Russian Pharmaceutical Industry Leader
25.06.2020
Rapid-Response Platform
Rapid-Response Platform
Will Russia be quick to develop the vaccine against the coronavirus and when will it be produced in the quantity required? What has to be done today to win over future pandemics? And how to sustain growth if you have hit the ceiling at the domestic market? Vikram Punia, President of Pharmasyntez Group of Companies, answered the questions of Alina Nazarova, the head of A-club.
Alina Nazarova (A.N.): You are the head and the founder of Pharmasyntez Group of Companies. But what job title describes you the best: a manager, an entrepreneur, a marketing expert, a technologist, a GR-specialist? Which part of business is impossible without you?

Vikram Punia (V.P.): First of all, I consider myself the administrator and processes organizer, among other things. As a leader, you have to be not just a manager, but also an idea machine. And I do come up with ideas that thousands of people follow. At its simplest, my task is to determine a focal area and then carefully organize the employees who will translate all our projects into reality. To be sure, it is not as if everything inside the company is invented by me only. The business has grown enormously, and now it is too much for one person. I have knowledgeable and energetic colleagues capable of independently making and implementing excellent offers. Nevertheless, it is still my task to come up with the most of our ideas.

A.N.: You used to approve of the idea of growing faster, but drawing fewer dividends. Today, Pharmasyntez is already a big history. Have you revised your opinions with regard to both growth and award? 

V.P.: I haven’t revised my opinions yet. We reinvest all that we earn, and I’ve received next to nothing for the last five years. But it is my conscious choice to invest in manufacture, development and technologies, which I have no regrets about.

A.N.: I’ll ask you about development under the new conditions a little bit later, but for now I’d like to understand how unexpected or even unpredictable the events associated with COVID-19 may have become for you personally and for other professionals as well. Why has the humankind never learnt to predict such epidemics taking into account the previous experience with SARS, MERS, Ebola and others?

V.P.: As you know, we produce, among other things, drugs intended for the treatment of bacterial and viral infections. Furthermore, with respect to these drugs, we are number one in Russia. Therefore, we have a professional view on the struggle of humans versus microbes and humans versus viruses. Sometimes people manage to stay ahead of or at least keep up with vaccines, but viruses and microorganisms are also “up-and-doing”, they are constantly mutating, constantly changing. Being professionals, we know that the balance in this game is sometimes disrupted, and COVID-19 is definitely the case.

But this is about understanding a common pattern, and not about the ability to foresee. We’ve had no doubt that epidemic or even pandemic is possible, but we’ve turned out to be unprepared to quickly and properly respond to this situation. On the other hand, it has to be admitted that the humankind is learning some lessons, and some necessary measures have been taken in time, which saved or still may save us from much more terrible statistics. For instance, immediate scientific and production response is what matters. You be the judge, an unknown virus emerged at the end of 2019, and in autumn of 2020, I’m sure, we’ll have the first vaccines. I’d like to make a point, the first vaccines, not the first vaccine. This has never happened so fast before. 
A.N.: From the very beginning of the pandemic, the society has split down the middle on this issue. One part of it, including authorities of most of the countries, are not inclined to underestimate the threat and do not consider any measures taken to be excessive. The other part speaks about an obviously exaggerated nature of the issue, about disproportion between the governmental response and the genuine threat from the medical point of view. They also add that economic after-effects of these restrictions can be even more devastating including in terms of mortality. Which group do you belong to?

V.P.: There can be no clear-cut answer to this question. Both factions have their own reasonable arguments. But it’ll be necessary to choose the lesser of two evils. On the one hand, lives and health of people are at stake; on the other hand, their economic well-being is at risk. If you ask me, and I consider myself as a no-nonsense man, life and health are undoubtedly of greater importance. Therefore, all the measures associated with the lockdown seem absolutely balanced to me. It is possible to return lost profits and restore the economy of specific industries and businesses in two or three years, but to make money in the future, you have to maintain your health today. I understand and acknowledge that there are people who now really have nothing to feed their children with. There can be no simple solutions, but what would these people choose if they happened to be in an intensive care unit? Or leaving it with a certain disability? I don’t think they’ve ever raised this question in that way, but they should have. It is far more likely that even economists opposing the quarantine measures would have changed their views under similar circumstances. But for lockdown, the situation would have been much worse in all countries. Was it necessary to step up the measures taken? It’s hard to say. At least, I see that everything done was timely, and that’s a good start.

