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Vladimir Krasnikov: "CPhI Japan 2015 and CPhI Russia 2015 trade shows are effective venues to boost our business"

3 June 2015

CEO and Director General of the Russian Pharmalicensing Group (RPhG) discussed with us the results of their work at two largest international pharmaceutical trade fairs: CPhI Japan 2015 / ICSE Japan 2015 / P-MEC Japan 2015 / BioPh Japan 2015 / InnoPack Japan 2015CPhI Japan 2015, which took place from 22nd to 24th April 2015 in Tokyo and IPhEB & CPhI Russia 2015 (held from 27-29 April 2015) in Moscow.

- Mr. Krasnikov, RPhG was the only Russian company to take part in CPhI Japan 2015. Please tell us about your experience during the trade show.

- Indeed, we appear to have been a solitary trade show participant to represent Russia at CPhI Japan 2015. I was, to a certain extent, surprised by this - because, regardless of the economic sanctions, the Russian market remains interesting to businesses in Asian countries and this interest is still high. The trade show attracted over 700 manufacturers of finished pharmaceutical products (FPP) and active pharmaceutical ingredients (API) from Japan, China, South Korea, and welcomed nearly 17,000 visitors. The fair hosted 467 exhibitors from 27 countries. On the opening day of the event I offered my presentation on successful business strategies in Russia’s pharma market ("Increasing Market Opportunities in the Emerging Russia as its Powerhouse") where, along with a survey of the domestic pharmaceutical market, I gave an analysis of business activity by Japanese pharmaceutical manufacturers whose product was being marketed in Russia, and outlined specifics of the approval process for drugs, medical products, APIs and dietary supplements in Russia. A particular attention was paid to presentation of start-up strategies to enter the Russian market, which we developed for both newcomers and companies already operating here in Russia. The presentation was attended by approx. 200 trade fair participants; there was a vivid response from the audience to a section of our report that was dedicated to success stories of mergers and acquisitions, which for the recent 2 or 3 years led to creation of joint ventures between Russian and international manufacturers. A full version of my presentation is available from our English-language web-site: or our Russian on-line Pharmaceutical Bulletin with a Cyrillic domain name: фармбюллетень.рф. https://www.фармбюллетень.рф

As I have just highlighted, the interest to the Russian market from Japanese companies is pretty high, they asked numerous questions and were willing to negotiate. I must note, by the way, even though Japan has supported the economic sanctions against the Russian Federation, in relation to big inter-government deals that were signed so far, no single contract has been cancelled. As regards pharmaceutics, there are two big Japanese pharma companies that are now present in the Russian market. They are Takeda and Astellas with their 2014 sales in Russia totalling approx. $865mln., according to IMS Health. These companies’ pharmaceuticals are manufactured in European markets. On the whole, the number of Japanese companies who manufacture their product in Japan is low, as well as their sales volume in the local market. However, the aggregate volume of manufacturing production makes Japan second to the US pharmaceutical market. As to Japanese nutraceuticals, their annual sales in Russia are estimated as per IMS Health to reach $2.5 mln. Twenty APIs by 8 Japanese manufacturers are registered in Russia as approved pharmaceutical substances. It is evident that consolidation of partnership and beneficial co-operation with Japanese companies has very good prospects.

I would like to underscore that RPhG does already have a good portfolio of implemented consulting projects for Japanese companies. We are ready to share our experience with Russian companies interested to do business with Japanese. While dealing with Japanese companies you have to allow for certain differences: e.g. discussions and making a final decision might take a huge amount of time from the Japanese part because they always tackle all issues as much in detail as it needs to be.

We held talks with a number of Japanese companies and arrived at agreements on strategic partnership. We were also invited to attend CPhI in Seoul in September 2015 where I am going to submit my presentation as well. What I would like to note here is the overall exceptional quality of trade show management and logistics at CPhI Japan 2015, therefore I say thank you to the organisers of the event.

- You also participated in IPhEB & CPhI Russia 2015, which took place in Moscow from 27th to 29th April 2015. What is, in your opinion, the difference between these two trade fairs?

- I believe the Moscow fair is somewhat behind the event in Japan in its scale. Yet the trade show in Moscow attracted over 3,000 specialists from 56 countries while almost 250 companies from 40 countries were represented at the exhibition. I noticed there were many API manufacturers from China, exhibitors from South Korea and India. Of course, unlike the Tokyo trade show there were more companies from Europe. The business atmosphere at the fair was very favourable. We had an opportunity to meet our long-time business partner s from abroad, introduce to them our Russian associates, and talk to various new pharmaceutical companies from Europe. I am quite satisfied with the results of our efforts during the trade fair: we extended several contracts with our partners from Italy and India, we concluded new interesting partnership agreements. Following up on the trade show leads, we are planning to sign 5 or 6 licensing contracts with foreign pharmaceutical companies in the next coming months.

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