Western Sanctions Won't Disrupt Essential Medicines to Russia, Says Indian Pharma Export Body

Several multinational companies have withdrawn their exposure to the Russian market after the "economic war" launched by US and European nations against Russia in response to Moscow's military operation in Ukraine.

Western sanctions have so far focused on Russia's financial institutions without targeting the medical sector.

However, Russia's federal medical regulator Roszdravnadzor and a national association of pharmacies admitted that there has been a shortage of insulin because of "urgent consumer demand."

Western markets are fulfilling Russia's primary requirement of medicine and medical equipment.

Sputnik spoke with Ravi Uday Bhaskar, Director General of the Pharmaceuticals Export Promotion Council of India - a unit set up by India's Ministry of Commerce and Industry - about the impact of western sanctions on pharma exports.

Sputnik: How much exposure do Indian pharmaceuticals have in the Russian and CIS markets? Do you foresee any disruption in business with Russia?

Ravi Uday Bhaskar: In the past financial year, we exported $590.8 million of pharma products representing 6.95 percent growth. Russia is the fourth-largest export destination for India's pharma industry.

Our exports to the Commonwealth of Independent States (CIS) was $1.178 billion representing a 30 percent annual rise in 2021. We also witnessed a massive 40 percent jump in demand for Indian medicines in Ukraine last year.

Indian pharmaceutical firms have operated in Russia for a long time. Most pharma companies spend lots of money getting registration and market authorisation for supply to Russia and other parts of this region. That's why we cannot stop our exports to Russia in a drastic manner.

Sputnik: Russia's pharma market is worth around $20 billion, and European firms meet a large part of the demand for medicines and medical equipment. How will you proceed with your businesses in the shadow of western sanctions?

Ravi Uday Bhaskar: Sanctions do not apply to medicines and agriculture. So, even discontinuation of supply in the shadow of western sanctions may not have a serious impact because Russia possesses its own capabilities to manufacture active pharmaceutical ingredients as well as formulations.

In fact, Russia's domestic market is good, and they are capable of getting things done.

Sputnik: China is a major supplier of active pharmaceutical ingredients (APIs) which are the raw materials for medicine. If Beijing tries to fill the void in the Russian market created by European countries ceasing to supply medicines, do you fear any disruption in the supply of basic materials?

Ravi Uday Bhaskar: I do not think so. China is one of the most prominent suppliers of APIs, intermediates, and basic chemicals. That's why it will not have any serious effect on supply of raw materials from China.

Europe also imports APIs and other raw materials from China. Ukraine may face problems with raw materials but Russia will not face any disruption as it has good relations with China. And Russia itself is capable of tackling challenges resulting from western sanctions.

Sputnik: What kind of assistance do you expect from the Indian government in the present situation?

Ravi Uday Bhaskar: Logistics may be one of the issues, but it is not in the government's control. Once our products go to Russia through Europe, it's a problem. They may need to take an alternative route to Russia via China, but this may also face problems.

However, we can assure you that it is not going to be a problem for Russia as of now although we could face problems in CIS markets, and we may not experience much export growth in this region because of logistic issues.

Sputnik: What are the chance for advancement or progress in capturing the Russian market amid the ongoing tensions?

Ravi Uday Bhaskar: Our exports to Russia hover around $500 to $600 million a year and although demand in the Russian market is about $14 to $15 billion annually. So, there are opportunities, but these opportunities are not confined to India alone.

Our pharmaceutical firms do not have so many compliance issues in Russia which means rapid advancement would be easier for us than for other nations. But we have to wait a bit longer to understand the exact situation.