new approaches regarding diseases such as multiple sclerosis, meaning ailments that inflict maximum harm on a human and the most economic damage to healthcare systems. So, the global pharm market is developing; it has money; research and innovations are on the way. We are not expecting any major changes in the regulation of drug production in the United States, as there are no predictable changes in the healthcare system. Therefore, the requirements of pharmaceutical regulators are likely to remain the same. The only barrier that might occur is the current global economic crisis.

The economic crisis will certainly affect different fields, but I do not think healthcare will be one of them, because this domain has always been attractive for investment. Economists have a saying that the science of life will be the ‘sixth Kondratiev wave’ for economics. These are industrial super waves which elevate the overall global economic growth onto a new level. The first K-wave was the steam engines, which changed the economic and social landscape in mid-19th century. The second long wave happened in late 19th century with chemical synthesis and new materials. The third was the automotive industry in the 1930s, which noticeable changed the quality of life. The fourth great surge happened in the 60s with the development of aviation and aircraft manufacturing and the sixth in the 2000s with computerization and development of the Internet. The economists now believe that the current development of sciences of life and biotechnology can become the following incentive for ‘pulling’ economic growth and help us out of this crisis.

Despite all the unrest and problems in the world, the healthcare system will continue developing and might even get a new momentum, depending on the global situation. But I would like to repeat myself when I say that all researchers are now focused on problems of psychiatry, neurology, endocrinology, and oncology, while Covid added to our knowledge about immune processes and systematic changes in the body, which we are already managing to cope with through joint efforts. The pool of new knowledge will soon drive us to build integrated and hybrid medical technologies, which will allow us to develop new approaches in treating various diseases. We must understand that Covid affects all organs, therefore we need new and effective drugs for a variety of ailments. And we are waiting for breakthrough discoveries in the global healthcare system.

Covid has changed the usual morbidity structure and substantially increased pathologies of the nervous and emotional-cognitive fields, and they will soon trigger other diseases, which were previously not too widespread. So, we should expect a lot of changes.’

- How have the ongoing global events, such as the Russian-Ukrainian war, the Covid-19 pandemic, global inflation, and the food crisis, influenced the drug prices in Russia?

‘As Russia’s special operation launched in Ukraine, the population grew more alarmed and the demand and prices for pharmaceuticals skyrocketed in March. But Russia boasts an effective, albeit complicated, price control system. We have several segments in the drug market. Firstly, these segments are regulated by the state. These are the essential lifesaving drugs. We have a fixed-price policy for these, and the government strictly monitors and regulates it, including all logistics and retail margins. Since they were indexed according to the inflation during the price revision in late 2021, the prices for them did not increase much, with about 0.2% price growth, amid the March hype. Other than that, Russia has a large segment of state-funded drug supply programs.

They include drugs patients receive in hospitals, during ambulance calls and emergency care. They receive all medicines free of charge. These, in turn, are sourced through tenders, which allows to reduce even the state-fixed prices in a tough competitive environment. Moreover, we also offer drug benefit programs in the outpatient segment for more than 20 million people all over the country. These are veterans, disabled people, large families, and their young children, as well as patients suffering from serious health issues. All of them receive the medicines they need free of charge.

These segments involve both federal and regional budgets. Moreover, HIV/AIDS, hepatitis patients, those who have undergone heart surgery and some categories of pensioners will also receive free pharmaceuticals. The state funds all vaccinations from the national calendar. These drugs are purchased through competitive procedures, which allows keeping the price-surges at bay, regardless of external factors. We also have special programs with patients with rare diseases, also through centralized procurement, where prices can be negotiated with the manufacturer.

The commercial segment, where the prices are regulated by the market, includes drugs outside of the LSD list. There is an approximately 50/50 ratio of regulated and non-regulated drugs. The prices in the non-regulated segment increased from 5 to 12 percent in March because of the panic buying and changes in the supply chain. It is no secret that pharma suppliers faced serious logistical problems. But we have been observing a drop in the prices since early April, just after a few weeks of the hype. Apparently, they were able to find alternative supply chains. Other than that, the government has taken measures to support manufacturers and partly distributors. It has also introduced standards on permitting parallel imports. The compulsory licensing measures are slowly starting to work, albeit still in a soft mode.’

