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The sovereignty of Russia in the area of pharmaceuticals: Challenges and opportunities

TERRA ECONOMICUS, , Vol. 21 (no. 3),

Pharmaceutical colonialism remains a sustained global phenomenon in the modern world, with Russia being a part of this landscape for decades. Efforts by domestically focused governments in pharmaceutically reliant nations to eliminate dependence have yielded only localized effects that lack political sustainability. Attaining the stature of “Big Pharma” corporation proves consistently elusive. Our analysis has delineated three distinct sectors within Russia’s pharmaceutical industry: the official foreign sector (54%), a private “shadow” sector that obscures owners and controllers, both domestic and foreign (43%), and state-owned enterprises (up to 3%). The industry’s regulatory framework is fractured between Russia’s Ministry of Industry and Trade and the Ministry of Health, precluding the state’s effective role as a centralized producer and client. This fragmented system is insufficient as a crisis response tool, incapable of securing pharmaceutical sovereignty over the long term, even with available resources. In response to sanctions imposed on Russia, the state apparatus employs an inertia-based model to address diminished availability of specific foreign drugs in the domestic market, thereby effectively sustaining the industry’s strategic non-competitiveness. We also examine a mobilization-based scenario for pharmaceutical industry development, oriented toward civilian and defense applications. This approach envisions a vertically integrated corporate structure, independent of ownership form, with the proposed establishment of the state entity “Rospharma” endowed with extensive authority at its core.
Citation: Gusev A.B., Yurevich M.A. (2023). The sovereignty of Russia in the area of pharmaceuticals: Challenges and opportunities. Terra Economicus 21(3), 17–31 (in Russian). DOI: 10.18522/2073- 6606-2023-21-3-17-31
Acknowledgment: The research was supported by the state assignment of the Government of the Russian Federation to the Financial University for the year 2023 on the topic “Development of recommendations for ensuring economic growth in Russia under conditions of sanction restrictions” (VTК-GZ-PI-37-23). The authors thank E.V. Balatsky for comments and suggestions on the article that helped strengthen it.

Keywords: pharmaceutical sovereignty; industry mobilization; state corporation in pharmaceuticals; import substitution; medicinal drugs

JEL codes: I18, L52, L65

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Publisher: Southern Federal University
Founder: Southern Federal University
ISSN: 2073-6606