A.N.: What is your opinion of the Russian authorities’ response to what is happening? I mean the level and the overall preparedness of the Russian health care system to events like these? There seems to be a good many complaints about it. 

V.P.: I’ve never seen such a rapid response of the Ministry of Health, Ministry of Industry and Trade, Ministry of Defense and the whole government before. I don’t even remember similar cases in the history of modern Russia when all the authorities had ever shown agility of such kind. For sure, no process is without its own difficulties, the result obtained depends not only on the decisions of a particular ministry, but also on the actions taken locally. Where there is a shortage of competent staff, “handwaving” usually takes place, a lot of absurd things happen, which patients could just complain about. But these are isolated occasions. Just imagine what would have happened if the government had been late or made wrong decisions – we would have seen completely different statistics.

A.N.: Is pharmaceutical industry also being understaffed?

V.P.: Staff remains a sore point to us. Nobody has systematically engaged in their training for the last 20 years. In Russia, people were simply not taught to manufacture drug products and crude drugs. But I am very pleased with the today’s students; they are quick learners and pick things up. We give guidance, work with universities, institutes and colleges, and are actively engaged in training of our future staff. This is a balanced position of a large company.

A.N.: Many professionals claim that India is the only country having the production capacities that are large enough to quickly provide the world with the vaccine. Do you agree with that?

V.P.: I wouldn’t say that countries other than India won’t be equal to the task. India is just traditionally thought of as a manufacturer of generic drugs. Huge production facilities are deployed there, and there is a sufficient number of well-trained people there. Actually, you may just as well say that Italy is a manufacturer of fashionable clothes or call Russia a factory of spaceships and caviar. All these won’t mean that other countries cannot do the same. Believe me, the situation is changing everywhere. Pharmasyntez alone is able to produce 150 million vaccine doses and provide the whole Russia with it within 300 days. The exact timing will depend on the form of the vaccine. To add to that, there are other high-powered companies that vaccine developers will contact. So, if we unite as industrial partners, this task will be well within our power in six months.

A.N.: And are you sure that this large manufactures’ alliance will appear?

V.P.: When it comes to human lives, competition issues, market split issues as well as profit issues should not arise. These are good topics when it comes to making money, but now we are struggling against the pandemic. To my mind, it is the government that should distribute work. Promptness and availability of the vaccine is a priority. Seeking an opportunity to make money on what is happening is not a good idea. All the efforts must be aimed at supporting people, leaving the rest for the later. I’m not representing all manufacturers, but our company is ready to work almost for free so that all the citizens of the country will afford vaccines of high quality. 

A.N.: Western drugs are automatically better than domestic ones. Such point of view is shared by many Russians, and they are often ready to pay extra for foreign drugs. Do you disagree with it?

V.P.: By no means do I agree with the statement that we are losing to someone in quality. But what we do know is that one bad fish can spoil the whole pond. Today, seven out of ten packs sold here are made in Russia and this could aggravate the effect of any mistake. It is enough for couple of plants to stop upholding the established standards to destroy the reputation of the others. There may be about a thousand pharmaceutical plants in Russia. Claims are raised to everyone – both European and American manufacturers, but since two thirds of the total drug volume are produced here, you begin to feel like the Russian drugs are criticized more than the Western ones. But this is not true. By the way, in so far as the quality of drugs is concerned, the Ministry of Industry and Trade, the Ministry of Health, and Roszdravnadzor, the Russian health care regulator, respond immediately.

A.N.: Could all the buzz and efforts taken on the coronavirus somehow get things moving in other spheres – from HIV to tuberculosis? 

V.P.: We must not forget that drugs that exist today are capable of treating more than 90% of all known diseases. The COVID-19 is a rare phenomenon and it has demonstrated well that the union of manufacturers, scientists, and politicians both within one country and internationally will always work. For example, manufacturers are working with the Ministry of Industry and Trade in online format, we send lists of drugs on a weekly basis, inform them about the quantity and the place, how many of them are being produced now, we get information on the place and quantity to be delivered. Nobody sees this, but the results are clearly visible – the required drugs can be found everywhere. In fact, the communication is even tougher than I have described. Certain groups have been created in WhatsApp, and we are in touch with the Ministry of Industry and Trade almost daily. Is it ever possible to achieve such comprehensive cooperation in solving any other problems? No one knows. We are now talking about a unique situation when everyone had to act quickly. And promptness is probably its key characteristic.