- What about the quality of generic drugs manufactured in Russia? Are they much in demand on the Russian market in the light of the recent global processes?

‘Throughout the Pharma-2020 special program adopted in 2009, we have been putting in a lot of effort into building our own market for pharmaceuticals, destroyed in the 1990s. And Russia has now become a country of generics. 85 percent of drugs sold in the country are generics. Around 80% of these are produced in Russia, either by local manufacturers, or foreign companies who have set up localized production in the country.

The localization of Western pharmaceutical companies in Russia went rather smoothly. Collaboration with these companies have allowed many technologies to gain momentum for development in the Russian Federation. We now how leader companies, who produce quite interesting and innovative drugs. For instance, we have started producing analogues of drugs for spinal muscular atrophy and paroxysmal nocturnal hemoglobinuria. Until very recently, these foreign drugs had been the most expensive ones in the world. Our prices are also much lower. And it is a purely Russian development.

Russia also boasts authentic innovative developments to treat other genetically determined diseases. Western technologies and the local biological school made it possible to get a great base for further development of the pharmaceutical market in Russia back in the early stages of the Pharma-2020 program. We certainly do not produce all medicines locally; no country in the world can fully provide itself with all the necessary drugs, even the USA. My latest observations allow me to say that while treating oncological diseases, the USA can offer its patients somewhat around 75-78%, not all 100, of all molecules available today.

Only 40-50% of these molecules are available in post-soviet countries. Nevertheless, we already have enough good drugs in use and the government funds this field handsomely. Therefore, it would be completely inappropriate to call the situation catastrophic. Western companies do not leave the Russian market despite all problems. The only thing they have done is that a few of them have cut down on marketing support for some of their campaigns and new clinical trials. Some of them are restarting trials, because Russia offers an excellent clinical base for them, which is also noted by the big pharma of the West. We have well-trained doctors and well-equipped medical centres.

We were recently doing a project for specialists in oncohaematology and observing what was happening in the field, such as latest technology in CAR-T cell therapy or using donor blood through applying special methods for component separation. Our doctors have mastered them and perform them in federal clinics. These methods allow completely new opportunities for bone marrow transplantation. The government has made recent drugs available for these patients and we have observed amazing results in paediatric oncology, where mortality is reduced to a minimum. Therefore, oncohaematology offers a crucial, even competitive, demand for Western drug developers for joint research.’

- Which diseases are the most common and critical ones in Russia? What is the situation with drug supply against the most critical diseases?

‘There are two aspects to consider. Critical diseases are those that produce highest mortality around the country. We can also consider diseases that inflict the most economic damage due to high disability and a drop in labour potential as critical. And these make for two completely different lists. They are entirely different for all soviet countries, including ours and yours. If we are talking of mortality, cardiovascular and oncological diseases clearly top the list all over the world, except for the poorest countries, where infections are still the leading causes of death. The third place is secured by external causes, which are not always related to the healthcare system and may be the result of social conditions.

But in terms of healthcare economics, treating cardiovascular diseases require fairly cheap drugs. All countries have an enormous variety of generics and pharma companies usually do not show much interest in heart diseases, because we already have drugs that work well enough. At the same time, the average age of mortality due to cardiovascular diseases is approaching 70. At the end of the day, these are diseases of older age.

Oncology is also considered a disease more prevalent among older population, approaching 70 as well, except some types of tumours such as breast cancer, colorectal cancer, and lung cancer which can also be found among younger people. Nevertheless, a huge number of scientists is riveted to oncology and developers have been adding numerous new molecules into their portfolios. Cancer is a systematic disease that holds the key to many other ailments and the secret to eternal cell life.

Endocrine and immune perturbations are also of largely systemic nature, attracting countless scientists and drug developers. Although these diseases are not the main cause of death, they cause significant economic damage in all countries. We also add them onto the priority list but based on different criteria. However, musculoskeletal diseases cause the most economic damage, albeit with minimal mortality.

