BIO 2012: Can Russia emerge as a global biotech and manufacturing leader?

What makes a country ideal to grow as a biotech and manufacturing provider can depend a lot on government support and initiative, something Russia has going for it over the next 8 years. As experts and Russian dignitaries discussed at a BIO 2012 panel focusing on the country's emerging market, the Russian government aims to have production and consumption increase fourfold by 2020.

The Russian government has started to do its part in the quest by doubling health expenditures per capita and investing in infrastructure to attract foreign investors, as evidenced by its Pharma 2020 initiative. "We are optimistic in terms of investment, not just by private companies, but also we plan to channel all or most of the government support for technological projects and business," said Oleg Fomichev, Russia's deputy minister for economic development.

One company with a foothold in Russia is Abbott Laboratories ($ABT), which found its start in the Soviet Union during the late 1970s, but only began working closely with Russian companies in 2004. Abbott has formed manufacturing partnerships with Petrovax, Pharmstandard and R Pharm and is looking at establishing more alliances. As Alberto Colzi, Abbott's divisional vice president for Central and Eastern Europe and North and West Africa, explained, Russia's growing healthcare market and work in IP protection are key to Abbott's long-term presence in the country.

 "We see that all the conditions to make Russia an attractive partner [are] coming together," Colzi said.

Like any emerging market, Russia is not without its obstacles. Pharma 2020 has been met with criticism by some, including IHS Global Insight, which characterized the plan as "too ambitious" in a 2011 analysis. Even Colzi and Fomichev explained that there can be room for improvement in the Russian system. Colzi said logistics is an issue and having a "one-stop shop" for getting regulatory information would help in attracting more foreign investment.

"Sometimes, for an international company, it's not easy to access information and they could simplify the process," he said. "Who should we contact with? Who should we follow up with? There is a solid infrastructure, but it's more about putting logistics together."

The goals are in place, but it's just a matter of implementing them, according to Fomichev.

"Our business environment is not the best in the world, but we have a clear understanding of what we need to do," he said.

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