The result has been an ongoing scandal that in November 2006 led to the dismissal of the leadership of the Federal Mandatory
Medical Insurance Fund (FMMIF), the Ministry of Health and Social Development (Minzdrav) entity responsible for processing
DLO payments, and the March 2007 dismissal of the head of the Federal Service for Health and Social Development Supervision
(Roszdravnadzor) which was created in 2004 to supervise the overall regulation of medicines and to run the DLO. All this might
mean that while the DLO has essentially made the market, it could soon be dismantled. Nonetheless, the commercial market alone
should be enough to attain 10% to 20% annual market growth in the next several years.
More Work Ahead
As a specialty drug provider, it is no surprise that about 60% of Roche's sales in Russia come from the DLO program, but Milos
Petrovic, the Serbian head of Russian representation for Roche - the number-two player in the overall Russian (ethical) prescription
segment as well as the DLO reimbursement segment (according to preliminary 2006 data from Pharmexpert) - sees today's DLO
as far from sufficient. Nonetheless, he says. "We need to give healthcare policymakers a chance to work with all stakeholders
to improve the system."
Real growth of drug commercial segment outpaced GDP growth rate
Petrovic suggests that "Russia, first of all, needs to gain a full understanding of epidemiology. Secondly, the Ministry of
Health must continue its work to establish uniform treatment guidelines for common diseases so physicians know which drug
or group of drugs to give first. Only then will it become relatively easy to define the budget required to meet the needs
of the population. The current gap in the Ministry of Health budget for 2006 is simply a consequence of inadequate calculation
of the needs of the sick in Russia," he says. "Nobody knew what to expect from the DLO because there was no history on which
to base funding decisions. Somebody needs to make these calculations and make the necessary allocations to the regional and
federal funding mechanism."
Once this happens, Petrovic believes the potential of Russia can be unlocked. "This is the key, as the cost of the reimbursement
of medicines is not such big money for the number-three country in the world in foreign currency reserves - higher than the
whole EU. The issue is now whether the Russian Federation really wants to bring its healthcare system to the European level."
Petrovic believes that "if one can assess the success of a product launch in three to six months in an average European country,
here we need to talk about one to two years. Two factors are responsible: the size of the country and a conservative attitude
among many Russian physicians. But when the product is well accepted, its life cycle is longer than in Western Europe.
Nonetheless, Roche's leading products in Russia - MabThera, NeoRecormon and Herceptin - are the same as in most other European
countries, and three big launches were recently conducted in three months: Bonviva, MabThera for rheumatoid arthritis and
Petrovic points out that the massive educational efforts directed toward physicians and nurses were left to pharmaceutical
companies. Once they discovered that they could treat non Hodgkin's lymphoma with MabThera as doctors do in Germany or the
U.S.A., they then had to overcome the lack of budget allowances in hospitals for infusion pumps needed for the drug to be
administered," he says.
Educating the Stakeholders
Education is also at the heart of Novo Nordisk's strategy. "We have very good relationships because we consider education,
effective data management, and clarity on roles and responsibility as equally important elements," says Sergei Smirnov, who
is responsible for the 13 Commonwealth of Independent States and became Novo Nordisk's youngest vice president worldwide.
He adds, "our stakeholders know that we are very reliable in terms of superior quality in everything we do: high-quality products,
security of deliveries and supporting service activities. Our aim is to encourage a more collaborative approach as part of
the solution for better health outcomes."