Multinational drugmakers are expected to spend at least $1 billion in the near future on setting up production facilities in Russia, in response to government measures aimed at boosting the local industry.

Russian government plans to increase domestic firms’ share of the market from 20% at present to 25% by 2012 and 50% by 2020 include a range of incentives for locally-made products such as faster registration and preferred status in the programme which supplies health care to those on low incomes. Priority for locally-made drugs is also likely to be included the planned universal insurance scheme for prescription drugs, reports Reuters.

With growth in the Russian pharmaceutical market set to far outpace that for western nations – market research firm Pharmexpert is expecting sales this year to grow 18% and 12% respectively, in US$ and rouble terms – multinationals which have announced plans to set up or extend manufacturing facilities in Russia, or are considering doing so, include AstraZeneca, GlaxoSmithKline, Novartis, Novo Nordisk, Nycomed, Pfizer, Sanofi-Aventis and Servier, says the report.

Another benefit of producing drugs in Russia is reduced exposure to currency fluctuations, which decreases in line with the number of production stages being carried out in the country, it adds.

Meantime, Russia’s Industry Minister Viktor Khristenko announced at the weekend that efforts to boost local drugmakers’ share of the market will include government investment totalling 120 billion roubles ($4 billion) by 2020, with total investment in the sector reaching 188 billion roubles by the end of the decade.

Mr Khristenko was speaking at Russia’s annual International Economic Forum in St Petersburg, at which India’s Commerce and Industry Minister Anand Sharma said that Indian drugmakers are ready to invest in Russia and are “just waiting” for the Russian government to publish its essential drugs list, after which they will develop their “plan of action.”

Mr Sharma also noted that the two nations are developing a common protocol for drug production plus measures to facilitate the export of Indian-made generic drugs to Russia.

Pharmaceuticals will be a central focus of initiatives aimed at increasing bilateral trade between Russia and India from around $8 billion at present to $20 billion by 2015, which will include setting up a Comprehensive Economic Partnership Agreement to encourage trade and investments, officials said at the Forum.

- By 2010, the Russian pharmaceutical market should be worth at least $60 billion, and could rise as high as $90 billion if the universal health insurance system is launched, according to Pharmexpert.