Russia. The Russian pharmaceutical sales market, estimated at $7 billion and growing at double-digit rates, is dominated by foreign pharmaceutical companies such as Johnson & Johnson (Raritan, NJ), Novo Nordisk, Roche (Basel, Switzerland), Sanofi-Aventis (Paris), Nycomed (Zurich, Switzerland), and Menarini (Florence), as well as by foreign generic-drug companies such as Gedeon Richter (Budapest) and Lek (Ljubljana, Slovenia) (2).

The main attractions of the Russian market are its large population, growing middle class with access to private insurance, willingness to pay out-of-pocket for many high-cost drugs, and large demand for drugs to treat chronic conditions. Among the challenges facing any drugmaker are the sheer size of the country and poor infrastructure outside of the most populated areas. In addition, intellectual property enforcement in Russia continues to be lax and counterfeiting of pharmaceuticals is a major problem, while corruption, lack of transparency, and red tape often cause delays in market approval. There are also questions about the sustainability of the state drug program, DLO (Dopolnitelnoe Lekarstvennoe Obespechenie, which translates into the Provision of Supplemental Medicines), launched in 2005 to make medicines more accessible to veterans, retirees, and low-income individuals.

During the past few years, a number of foreign generics companies, including Stada Arzneimittel AG (Bad Vilbel, Germany), Polpharma (Warsaw, Poland), and Actavis (Hafnarfjordur, Iceland), have acquired Russian dose-manufacturing sites and, together with them, instant market share. Stada, through its subsidiaray Nizhpharm in Nizhny Novgorod, which it acquired in 2004, last year purchsased three companies belonging to the Makiz group with facilities in Moscow and Ryazan. Polpharma acquired a stake in Akrihin in Staraya Kuparna near Moscow, and Actavis purchased a majority stake in Zio Zdorovje in Podolsk, near Moscow. Others, among them Slovenia's Krka, have built their own manufacturing sites in Russia from scratch. Krka opened a facility near Moscow for manufacturing solid-dose forms. It has been reported that Teva is considering building or buying a plant in Russia by May 2009.

Figure 1: The number of established, less established, and potential future active pharmaceutical ingredient (API) manufacturing groups headquartered in India and China. Established groups have several years of experience supplying APIs to regulated markets. Less established groups have regulated market experience with fewer products or fewer years of experience than established groups. Potential future companies would like to start supplying to regulated markets.

Major pharmaceutical companies have been selling their older brand products in India for many years. During the past decade, they also have launched some products in India that still enjoy patent protection in the rest of the world, among them AstraZeneca's (London) "Nexium" (esomeprazole) and Pfizer's "Viagra" (sildenafil). Taking things a step further, Pfizer is planning to develop several products specifically for the Indian market. Novo Nordisk also has announced growth plans for India's market and is expanding its collaboration with Torrent Pharma (Ahmedabad), which is running a dedicated insulin manufacturing facility for Novo Nordisk.