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How Did the Russian Invasion of Ukraine Affect Global Biopharma?

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The global supply of active pharmaceutical ingredients has been placed in jeopardy during the COVID-19 pandemic. The structure of the industry chain is gradually transforming as drug development and production processes shift from being concentrated in a few countries and regions to being globalized. However, before the pandemic even subsided, Russia launched an invasion of Ukraine. At least hundreds of ongoing clinical trials are affected by the war, causing delays and triggering another wave of panic in the biopharma industry.

Trials in Russia and Ukraine Affected

According to information on the website of the clinical research organization Global Clinical Trials, there are more than 500 clinical trials in progress in Ukraine each year. The average annual growth rate of the pharmaceutical industry is 11%, with more than 110 companies licensed to manufacture pharmaceutical products.

Russia’s biotech industry has also been considerably impacted by the tightened sanctions imposed by multiple countries. Data from the Global Clinical Trials website also shows that 70% of new European drugs are tested in Russia, with clinical trial approvals taking less than 2 months, and such efficiency has led to an annual growth rate of 1.3% in the total number of studies.

The Russo-Ukrainian War does not only stir up concerns amongst major pharmaceutical companies in Western countries but also cause further damage to India’s drug export. Based on the data from the Pharmexcil (Pharmaceutical Export Promotion Council of India), India exported $591 million worth of pharmaceuticals to Russia and $182 million to Ukraine in 2020-21. Meanwhile, Russia contributed 2.4% of India’s total drug exports, while Ukraine contributed 0.74%.  

Although there are no apparent serious losses in drug exports, for the time being, it will be very difficult to conduct research, production and trade in Russia and Ukraine once the war is prolonged. Indian pharmaceutical manufacturers have encountered similar problems in Iran and Venezuela.

Drug Development and Supply Chains Disrupted 

Biopharma companies currently known to be affected by the invasion of Ukraine include 11 out of 195 sites in a Phase 3 trial of Merck Sharp & Dohme’s Keytruda in combination with Lenvima for patients with endometrial cancer and 6 of 143 sites in a Phase 3 study of Regeneron’s Libtayo in combination with dual-agent chemotherapy for patients with non-small cell lung cancer. Other affected companies include GSK, AstraZeneca, Sanofi and Takeda, which are conducting studies in Ukraine. They are only able to provide close monitoring of the progress and take initiatives to ensure the safety of employees and their family members and the continued support of patients.

Enamine, a major Ukrainian research company with an agent in Taiwan, has been a key partner in the United States and Europe since its establishment in 1991. The company has been playing a key role in the development of new molecular drugs over the past 30 years after the Cold War. In recent months, the Kyiv-based company has been sending out emails to contact its customers. Operations at its headquarters have been suspended following Russian shelling, but fortunately, its branch office in the US has not been affected.

Highly specialized companies such as Enamine have thrived in the past by working closely with downstream industries to assist American and European companies in producing new drugs faster, but they are now being affected by the global turmoil. This is again bad news that will disrupt the supply chain in the post-epidemic era, making it even more unstable.

Big Pharma Restricts Activities in Russia 

Several major pharmaceutical companies have taken action against Russian aggression following unprecedented sanctions on Russia. 

Pfizer says it will cease all planned investments and all future clinical trials in Russia, though it will keep providing needed medicines to the patients already enrolled. The recruitment of new patients in ongoing clinical trials will also be brought to a halt. In addition, the company will donate all profits of its Russian subsidiary to causes that provide direct humanitarian support to Ukrainians. 

Other drugmakers declaring suspension or reduction of business activities in Russia include Abbott Laboratories, AbbVie, Bayer, Eli Lilly, Johnson & Johnson and Novartis. Punitive actions range from pulling back from non-essential spending to suspending advertising and promotions to ceasing capital investment projects in the country. Many of these will also donate their profits from remaining businesses in Russia to support humanitarian relief in Ukraine.

 

Written by ULA YANG
Edited and translated by Richard Chau

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