Russia: Needs to Invest in Cold Chain Infrastructure for Biopharma to Grow

If Russia is to truly capitalise on this interest from big players within the pharmaceutical industry it will need to invest in its infrastructure, including its cold chain – an asset which will become ever more important as biopharmaceuticals develop. Even within the domestic market, the country is so vast and varied a wide number of logistical challenges are presented.

According to a recent report by Datamonitor entitled Russia Pharmaceutical Market Overview Pharma companies target Russia despite the challenges it presents,: "The Russian pharmaceutical market generated $10.1 billion in sales in 2009, growing by 14.5% between 2008 and 2009".

Recent investment in Russia

Foreign companies continue to dominate the Russian market, with Novartis/Sandoz/Lek, Bayer Schering, Sanofi-Aventis and Servier/Egis positioned as the leading multinationals
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GlaxoSmithKline (GSK) and JSC Binnopharm recently signed a deal which will see the local secondary production of GSK Vaccines in Russia.

Under the agreement GSK will provide the bulk vaccine and technology to allow Binnopharm to conduct secondary manufacturing functions such as filing and packaging. The latter will be responsible for meeting international Good Manufacturing Practice guidelines and gaining regulatory approval.

It is hoped that the project will aid in the assistance of the modernisation of the National Immunisation Calendar, to include inoculating against human papillomavirus (HPV), rotavirus and Streptococcus pneumonia.

In 2010 Novo Nordisk announced its intention to build an insulin plant in the Kaluga region, with an investment of $80 million (£50.6 million) to $100 million, which is due to be up and running this year. The new development will form part of a pharmaceutical cluster in the region.

Novo Nordisk officials previously told Reuters it believes growth in the Russian market for insulin in the coming years could be comparable with that seen in China.

These projects provide just a snapshot of what is in store for the Russian pharmaceutical market in the coming years, but if either are to succeed an effective cold chain will be needed.

Improving infrastructure

The issue with expanding the pharmaceutical industry in Russia is the infrastructure to support it needs to be updated.

Improving the aging infrastructure of the pharmaceutical industry is among the key priorities.

Deputy industry and trade minister Denis Manturov told the news provider: "There's a lag in the technological development of facilities needed to manufacture competitive products in accordance with international standards."

Some $5.84 billion is set to be invested in the infrastructure, research and development, training and the introduction of GMP guidelines in the coming years.

Jostein Davidsen, managing director of Nycomed in Russia and the Commonwealth of Independent States, which invested €60 million (£38.8 million) in a plant in the country recently, told the news provider: "The plant will contribute to better product availability in the Russian market, higher service level, logistics excellence."

Temperature controlled investments

Companies specialising in cold chain facilities for the pharmaceutical industry are now catching on to the demand for such infrastructure in Russia.

World Courier last year opened its temperature controlled distribution centre, boasting "validated storage areas for investigational drugs, diagnostic kits and medical devices", in Moscow. It is just the seventh such facility the company had opened worldwide.

Wayne Heyland, president and chief executive officer of World Courier Group, commented: "By using our centralized depots, clients can significantly reduce customs delays, improve the regulatory permit process and better meet their strict re-supply timelines.

"This is particularly important in emerging markets where interest in conducting clinical trials is growing incrementally to advancements in the local infrastructure."

Just over one year later it announced it was increasing storage capacity at the Moscow facility, due to high customer demand.