According to the Decree of the President of the Republic of Uzbekistan Shavkat Miromonovich Mirziyoyev (pictured) “On additional measures to accelerate the development of the pharmaceutical industry of the Republic in 2022-2026“, the pharmaceutical industry has been granted a number of benefits, in particular:

• state registration of new pharmaceutical products produced by domestic manufacturing organisations is carried out for an unlimited period;
• domestic manufacturing organisations that have a certificate of Good Manufacturing Practice (GMP) and ISO:13485 are exempt from mandatory certification;
• 75% of the expenses of domestic manufacturing organisations for registration of pharmaceutical products in foreign countries are covered from the Fund for Support and Development of the Pharmaceutical Industry.

Moreover, within the framework of the Decree, in order to reduce the existing restrictions in the sphere, the following has been cancelled:

• prohibition on the collection of donated blood and the production of pharmaceutical products based on it in private capacity;
• restriction on the conducting of clinical trials of medicines on healthy volunteers;
• restriction on the production of medicines having the same composition by one manufacturer under different trade names based on international brands.

The above mentioned benefits and preferences will allow to increase the volume of the pharmaceutical market. In particular, in 2022, the volume of the domestic market in the pharmaceutical sector of Uzbekistan amounted to $1.5 billion, 25% of which is provided by local production.

According to the Agency for the Development of the Pharmaceutical Industry, by the end of 2022, 212 pharmaceutical manufacturing enterprises are operating in the Republic. In particular, 87 of them specialise in the production of medicines, 38 in medical equipment, 87 in medical devices, and 142 pharmacies in the preparation of medicines.

In addition, there are 578 organisations engaged in wholesale sales, as well as 15,799 pharmacies and their branches engaged in the retail sale of medicines and medical products.

Production dynamics.

The implemented measures and the conditions created for the development of pharmaceuticals in recent years have begun to pay off. By the end of 2022, local enterprises produced pharmaceutical products totaling 4.12 trillion sums, and the volume of production increased by 14% compared to the same period in 2021. In particular, in January-November 2022, the volume of production of medicines containing penicillins, streptomycins or their derivatives increased by 24%, medicines containing alkaloids or their derivatives by 65%, as well as medical cotton wool, gauze and similar pharmaceuticals by almost 30%.

In 2022, 4 pharmaceutical enterprises were established, and the level of localisation of 284 medicines, 80 types of medical devices, 13 types of medical equipment, including medicines belonging to the groups of dentistry, oncology, toxicology and pulmonology, has increased.

REMEDY GROUP has mastered the production of “Antikovir” against COVID, ZUMA PHARMA has mastered the production of medicines “Enoxaparin” and “Insulin”, BETA UBK INTERNATIONAL has mastered the production of anti-oncological medicines in syringe pens for the first time. The TASH-BEL MED joint venture has launched the production of a new type of implants for traumatology and orthopedics. By the end of 2022, goods worth 2.2 billion sums were produced for products included in the localization program, the growth rate, compared to the plan, was 118%.

Significant progress has also been made in the implementation of international standards in 2022. According to the results of last year, 95 (45%) of 212 pharmaceutical enterprises operating in Uzbekistan have implemented international and national standards. The ISO 9001:2008 standard was implemented at 59 enterprises, the ISO 13485 international standard was implemented at 6 enterprises, the GMP standard was implemented at 28 (38 in total), the GDP standard was implemented at 30 enterprises and the GLP standard was implemented at 1 enterprise.

Foreign economic activity.

Most of the pharmaceutical market in Uzbekistan is still satisfied by imported products. Nevertheless, in 2022, as a result of an increase in local production, the total cost of importing pharmaceutical products decreased by almost 20% compared to 2021, and amounted to $1.3 billion. Pharmaceutical products are mainly imported from India, Latvia, Russia, Georgia, and the USA.

On the contrary, there was a significant increase in the volume of exports of pharmaceutical products. By the end of 2022, pharmaceutical products and services were exported in the amount of $150.61 million, the plan was fulfilled by 100.4%, compared with the forecast. In January-November 2022, the volume of exports of gauze and other textile medical equipment increased by 41%, and the volume of exports of medicines containing alkaloids or their derivatives increased by 24%. In addition, the geography of exports has been expanded from 34 to 39 countries. Last year, Ubeki medicines managed to enter the markets of such new countries as Yemen, Estonia, Slovakia, Poland and China.

Investment activity.

In 2022, within the framework of 42 investment projects included in the Decree of the President of the Republic of Uzbekistan “On additional measures to accelerate the development of the pharmaceutical industry of the Republic in 2022-2026“, $83.1 million (100% of the plan) of investment funds (including $33 million of direct investment) were disbursed. 372 new jobs were created as a result of the launch of 10 projects with a total cost of $31.9 million. In particular, in the Bukhara region, LLC Le Uat De Bukhara launched an enterprise for the production of medical gauze and cotton wool, and in Samarkand, a joint venture of LLC Samarkand England Eco-Medical implemented a project for the production of infusion solutions worth $9 million.