A.N.: What are the place and the role of Pharmasyntez in the present-day situation? How do you get involved? What points of growth have you found?
V.P.: We remain number one in Russia in terms of supply of anti-coronavirus drugs, having gone far beyond 1 billion rubles in terms of value. It may be said without any exaggeration that social responsibility is increasingly important to us. Since much is given to Pharmasyntez, much is expected from it. Let me explain what is at stake. Until now, the main anti-viral drug for the treatment of the coronavirus infection is lopinavir + ritonavir. We have been its only national supplier. There is another example of linezolid, an antibiotic against pneumonia (it has been supplied to almost all hospitals across the country by Pharmasyntez). Let’s take paracetamol for infusions (it is intended for the relief of severe and moderate conditions): we managed to ensure supplies for the whole Russia. Just imagine that but for us, the country could have been left without it. How then to reduce a fever in a person who is in an intensive care unit? What would the government do? So, at these moments, we feel huge responsibility for both patients and doctors with no thoughts of how to make more money. Pharmasyntez has always kept the prices below the maximum limits and hasn’t benefited from actually having a monopoly.

A.N.: As a top manager, have you been working harder during the pandemic?

V.P.: Anyway, I’ve been working hard, but over the course of these one and a half or two months of working from home, I’ve become a little bit more efficient. You start at 7 a.m. saving a lot of time on not having to get dressed and do up your tie; and above all, you don’t have to go anywhere. You can stay in your pyjamas; you just need to be in touch with your colleagues all day long. Once you are to supply drugs to all the hospitals in the country, so you’ve got a lot of work to do. After all, logistics is also our task, we deliver to the door.

A.N.: How do you see your development over the next two or three years? What areas do you intend to invest in and what performance targets are you going to achieve?

V.P.: Statistics, not me, say that Pharmasyntez has been one of the fastest growing companies in the past five years. In our industry, we are always in the top three, to say the least. In 2019, we grew by 36%. Our short-range plan is to work intensively at the market of hormone drugs, which is so dependable on import. Russia is importing more than 90% of such drugs, but in Tyumen, we’re constructing one of the largest plants in Europe. What is more, Pharmasyntez has made a great progress in the fields of cardiology and oncology, with an ultra-modern plant for manufacturing oncology drugs having been constructed in St. Petersburg. There is quite a lot of work to do and directions to develop. We may not be the largest investor, but we are certainly one of the largest investors in the pharmaceutical industry having invested more than 12 billion rubles for 2 years; we create about 400-500 new jobs every year. In 2018, our turnover was 16.8 billion rubles; in 2019, it was already 22.7 billion rubles. This year we’ll try to reach the turnover of 30 billion rubles. In other words, we want to double in two years, which is, to put it mildly, not typical of our industry.

A.N.: How long are you going to maintain such pace? Is there a certain level starting from which you can just grow and work without beating records, since the larger the company becomes, the harder it is to ensure such results? 

V.P.: Our goal is to ensure constant growth and we will change ourselves and our behavior to achieve this. Let me explain, our company has started to produce drugs as part of import substitution, it was our focus. Now we are focusing on export. If import substitution and business turnover as a whole grow 30-50% per year, the share of exports increases multi-fold each and every year. It was our conscious choice; after all, we understand that the Russian market has no infinite capacity for expansion. In many areas, we occupy more than 50% of the entire market, which is quite a big share and it turns to be impossible to increase it here. We need to switch to export. We have moved from manufacturing generics to developing original innovative drugs and are already registering them both in Europe and the USA. All of this will lead to this very growth. I see no reason to slow down in the next five to seven years. We definitely have an understanding of our development until 2025, but time will show. We are going to gradually implement the plans, and closer to home, some adjustments may appear. However, the main things are already known.

A.N.: What export areas do you consider of prime importance for you? 

V.P.: In a word, now it is oncology. Hormonal drugs will be of prime importance to us in the next 2 to 5 years. Some of them are so complex that only 10 companies in the whole world are well-positioned to produce them. We are going to become one of them. Particularly, innovative drugs are worth mentioning, because after 2023 we will begin to supply them to any and all developed countries. We have a distinct vision of the future market, and we clearly understand what, where and in what quantity will be required. I suppose we will be able to work anywhere in the world, but in my experience, Europe and North America will be the most comfortable areas. The rules are much stringent there, but clear and understandable; and when there is strictness and discipline on the one hand and transparency – on the other, it is much more interesting for professionals to play. 

A.N.: If I may ask you a question about investment. Are you interested in anything outside pharmaceutical industry? 

