Ministry of Healthcare faces task of creating 30 new production facilities in 2025 — Giniyat

A regular government session held was held today, June 14, under the chairmanship of Prime Minister Alikhan Smailov. The issue of development of the medical and pharmaceutical industries was discussed on the agenda. Minister of Healthcare Azhar Giniyat and General Director of Nobel Almaty Pharmaceutical Factory JSC Selcuk Tanriverdi spoke on this topic.

According to the head of the Ministry of Health, there is a significant increase in the production of antitumor, antidiabetic and antirheumatic drugs in the world. Growth is 12% per year.

Recall that the Head of State set the task of bringing the share of domestic production to 50% in the pharmaceutical market by 2025. To implement the tasks set, a Comprehensive Plan for the Development of the Pharmaceutical Industry until 2025 was approved.

Consolidation of all support instruments in the implementation of the Comprehensive Plan had an effect and allowed:

- to improve the planning system within the framework of the GOBMP and OSMS;

- introduce compensatory and supportive measures in accordance with world practice;

- develop innovations through technology transfer and own scientific and clinical research;

- attract Big Pharma to localize their production in the territory of the Republic of Kazakhstan;

- to increase the level of localization of OTPs and the share of local content.

But realizing the need to reach a new level of development, taking into account the plans and interests of both the state and business, taking into account the risks and new world trends, an updated version of the Comprehensive Plan was developed. Currently, it is being coordinated with the interested state bodies.

In general, in the development of the pharmaceutical industry, it should be noted the increase in the increase in production volumes. In 2021, the pharmaceutical industry showed a positive trend, with pharmaceutical production volumes at 124% compared to 2020.

“In January-May of this year, the volume of pharmaceutical production increased by 5% compared to the same period last year. This is due to an increase in the production of medicines at the production sites of Chimpharm JSC, Nobel AFF JSC, Abdi Ibrahim GlobalPharm LLP, Kelun-Kazpharm LLP,” Giniyat explained.

The Kazakh pharmaceutical industry, thanks to effective government support measures, has a huge potential for profitable investments. Thus, state support with domestic producers of long-term contracts for 10 years made it possible to increase the share of purchases in monetary terms from 15% in 2010 to 41% in 2021.

The Ministry of Healthcare has also taken the following measures to support domestic producers:

1) during the pandemic, the assessment of the safety and quality of domestic drugs and medical devices and the examination of the registration of domestic drugs and medical devices have been accelerated;

2) revision of the criteria for selecting suppliers for the conclusion of long-term contracts;

3) monitoring the execution of long-term contracts.

During the period of activity, the Single Distributor concluded 96 long-term contracts with 37 domestic producers for the supply of 5,007 types of drugs and medical devices (811 drugs and 4,196 medical devices), of which 43 long-term contracts were concluded for drugs and 53 long-term contracts for medical devices. Currently, 37 investment projects are at various stages of implementation under the concluded long-term contracts, of which 12 projects are for drugs, and 23 for MI.

Pharmaceutical enterprises are mainly concentrated in Almaty, Karaganda regions, Shymkent, Almaty due to the proximity of transport hubs, the availability of raw materials and jobs.

However, the industry faces the following challenges:

  • OTP portfolio is represented by low-margin generic drugs;
  • limiting procedures for the circulation of medicines within the EAEU;
  • there is no production of pharmaceutical substances in the Republic of Kazakhstan and a low level of export of finished products;
  • there is a shortage of narrow-profile specialists in pharmaceutical production;
  • lack of financing mechanisms for new developments of medicines and medical devices;
  • high start-up costs for launching the production of drugs and MI with long payback periods.

The current situation of pharmaceutical production in the country cannot be considered sufficient: its volumes provide only 24% of the country's need for medicines and medical devices. At the same time, Kazakhstan remains import-dependent both in terms of technologies and components for the production of medicines, and a wide range of pharmaceuticals and substances.

“In addition, the domestic research and educational potential in the field of pharmaceuticals and funding issues are at a low level. To quickly solve the problems of the industry, the ministry is creating a Coordinating Council for the Development of the Medical and Pharmaceutical Industry, which includes representatives of government agencies and businesses,” said Azhar Giniyat.

The ministry is also working to revise off-take contracts with an emphasis on innovation, localization of production, and attraction of foreign investment in the pharmaceutical industry.

To achieve a share of 50% of the OTP, the following measures are taken:

- shifting the emphasis in long-term contracts with MI to drugs;

- implementation of projects of long-term contracts concluded with the Single Distributor;

- creation of R&D centers;

- localization of original drugs in order to conclude long-term contracts;

- conclusion of long-term contracts for expensive innovative drugs;

- tightening the terms of long-term contracts, incl. termination measures.

A noticeable development of the industry took place during the years of industrialization along with the arrival of large foreign investors Polpharma, Nobel, Abdi Ibrahim, Kelun International Development, Pharmstandard (Poland, Turkey, China, Russian Federation, etc.).

The inflow of direct investments into the pharmaceutical industry during the years of the second five-year period of industrialization amounted to more than $270 million.

In the context of the geopolitical crisis and sanctions pressure from the world economic community, there is an urgent need to mobilize all possible resources to ensure the national drug security of Kazakhstan. Given the low share of domestic drugs in the domestic market for the consumption of pharmaceutical products (24%), we consider it expedient to restart domestic production.

A powerful incentive for the development of domestic production is the development of cooperation with the major global pharmaceutical industry from the TOP-50 Big Pharma, for example, with such giants as Pfizer, Bayer, Sanofi, etc.

A big incentive for the development of pharmaceutical clusters will be the involvement of domestic research institutes, scientific laboratories of large medical universities like R&D centers, as well as their deployment in free economic and industrial zones. Kazakhstan is interested in attracting investments and advanced technologies necessary for the successful implementation of the modernization of the economy.

Today, negotiations are underway with 7 Big Pharma pharmaceutical companies on 13 investment projects for contract manufacturing (Hoffmann-La Roche (Switzerland), Novo Nordisk (Denmark), AstraZeneca (Great Britain), Sandoz (Switzerland), TAKEDA (Japan) PFIZER, ATABAY Pharmaceuticals and Fine Chemicals). The cost of investments will be more than 17 billion tenge.

“We attach key importance to the development of the production of expensive innovative products, the promotion of the industry in the direction of technology transfer, its digitalization, as well as the development of a cluster initiative. At the moment, 3 cluster zones are considered in the years. Aktobe, Nur-Sultan and Shymkent. The attractiveness of these regions is due to the presence of production sites and leading medical universities on their territory,” said the Minister of Health.

On behalf of the Head of State, the Government established QazBioPharm National Holding JSC in December 2021 to ensure biosafety and sustainable development of biopharmaceutical infrastructure. The holding is faced with the task of developing a development strategy for QazBioPharm.

The holding being created will ensure the biological safety of the country, sustainable development and improvement of the infrastructure of the biopharmaceutical market, stimulate the development of biopharmaceutical science and industry.

By 2025, the Ministry of Health is faced with the task of creating 30 new industries, increasing the share of domestic manufacturers by 50%, which in turn will increase the volume of pharmaceutical production by 2.5 times.

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