Russia’s Prime Minister Vladimir Putin has pledged 122.9 billion rubles ($3.97 billion) in federal funding for development of the domestic pharmaceuticals and medical products sector by 2020.

Speaking last week, Mr Putin set a goal for the local industry to be producing 90% of Russia’s essential medicines by 2020, and for exports to have increased eightfold over the period. The risk of shortages and sudden price rises resultsing from Russia’s current dependence on imported medicines and medical equipment “cannot be tolerated,” and the federal financing would act as “seed capital for the modernisation of the industry, for a quality breakthrough in innovation,” he said.

Industry and Trade Minister Viktor Khristenko also told the meeting that the most conservative estimates for growth in the domestic pharmaceuticals market are for a sixfold increase over the next decade, “so, our industry will have to grow twelvefold,” he said.

However, Mr Putin has also warned that multinational drugmakers will face restrictions in Russia if they do not develop production and transfer technology there. In comments made during cabinet discussions on the development of the pharmaceutical sector, he was also highly critical of the tactics used by some drugmakers to sell their products in the country.

“Foreign producers, with the help of some of our celebrities, are pushing their products, saying that without them everyone will die,” said the Prime Minister.

Meantime, a new report from research firm Frost & Sullivan forecasts that the Russian pharmaceuticals market will leap from a value of $15.3 billion in 2009 to $37.15 billion in 2016, boosted by a variety of government initiatives, although with the possibility of a few blips in the short term.

Government measures to boost market growth which are already in existence include: the 2020 Pharmaceutical Development Programme (Pharma 2020), which aims to have the local industry producing at least 50% of the medicines (by value) sold on the Russian market by 2020; September 2010’s Federal Law No 61, which simplifies the circulation of drugs and makes authorisation procedures faster and more transparent; and the 2020 Healthcare Development Programme, which will include provisions for pharmaceutical insurance, the report notes.

“Through amending the law and declaring its support for the domestic industry, the Russian government appears to be a guarantor of pharmaceutical market growth,” says F&S research analyst Dominika Grzywinska.

However, she also notes that pharmaceutical-related legislation in the country has undergone numerous changes in recent years, and suggests that while the new laws are expected to “bring clarity and coherence” to the sector, they could also lead to some temporary and short-term restraint in market development.

“Companies which decide to establish production facilities in Russia can count on government support and preferential treatment. Nevertheless, companies need to closely observe the changes to assess their impact on potential growth opportunities,” Ms Gryzwinska advises.