V.P.: IT? Internet? Resource development? No. I don’t want to see into anything outside pharmaceuticals within the next five years. It is not about money, your job should bring joy to you, and you have to understand what you do. I am not interested in producing chipboards, fiberboards and plywood; mining coal and bitcoins is of no interest to me either. I receive different offers, but I don’t want to go deep into it. As a manager, it will be quite easy for me to quickly get into the topic, understand a new business and get started. If you are clever enough, you have to be able to adapt. But the point is that other spheres are not as attractive to me as my business is. And after all, I work no less than 12 hours a day, but I wasn’t born to plainly make money and kick the bucket in the office. I am a family man, I’ve got children, I’ve got a little daughter, and I want to spend more time with them at home. I want to live for myself. Therefore, I won’t probably diversify my business. At least, I am not planning to do this in the nearest future.

A.N.: And do you monitor the situation in the sphere of biomedical technologies? May you be purchasing something?

V.P.: We’re looking at startups with good research credentials. We cooperate with them and sometimes buy them. Several such projects are currently underway. But in general, our approach is not to search for independent teams but to work with scientific institutions (Russian ones). And we’re satisfied with this strategy bringing success. 

A.N.: Every day we hear that the world will change significantly after this pandemic. Do you believe in it? How will our habits change?

V.P.: In the long run, I imagine it this way: first, the vaccine will become available, then, in 2 years at most, everything will come full circle and we will continue living in the world we got used to live in; COVID-19 will be in history books and reduced to memories. There is nothing supernatural capable of changing the way things are.
Now, when we are mainly staying at home, when our fears are strong enough, something momentous may seem to be happening, but I don’t believe the statements saying that “the world will never be the same”. This is simply not true. Everything will be alright. The world used to become “the same” after far more serious events. 

A.N.: But you’ve said that starting work at 7 a.m. from home is more efficient than going to the office. Perhaps, you now decide to do without it and face-to-face meetings, don’t you?

V.P.: Listen, we are solving different problems. At peak times, we needed to accelerate production and provide the entire population with the drugs realizing that if we hadn’t, a disaster would have happened. The plants are working and what you have to provide is coordination and support. Online consultations are more than enough. But if you have to think of the future progress and prepare for the development of innovative drugs, everything changes. In this case you must meet people personally; it is quite difficult to engage in development from home. Sometimes it is a matter of mentality. Let’s take our Korean or Chinese partners: if I don’t meet with them, if we don’t look into each other’s eyes, it will be next to impossible to earn their confidence. And to do this, you must not only to go to the office, but also you need to go on business trips a lot, you need to audit industries you intend to cooperate with, you need to delve into the finer points of technologies on the spot. In short, staying at home you can become more efficient when you are presented with a single urgent task, but it is unrealistic to deal with all the aspects of the business from home. You will lose.

A.N.: And if we talk about the health care system in general and the pharmaceutical industry in particular, what should be done after we get out of this crisis?

V.P.: You know, speaking about infectious diseases, it is necessary to be in constant readiness for action. We do know that every 5-10 years we have either human bird flu, or hog-flu or Ebola, or COVID, or something else. The pharmaceutical industry, together with the scientists, has to develop a platform for quick response to such situations. It is known that there are viruses, bacteria and superbugs; by studying their structure and understanding the spectrum of human body likely responses, we will find out what means and protective measures we will potentially need. We will be able to do the most of the preparatory work for vaccine development and eventually, in an ideal-case scenario, we will be able to respond to a new danger immediately. And if, Heaven forbid, we’ll have COVID-28 instead of COVID-19, by taking a strain of the virus, virologists will be able to develop a vaccine within one month, because the platform will save a lot of time. It will also allow them to quickly make it to preclinical and clinical trials. In my opinion, there has been no such cooperation yet. Even the emergency didn’t lead us to global partnership, what I see is local stories only. Dozens of vaccines are now being developed, and instead of joining hands everybody is busy with the so-called drug race – whoever finishes the trials faster and introduces the drug to the market. But the changes I’m talking about are not about the monumental reconstruction of the system. In fact, the market regulates all the process quite effectively. The only thing that needs changing is the degree of our readiness for both epidemics and pandemics. All countries must have the same answer to the question: what if the situation repeats itself? 

A.N.: Do you believe that Russian vaccine will soon become available?

V.P.: Yes, surely. I believe because I am myself engaged in this process, I know who is doing what and what stage they are at. We and other manufacturers are already expecting the vaccine developers to contact us. Let’s wait for clinical trial results, but even now I can say that Russia is at least one of the top five countries in terms of the vaccine development. And this is undoubtedly good news.