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Moscow takes steps to secure medicine supply

City’s government proposes subsidies and other incentives to new and existing pharmaceutical firmsMoscow takes steps to secure medicine supply

Moscow takes steps to secure medicine supply

© Getty Images / PhotoAlto/Sigrid Olsson

Moscow’s Mayor Sergei Sobyanin on Thursday unveiled a package of measures aimed at bolstering Russia’s pharmaceutical industry in order to secure domestic supplies of medicines, amid Ukraine-related Western sanctions.

Sanctions have not yet targeted the pharmaceutical industry directly and, although many foreign drug manufacturers specifically said they would continue deliveries to Russia, there are still fears that shipping and economic constraints may impact the country’s medicine supply.

According to Sobyanin, the Moscow region’s pharmaceutical industry is one of the largest in Russia. At a meeting with representatives of Russia’s ‘Big Pharma,’ the official announced a number of actions aimed at further boosting the development of the industry.

Measures are in place to subsidize the purchase of equipment, technologies, preferential loans… a program of offset transactions has been implemented, when we guarantee purchases to businesses… we negotiate with suppliers so that they… deploy import-substitution production in Moscow,” the mayor said.

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He added that the government will support the development of new pharmaceutical companies, offering a reduced land lease of only one ruble per year. He also said a decision had been made to increase the volume of the Industrial Development Support Fund to 10 billion rubles ($96.5 million), which will be allocated to subsidize interest rates in order to replenish working capital for drug manufacturers.

According to the mayor, discussions are currently being held on subsidizing preferential loan rates for backbone enterprises. Authorities plan to expand clinical research programs, increase advance payment for the purchase of medicines for state needs to 70% and apply a prepayment mechanism for purchased products for reliable suppliers. Moreover, the government is set to simplify the procedure for the registration of new domestic drugs, and to reduce the minimum threshold for investment in offset contracts from one billion to 100 million rubles. Moscow will also greenlight projects for the production of domestic immunoglobulins and for the clinical trials of drugs on the basis of the capital’s medical organizations.

The steps largely cover pharma industry development in Moscow, though Sobyanin has recently been appointed as deputy head of Russia’s new operational headquarters dealing with sanctions pressure, which suggests that the capital’s measures may soon be mirrored by other Russian regions.

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