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Pharmaceutical business in Ukraine is an attractive investment sector


22.04.2020 (№ LDaily #3)

Pharmaceutical business in Ukraine is an attractive investment sector

Vladimir Redko, executive director of the Association of Pharmaceutical Research and Development “APRaD” told about tendencies of health care reform.

The idea of creating an organization uniting manufacturers of innovative drugs in Ukraine emerged 10 years ago. Immediately after its foundation, the association became a platform for a dialogue between the world producers of innovative drugs with the state structures of Ukraine, searching for common solutions, delivering their ideas and proposals to representatives of government and other organizations more effectively, as well as the opportunity, by combining efforts, to influence constructively the processes of reforming the system of the healthcare and pharmaceutical industry of Ukraine. Vladimir Redko, executive director of the APRaD Association, told about the main goals of the organization’s activities, about the participation of member companies in the healthcare system reform.

: As we know, in Ukraine there are no domestic manufacturers of medicines among members of your association. Tell us about the member companies of the Association.

V. Redko: Today, our Association unites the 16 largest international companies – leaders in the development, research and production of medicines – that conduct their activities, in Ukraine as well. There are not so many innovative companies in the world, because it requires the availability of expensive equipment, time and very serious means. Therefore, so far, unfortunately, there are no domestic companies in our association, but we are always open to dialogue. For example, to create one innovative preparation, it requires more than 10 years and more than a billion dollars of investment. In addition, not all studies produce the expected result, so innovation is a big enough risk. Nevertheless, innovative drugs are mostly represented in Ukraine, and this is undoubtedly a huge plus for patients.

: What are the tasks and aims of the Association?

V. Redko: We represent the interests of the research pharmaceutical industry in Ukraine. Together we can bring the positions of this part of the pharmaceutical industry to the relevant state circles. Representatives of our Association constantly take an active part in the discussion of draft laws and decisions, in developing recommendations for new amendments and additions to the current legislation, which deals with all aspects of the circulation of medicines. Defending the interests of innovative pharmaceutical companies in simplifying registration, improving the taxation system, including innovative drugs in the National List of Essential Medicines, protecting intellectual property rights, etc., we are also contributing to the development of the health care system and ensuring the population of the country with access to high-quality, safe and effective medicines, which contributes to improving the quality of people`s life. Besides,

One of the important missions of the Association “APRaD” is the introduction of ethical principles of conducting commercial activities that would meet the current European standards, among its members and in the pharmaceutical community of Ukraine

Since 2012, our Association is a member of the European Federation of Pharmaceutical Industries and Associations (EFPIA – According to the EFPIA Code on Disclosure of the Transfer of Values ​​by Pharmaceutical Companies to Health Professionals and Health Care Institutions”, the APRaD members, starting in 2016, annually provide publicly available information on financial values ​​transferred by representatives of the innovative pharmaceutical industry to health workers. Such measures contribute to the policy of openness of business, increases the level of confidence in the pharmaceutical industry, make the relations between doctors and manufacturers of original drugs transparent.

: Most farm companies complain that state bodies are reluctant to contact them. Is it easier to organize such dialogue through associations?

V. Redko: Unfortunately, Ukrainian officials listen to the experts of the pharmaceutical business much less than it would be. Over the past few years, there have been positive trends in the cooperation of the Ministry of Health with public organizations and associations in pharmaceuticals, but in my opinion, the potential for such cooperation has not been fully realized. Representatives of the pharmaceutical sector and international innovation companies are ready to share their experience and help in the reform process, but the current government relies more on the experience of international organizations such as WHO and does not pay much attention to the experts. An example is the development and implementation of the National List of Essential Medicines, formed on the basis of the WHO list. When it was compiled in Ukraine, the absolute cost of drugs was considered; And, thus, innovative medicines have been virtually excluded from the list.

: Vladimir, obviously you personally and the Association itself monitors the development of health care reform. How do you think it goes?

V. Redko: We not only follow the reform of health care, but also take an active part in the process of working out and improving the regulatory system, as it was said before. This reform concerns everyone, not only the pharmaceutical industry or medical institutions, as it will directly affect the quality of medical services received by each individual citizen of Ukraine and the quality of our life. Of course, it will affect the development of the pharmaceutical industry. All this is interconnected. One of the examples of our active participation in the reform process is the development of the Vision 2020 concept, which is a guide to the formation of an effective health care system in Ukraine aimed at improving patient access to innovative drugs. Now we see positive trends in the process of health care reform. This is, first of all, the reform of the regulatory system; implementation of laws developed over the past two years aimed at liberalizing the pharmaceutical market; launch of reimbursement mechanism; the first real steps in creating an e-health system. However, one must understand that the process of reform is a long process in any country. The most important thing is that the changes started.

: What do you think is necessary for the success of the reform?

V. Redko: You can talk about the experience of European countries, but in each country there are their prerequisites, and the ways of reform are always individual, because there are always pitfalls. It is enough to study the processes that occurred in the neighbors, and begin to introduce them in Ukraine. Successful reform requires the right ideas, professionals and experts, the means, time and sufficient political will, which, in turn, requires an understanding of the priority of the need for reform. It is necessary to make changes in the system of financing, which can become the main obstacle in the process of reforming and slow down the whole process. Unfortunately,

in my opinion, qualified specialists from the innovative pharmaceutical industry are not involved to the reform process and are not attracted enough to point out the shortcomings and controversial points in the process of preparing for the implementation of the reform

Nevertheless, we continue to communicate our ideas and often we see a positive response. I would like to do more, but you need to be able to work with what is, and do not stop there.

: As an executive director of the Association, you know very well the reasons for the minimum investment in Ukraine. What is the reason for this?

V. Redko: The pharmaceutical business as a whole is a fairly profitable type of business and therefore an attractive sector for investment. Nevertheless, today there are a number of factors that repel foreign investors, namely: the lack of clear and transparent rules of the game in the market and protection of investments, a complex regulatory system and taxation system, lack of guarantees for the protection of intellectual property rights. The number of risks exceeds the expected profit expectations. And yet, the reforms are slowly moving forward and in the long term Ukraine undoubtedly will be a very attractive country for investment by international pharmaceutical companies. Now many Ukrainian patients do not have adequate access to the innovative medicines that can really change their lives, however, given the existing positive trends, it can be said that in the foreseeable future, everything will gradually change for the better

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