Expert Corner with Arman Voskerchyan: Pharma 2020 is a very ambitious plan

Russia has launched a series of initiatives with the goal of modernizing the country’s health care sector. To find out more about the pharmaceutical industry’s perspective, Modern Russia recently spoke with Arman Voskerchyan, managing director of Johnson & Johnson Medical Russia and CIS, PhD.  He serves as co-chairman of the American Chamber of Commerce in Russia’s Health Care Committee and chairman of the International Medical Device Manufacturers Association (IMEDA).

What are the most critical areas for investment in Russia’s health care sector?
 
When the Russian government started Project Health in 2005, several areas needing improvement were identified:  health care infrastructure, professional medical education and skills of health care professionals, health care financing and patient awareness in healthy lifestyle.  In the last 5 years significant investments has been made into infrastructure projects, new medical centers were opened and are still opening, additional funds have flown into the health care system.  Despite economic challenges the government is still very much committed to health care modernization and improvement of health care outcomes.

While a lot has been done, it is important to stay committed and be consistent.  Our government seems to concur:  in his 2010 St. Petersburg Economic Forum speech President Medvedev identified systematic investments in human capital development in the sphere of health care as one of the priorities.  Professional education is key to advancement of health care practices.  The government would benefit greatly if it uses expertise and experience of international companies in professional medical education.

Let me give you an example of successful cooperation between the government and international companies in professional skills development.  In February of 2007 soon-to-become President Medvedev participated in the opening of the Kazan Advanced Medical Technology Educational Center which was formed as a private-public partnership between the Republic of Tatarstan Ministry of Health and Johnson & Johnson LLC.  The role of the center is to provide physicians with greater access to education and training on today’s advanced health care technologies and procedures.  The focus of the Center is to provide hands-on trainings in most relevant areas of today’s advanced health care technologies – cardiology, endoscopic surgery, trauma and orthopedic surgery, etc.  The key technical innovations of the education process (computer simulators, dry labs) allow physicians to practice procedures in a real-time mode, which leads to dramatic reduction of fatal mistakes.
 
Inadequate financing, exacerbated by multiple financing channels system, has been a weak link in the system until now.  Recent initiatives to increase compulsory health insurance dues from 3.1 percent to 5.1 percent of Russian salaries should seriously improve the financing gap.  It is estimated that 460 billion roubles (the 2 percent difference between future 5.1 percent and current 3.1 percent) will be spent in 2011-2012 for several specific purposes including modernization of infrastructure (300 billion roubles), implementation of IT technologies (24 billion roubles) and implementation of standards of care (136 billion roubles)

Even though significant investment at the government level will be and has already been made in various health care initiatives, there is a concern that the majority of launched initiatives are isolated and not connected specifically to patient’s needs.  Core requirements for improving health care in Russia are the maintenance of the congruent principle in terms of health care initiatives and a deep understanding of patient benefits relating to these initiatives.  Needless to say, any investment in health care will only bring results if a holistic approach is taken.  For example, improvement of infrastructure will not bring expected returns unless coupled with well-trained medical professionals, sufficient supply of disposable materials, a proper referral system, working IT solutions and good patient awareness.

What are the opportunities or challenges foreign companies face in entering the Russian market?
 
Currently the Russian health care market is changing, and these changes follow the new rules suggested by the state.  This process is not always smooth and predictable, but it does offer new challenges and new opportunities.

In any case, companies wishing to enter the Russian health care market should come with serious long-term intentions and consider not only sales plans figures, but also investment plans.  This is the consistent position of the Russian government, and it is not likely to change.
 
Is the Pharma 2020 strategy realistic?
 
Pharma 2020 is a very ambitious plan. It may well be that some corrections are introduced at some point.  After all, the basis of the strategy and its first versions were developed before the economic crisis and recession that hit global players, as well as the national business and economy as a whole.  In any case, this strategy remains a distinct reference point for the government, and it makes sense to align a company’s development plan with it when working at the Russian market.  The crucial element of the strategy and related government declarations is the abandonment of the industry nationalization plan, acknowledgement of the leading role of business, readiness for cooperation and dialogue with the global players.
 
What does Russia need to stimulate innovation in research and development of new medicines?
 
Russia has excellent scientists but they are rarely involved in international projects and frequently lack the ability to work following internationally accepted standards.  In addition, Russia lacks scientific and manufacturing companies which can partner with global players in joint research projects.  Science today implies international cooperation rather than international competition, and this cooperation must be encouraged and supported by all means.  The Russian government should encourage all projects aimed at establishing horizontal links between Russian scientists and their colleagues abroad. Joint projects, knowledge and experience exchange will foster a new generation of Russian researchers involved in global projects, ultimately benefiting both Russian and international science.

Another key tactical element to help foster innovations development in medicine has been presented by the Russian government in the project “Technopark Skolkovo.”  Incentives the government promised to provide on the project grounds could be a great engine for driving development of new medicines in Russia.