Western pharmaceutical companies began to sell fewer drugs in Russia
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Over the two years since the Russian-Ukrainian military conflict, the American pharmaceutical company MSD has reduced its portfolio of drugs sold in the Russian Federation by a quarter, although the pharmaceutical industry was not subject to Western sanctions. This, as expected, led to a drop in revenue, which decreased by 37% at the end of 2023, to RUB 8.7 billion. MSD had the most noticeable reduction among the representative offices of international pharmaceutical manufacturers represented in the Russian Federation. The company first of all withdrew from the Russian market drugs that could not withstand competition with generics, experts say. Meanwhile, MSD practically does not register new funds in the country.
MSD Pharmaceuticals, a division of the American pharmaceutical manufacturer MSD in Russia, reduced revenue by 37% in 2023, to 8.7 billion rubles, the company’s report says. The reason is also indicated there – a reduction in the product portfolio “due to changes in market conditions.” According to RNC Pharma development director Nikolai Bespalov, in 2023 MSD supplied 29 drugs to the Russian Federation compared to 38 in 2022.
Among the notable losses, he names the antihypertensive drug Renitek, the antidiabetic drugs Januvia and Janumet, and the vaccine against measles, rubella and mumps (M-M-R II).
A number of international pharmaceutical manufacturers in 2022, due to the military actions of the Russian Federation in Ukraine, announced their withdrawal from the Russian market, despite the absence of Western sanctions in the pharmaceutical industry. At the time, MSD said it would continue to supply life-saving drugs for which there were no alternative products or treatments available in the country (see “Kommersant” dated July 4, 2022). In 2023, it became known about MSD’s plans to stop producing in Russia and supplying the country with the anti-HIV drug Isentress and the anti-hepatitis C drug Zepatir.
Having reduced its portfolio, MSD was forced to halve its staff in the Russian Federation over the course of a year – to 175 people; the company had to spend a total of almost 936 million rubles on severance pay for those who quit in 2022-2023, according to the pharmaceutical manufacturer’s reporting. It clarifies that the reduction mainly included employees of departments involved in the sale and promotion of drugs that were withdrawn from the Russian market.
In addition, MSD Pharmaceuticals ceased production of finished products at the Akrikhina site, the report says. The company did not respond to Kommersant’s request. At this site the company produced, in particular, Januvia and Janumet. MSD produced some of the drugs at the facilities of R-Pharm, where they told Kommersant that production was continuing.
MSD withdrew from the market those products that could not withstand competition with generics, says Nikolai Bespalov. For this reason, he assumes that there will be a further reduction in the company’s portfolio.
MSD re-registered some of the products produced and supplied to the Russian Federation as Organon, a structure associated with an American company. According to RNC Pharma, this company received, for example, the spray for the treatment of allergic rhinitis Nasonex, Singulair for the treatment of bronchial asthma, and the cholesterol-lowering drug Ezetrol, produced at the Akrikhina site. At the same time, according to SPARK, the revenue of Organon LLC in 2023 increased by only 8.7%, to 8.6 billion rubles, the company’s personnel also decreased – by 22%, to 178 people.
The dynamics of the decline in revenue at MSD Pharmaceuticals is the most significant among the Russian representative offices of large international pharmaceutical companies, follows from an analysis by Kommersant based on their reports. Thus, the revenue of Johnson & Johnson LLC decreased by 10.8%, to 68.9 billion rubles, AbbVie LLC – by 19.1%, to 9.4 billion rubles. These companies declined to comment.
In the British GSK, Kommersant explained the drop in revenue at the Russian subsidiary GlaxoSmithKline Trading by 14%, to almost 16 billion rubles, by the spin-off of the former non-prescription drugs division into a separate company, Haleon. Roche-Moscow (a division of the Swiss Roche), where revenue fell by 6.1%, to 29 billion rubles, says that it did not reduce its drug portfolio in 2023, and the result is associated with fluctuations in the timing of purchases of prescription drugs, which constitute the main part of the company’s portfolio.
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