The development of domestic pharmaceutical production as the basis of Kazakhstan's national drug safety is an important direction of long-term state policy. The Head of the State attaches particular importance to this area, instructing to increase the share of its own pharmaceutical production from the existing 17 to 50% by 2025.
Thus, the Government of Kazakhstan approved the Comprehensive Plan for the Development of the Pharmaceutical and Medical Industry until 2025 and the Healthy Nation National Project for 2021-2025 was developed.
Over the past year, the industry showed positive dynamics, while the production of pharmaceutical products accounts for 123% compared to 2020. However, the current situation of pharmaceutical production cannot be considered sufficient: only 24% of the country's needs for medicines and medical devices provide its volumes. Over the past two years, growth has been observed by 7%.
One of the main localization drivers of production in a full cycle is the import substitution policy consistently pursued by the country's leadership. The emphasis of this policy is on the development and transfer of new technological competencies, the production of export-oriented products, the creation of innovative industry sectors, among which the pharmaceutical industry is one of the key ones.
Today, domestic manufacturers need to focus on the development of their industries with an emphasis on import substitution in terms of transferring advanced technologies, localizing the production of original, innovative medicines and increasing exports of finished products. At the same time, along with the production of finished products, it is necessary to develop and produce pharmaceutical components and substances. To date, a measure of support in the pharmaceutical industry is provided in the form of long-term contracts.
Due to effective measures of state support as the conclusion of long-term contracts for 10 years, it has increased the share of procurement through the single distribution system from 15% in 2010 to 41% in 2021 in monetary terms.
Thus, in June of this year, the Government approved the Program for the Development of Domestic Value and Export-oriented Industries, which is aimed at expanding the range of industrial goods in demand in the domestic and foreign markets.
The mechanism of contract manufacturing is as follows: a foreign company manufactures medicines on a contract basis at the production facilities of a domestic agent. This mechanism was developed to support domestic producers and simplify the procedures for entering the market of original and innovative medicines, since the scheme allows BIGPHARMA brands to enter the market of Kazakhstan.
Thus, after signing the contract, the manufacturer receives a ten-year state order (an offtake contract), while the manufacturer undertakes to establish the production of medicines and medical devices in accordance with the requirements of Good Manufacturing Practice (GMP) for drugs.
In an unstable environment in the global economy, it is necessary to stimulate the growth of the production of Kazakhstani pharmaceutical products through the additional loading of existing pharmaceutical enterprises, the renewal of their fixed assets and the launch of new production facilities, the creation of a regulatory framework, the removal of barriers and the provision of basic infrastructure with affordable financing.
Also, the Government is implementing the Quality and Affordable Health Care for Every Citizen “Healthy Nation” National Project, where the main priority is to provide the population with affordable medicines and medical products of domestic production.
Kazakhstan, occupying a favorable geographical position, is a region of intertwining strategic interests of the countries participating in the Eurasian economic space, China, Turkey, European countries and the United States. Therefore, in the context of the geopolitical situation, the course of the country's investment policy and all related changes will be of significant importance for the entire Asian region and beyond.
Significant development of the industry occurred over the years of industrialization along with the arrival of large foreign investors. The influx of direct investments in the pharmaceutical industry over the years of the second five-year industrialization amounted to more than $ 270 million.
The world practice of implementing production localization projects has been studied, which showed that foreign investors begin production from the stage of packaging of original drugs. The issue of recognizing them by domestic manufacturers is being worked out.
To attract production in the Republic of Kazakhstan, it is necessary to reduce the barriers to the development of contract production in the relevant regulatory acts.
To date, the Single Distributor has already provided measures to simplify the procedures of localization of production taking into account all cycles, starting from packaging to deep localization.
As a support of import substitution with representatives of the world pharmaceutical companies Pfizer, AstraZeneca, Roche Holding, Bayer, Takeda, Novo Nordisk changes and additions to the legislation, simplifying the localization of patented medicinal drugs in Kazakhstan, the method of concluding long-term contracts and customs production.
Big Pharma is a group of major pharmaceutical manufacturers. This group includes 50 top companies with annual revenues of $3 billion or more.
It is also profitable to delegate production for brands, in which one business generates ideas, and the other embodies them. The use of contract manufacturers in the pharmaceutical industry has been growing for several decades, trying to reduce costs, reduce domestic capacities and access to new markets.
Pharmaceutical companies have begun to look for contract manufacturers who offer a wider range of services or those who are ready to play a more strategic and long-term role in the production.
According to PwC analysis, the demand for contracting organizations that offer strategic partnerships is growing as pharmaceutical companies “shift their focus to research and pharmaceutical marketing.”
Such cooperation can even lead to joint investments, as some pharmaceutical companies help finance specialized developments and production capacities in strategic CDMO (Contract Development and Manuapacturn Organization).
Now at various stages of the process, negotiations are underway with 7 pharmaceutical companies BIGPHARMA on 13 investment projects for contract manufacturing (Hoffmann-La Roche (Switzerland), Novo Nordisk (Denmark), AstraZeneca (UK), Sandoz (Switzerland), TAKEDA (Japan) PFIZER, ATABAY Pharmaceuticals and Fine Chemicals).
The Ministry of the Republic of Kazakhstan has already concluded memorandums about mutual understanding with giants such as Roche and Novo Nordisk.
In the framework of cooperation, Novo Nordisk interacts with the Ministry of Health of the Republic of Kazakhstan in the field of clinical examination of the treatment of diabetes, continuing education of Global Obsity Clinics Programme healthcare and training programs for Kazakhstani endocrinologists to modern methods of treating sugar diabetes.
To implement the instructions of the Head of State following the official visit to the Swiss Confederation on November 29, 2021, to ensure the practical implementation of the framework agreement with Roche Holding to localize the production of innovative medicines within the framework of contract manufacturing, certain work has been carried out.
Also, one of the main directions for the development of the pharmaceutical industry until 2025 is the development of pharmaceutical science and the creation of new industries with the participation of world players. In this regard, it seems appropriate to create pharmaceutical clusters through the involvement of domestic research institutes, scientific laboratories, and large medical universities.
The Ministry of Health of the Republic of Kazakhstan has already made a decision to create medical and pharmaceutical clusters in the cities of Astana, Aktobe, Shymkent. The attractiveness of these regions is due to the presence on their territory of large production sites, leading medical universities and clinical centers of the republican and regional levels.
Their task will be to conduct scientific studies aimed at creating import-substituting medicines, including by using the potential of long-term contracts, conducting preclinical and clinical trials.
Тo resolve problematic issues to improve the procurement of drugs and medical products, planning, logistics, domestic production, information technology, the implementation of the Big Pharma’s labeling and development, a public working group was created under the Single Distributor. It includes representatives of civil society, business communities, deputies and industry experts.
It should be noted that the Ministry of Health of the Republic of Kazakhstan is completely revising the state policy on long-term contracts. Priority should be given to industries that meet international standards and provide an integrated approach to improving the product range with an emphasis on scientific and technological innovations, providing highly qualified personnel and maximizing the use of the country's intellectual potential, as well as promoting high-tech domestic products to foreign markets.
Such an approach in the future will make it possible to solve not only the current problems of the development of the pharmaceutical industry, but also to export new drugs and ensure the confidence of citizens in Kazakhstani drugs.
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