I am looking at the disease rating in some post-Soviet countries. Diseases of the musculoskeletal system are on the top of the list in terms of the number of years of lost life in Azerbaijan, Russia, Kyrgyzstan, Armenia, and Kazakhstan. The paradox is that the world does not have a large arsenal of drugs to treat these diseases. There are painkillers, drugs that partially slow down the destruction of cartilage, those that restore the bone tissue to some extent, but still the pharmaceuticals have not advanced much here.’

- Does Russia have a stockpile of medicines for the most common diseases?

‘We do not really need that large of a stockpile, because we produce an enormous quantity of drugs. But we do indeed have a certain dependence on substances, as does the entire world, because China and India are still the main producers of substances globally. Russia has now adopted a strategy until 2030 and taken measures to support full-cycle production. We have started being proactive in expanding substance production. We cannot yet say that we will be able to provide ourselves with domestic substances in all cases, but at least Russia has already replaced supplies from unfriendly countries, which have practically ceased, with either procurement from friendly countries, or with those, produced on our own. Therefore, we do not really require a stockpile.

All the new introductions might not be available in Russia, but we have an arsenal of effective analogues, that we produce for a diverse nosology. We are also counting on having our own original drugs, including in the fields of oncology and immunology, such as the monoclonal antibodies that have been actively applied to treat Covid. They can also be successfully used to treat certain types of cancer and we have already had interesting developments in the field. So far, we do not experience any strong restrictions in procuring drugs, including those yet unregistered in Russia.’

- How do you provide medications for patients with orphan (rare) diseases?

‘We have set up a special charity fund of excess profits of the rich in Russia to procure medications. They are primarily bought for oncological and orphan diseases among children. The fund is constantly replenished. We are talking of multibillion-dollar funds that allow us to purchase drugs, previously inaccessible. The government is trying to procure these drugs in every possible way. We have a mechanism that allows the patient to receive completely new medicine they need, but which are unavailable in the country. If the doctors confirm the need, the fund ensures the procurement abroad and delivery to the patient.’

- How can we elevate cooperation among pharmaceutical companies and medical research institutions of Russia, Azerbaijan, and Central Asia onto a regional level?

‘You know that the EAEU platform operates in the pharmaceuticals field as well. We are transitioning to a single regulatory space for all EAEU states. We have been actively developing collaboration through various channels within the Shanghai Cooperation Organization. We have had interesting developments on vaccines and antiretroviral drugs on the BRICS platform. We interact with the member states constantly. Along with high-level conferences, the ministers of health have been holding annual meetings to discuss the chosen areas of interaction and outline new directions. I believe these three well-proven platforms can serve as a foundation for developing joint efforts in improving life sciences, expanding pharma research and organizing full-cycle production, since we have already moved regulations quite close with these countries.

We can also create a common market for pharmaceuticals, which will significantly boost our positions in negotiations with manufacturers and allow talking about lower prices for many drugs.

I am also in pursuit of my personal holy grail that I have been sharing on all platforms. While treating children with orphan diseases, we must combine both financial resources and clinical bases from different countries into a single pool to find best solutions and increase treatment availability for these children. Having two or three children with orphan diseases is a catastrophe for a small country or region. Their treatment requires huge amounts, which will have to be taken from the majority of the population. The second choice is to leave the child for dead. As a result, the leader of such state or region has a very difficult choice to make.

Why does Russia provide most expensive drugs to treat rare diseases on a federal level? It would be beyond the powers of a single region, who has their own beneficiaries that must be provided for. We can raise this money only through joining efforts throughout the country. Our countries joining efforts at least to help the group of patients with rare diseases could bring about crucial humanitarian benefits and contribute to rapprochement of our positions in other fields as well. Pooling resources into such fund and developing common approaches in treating children with genetic diseases, which occur because of idiopathic causes in absolutely every country, would be a very wise endeavor. Therefore, I believe that we could actively work together in this field, given that we develop a common drug market.

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