The Russian market for active pharmaceutical ingredients (APIs) and low-tonnage chemicals shows strong potential, fueled by government initiatives like support for domestic production

The ever-present threat of new infectious diseases underscores the critical need for a robust domestic pharmaceutical industry. Recognising this, the Russian government has prioritised the development of new-generation drugs and specialized chemicals used in their production. This commitment is evident in the inclusion of these areas within the President's list of key scientific and technological advancements.

Main features and challenges of the Russian market of API and low-tonnage chemistry

The Russian market for APIs (active pharmaceutical ingredients) and low-tonnage chemicals presents a unique opportunity for domestic producers. While a significant portion (80-90% by some estimates) of components currently come from international sources, particularly India and China, this highlights the vast potential for local manufacturers to step in and meet growing domestic demand.

This trend can be attributed to three main factors. Firstly, until recently, much of the research was based on Soviet-era developments adapted to meet international standards. Secondly, the pharmaceutical industry still relies heavily on foreign equipment, reagents, and auxiliary substances. Additionally, we will address the low-tonnage chemistry market separately.

Companies involved in large-capacity chemistry have the potential to produce pharmaceutical components. However, this is often not economically viable, partly due to the significant differences in production and consumption volumes of medicines compared to China.

The domestic market for APIs and low-tonnage chemicals is experiencing a dynamic resurgence. The Ministry of Industry and Trade (Russia) reports a surge in new pharmaceutical companies (over 70!) established in the past decade. This impressive growth is accompanied by a staggering sixfold increase in medical product output since 2009. These trends suggest a booming domestic demand for locally produced APIs and low-tonnage chemicals, creating a fertile ground for further market expansion.

Prospects for the Russian market of API and low-tonnage chemistry

The Russian market for active pharmaceutical ingredients (APIs) and low-tonnage chemicals is poised for significant growth. This is driven by strong government support, including the recently approved the Strategy for the Development of the Pharmaceutical Industry until 2030. This key document prioritizes not only domestic medicine production but also the crucial ingredients needed for their manufacture. By fostering innovation, import substitution, and drug independence, the strategy creates a fertile ground for the API and low-tonnage chemical market to thrive.

When discussing specific state support measures for developers of APIs and low-tonnage chemistry, it's important to distinguish between federal and regional initiatives. Federal support includes preferential loans, subsidies, grants, and prioritizing Russian products in government procurement. On the other hand, regional support measures encompass tax incentives, preferential land allocation, and infrastructure connections.

While government support for the API and low-tonnage chemistry market is substantial, stakeholders see room for further improvement. Streamlining regulatory processes, particularly for modifying drug formulations and registering domestic APIs, would significantly accelerate domestic production and innovation. Additionally, increased support for companies engaged in multistage synthesis of substances would create a ripple effect, benefiting both the pharmaceutical and chemical industries.

Collaboration between API producers and final drug manufacturers is seen as a key driver of growth. Initiatives like the Mendeleev Engineering Centre, established in 2019, serve as a prime example. This center has already proven its effectiveness as a reliable partner for industrial companies, fostering innovation in API development. Similar collaborative efforts can be seen in the Tomsk Region's Engineering Chemical Technology Centre and the R&D center established by Promomed Group in Moscow.

Russia boasts established players with a strong track record in API development and production. Promomed Group, for instance, exemplifies this success. Their work has not only yielded novel API components but also culminated in the launch of one of the largest production plants, capable of generating up to 300 tonnes of products. Furthermore, Promomed's effective collaboration with low-tonnage and medium-tonnage chemical companies demonstrates the power of a connected industry ecosystem.

Value of participating and attending Pharmtech & Ingredients exhibition

The Russian market for APIs and low-tonnage chemistry is expected to grow dynamically in the coming years. This presents opportunities for pharmaceutical and ingredient manufacturers to find new partners, establish contracts, and foster collaboration. Each year, the issues and prospects of the API and low-tonnage chemistry market are discussed by experts during the business program of the Pharmtech & Ingredients exhibition. Specialized associations and committees, the scientific community from higher educational institutions, and companies producing substances and medicines are invited to collaborate. By participating in Pharmtech & Ingredients, the largest industry exhibition of equipment, raw materials, and technologies for pharmaceutical products, in Russia and the CIS, you can discover new partners and gain up-to-date market insights from the expert community.

Pharmtech & Ingredients 2023 smashed attendance records, attracting a staggering 10,011 specialists – the highest ever in the exhibition's history. 

This impressive turnout included a significant portion (38%, or 3,808 people) specifically interested in raw materials and ingredients for pharmaceutical production. With participation from 472 companies across 14 countries, the event fostered a truly global atmosphere for collaboration and trade.

The 26th international Pharmtech & Ingredients exhibition (November 19-22, 2024) at Crocus Expo IEC, Pavilion 2, Moscow, is a must-attend event for everyone in the pharmaceutical market. This industry-leading exhibition caters to both established players and newcomers, offering a valuable platform for:

• API and low-tonnage chemical manufacturers: Showcase your products and forge lucrative connections with potential buyers.