Leading Indian drugmakers eye pharma production in Russia

Several top Indian drugmakers and suppliers, including Dr Reddy’s (NYSE: RDY), Ranbaxy (BSE: 500359), Advanced Trading, Cipla (BSE: 500087), Rodosfarma and other companies have expressed interest in establishing production of their generics in Russia’s Moscow region.

 

According to Vladimir Lebedev, head of department of international relations of the Moscow city government, currently a large number of Indian companies operate in the city’s pharmaceutical market and the majority of them are considering setting up factories in the region, which should help to significantly increase sales of their drugs in the Russian market. 

In the meantime, representatives of Advanced Trading said they had plans for opening a factory in the Moscow region, but decided to open a cheaper site in the Belgorod region. At the same time Satish Reddy, head of Dr Reddy's, during a recent International Economic Forum in St Petersburg said that the localization of production in Russia is an important step for the company, however this may be associated with huge costs. He also noted that the procedure of registration of foreign drugs in Russia remains very expensive. 

However, there is a possibility that production of Indian drugs may soon be established in the Russian city of Podolsk by the local firm Diode and India’s Aurobindo Pharma (ARBN: BO). Reportedly, the companies are currently building a plant, which will specialize on the production of about 70 kinds of drugs, mainly generics. 
 

At the same time Russian analysts suggest that the establishment of Russian production may be restricted by significant costs to Indian producers, which will be involved in complying with strict Russian standards in the field of ecology and environment.