The industrial site of the innovative research and production pharmaceutical cluster Tashkent Pharma Park has been expanded and 7 investment projects worth $200.39 million have been implemented.

In particular, the company Haema Tech Limited (China) launched the project “Construction of a pharmaceutical plant for the production of blood products and a network of plasma centers with an industry clinical and diagnostic laboratory” in the amount of $96.5 million, and the company Kusum Healthcare (India) – the project “Construction of a modern complex for the production of solid dosage forms” in the amount of $10.8 million.

Cultivation of medicinal plants.

In recent years, the demand for medicinal plants has been increasing in the medical and pharmaceutical industries. The flora of Uzbekistan is very diverse, and many plant species are of particular value due to their healing properties. On the territory of the country, the medicinal properties of 750 species of more than 4.3 thousand species of plants have been determined. Of these, 112 species are currently registered for use in scientific medicine, and 70 species are actively used in the pharmaceutical industry.

In order to widely use medicinal plants in the prevention and treatment of diseases, the Presidential Decree “On measures for the organization of cultural cultivation, processing and widespread use of medicinal plants in treatment” was adopted. The resolution provides for the allocation of land for plantations of medicinal plants in 2022-2026, defines a list of areas specialising in the cultivation of medicinal plants on the principle of “One district — one product”, as well as a “road map” for the expansion of cultural cultivation and processing of medicinal plants, and promotion of their use among the population.

Training of personnel.

In order to train highly qualified personnel for the pharmaceutical industry, on May 17, 2022, the Cabinet of Ministers adopted a Resolution “On the organization of the activities of the Pharmaceutical Technical University in the innovative research and production pharmaceutical cluster Tashkent Pharma Park“.

The Economic Development Cooperation Fund of the Eximbank of Korea provided Uzbekistan with a loan of $83.7 million for a period of 40 years with a grace period of 10 years to finance the project of establishing the University. The Pharmaceutical Technical University, in cooperation with the Universities of Sunderland and De Montfort in the UK, offers students British higher education programs in the field of pharmacy and natural sciences.

Development prospects.

In order to maintain the health of the population and educate a healthy generation, one of the priorities is to consistently provide the population with high-quality and affordable medicines. In particular, as a result of the implementation of measures of the New Uzbekistan Development Strategy for 2022-2026, up to 80% of the annual demand for pharmaceutical products in the next five years will be provided by local production.

In 2023, it is planned to increase the volume of pharmaceutical production by 24% and bring it to 5.1 trillion sums. Also, in order to optimize the volume and composition of pharmaceutical imports, it is planned to launch the production of 300 new types of pharmaceutical products, export pharmaceutical products and services worth $210 million.

In order to achieve these goals and indicators, several investment projects are also planned to be implemented this year. As part of the investment program, $128 million of investments will be disbursed in 2023. 6 major investment projects with a total cost of $26.6 million will be launched, as a result of which an additional 1,000 new jobs will be created in the industry.

Forecast parameters for the development of the pharmaceutical industry in 2022-2026.

* in the prices of 2021

Conclusions and suggestions.

As mentioned above, significant progress has been made in the development of the pharmaceutical industry in recent years — the level of providing the population with high-quality and affordable pharmaceutical products has increased, the import of medicines has decreased due to the development of domestic production. But at the same time, there are still problems waiting to be solved.

The experience of many countries has shown that the creation of special industrial zones can become an important factor for economic growth. Eight free economic pharmaceutical zones have been created on the territory of the Republic, but it cannot be said that all of them are provided with the necessary infrastructure.

For example, due to a normal power outage, the operation of the equipment will stop, which may negatively affect the quality and consistency of the manufactured medicines, and the lack of evidence of compliance with the relevant quality standards (daily and hourly reports on the storage of medicines under the necessary conditions and temperature, the absence of changes in composition under the influence of external factors, production in the necessary environment), in turn, it may prevent obtaining permission to sell the medicines. In this regard, when organising pharmaceutical economic zones, it is necessary to pay serious attention to the reliability of the infrastructure.

—————————————————————————————————————

“Uzbekistan shows other countries by its example how to fight poverty,” says Abhijit Banerjee

—————————————————————————————————————–

Another critical problem facing the country’s medicine and pharmaceutical industry is the shortage of highly qualified personnel. In particular, the demand for pharmacists, employees with higher education in chemistry and biochemistry, technicians-specialists in the use of scientific equipment, engineers familiar with the equipment used in the production of medicines, as well as with quality control processes increases every year. In such a situation, a visa-free regime or at least the introduction of a simplified visa procedure for foreign qualified workers engaged in the installation and maintenance of technological lines may be a good way out. Thanks to this, it is possible to achieve a simultaneous reduction in the transaction costs of foreign direct investment in a drug manufacturing enterprise.

It should be recognised that in recent years, dependence on medicines has sharply increased in Uzbeki society, which sometimes ends in death. On the one hand, this is due to the fact that most people take any medications without a doctor’s recommendation, and on the other hand, some “opportunistic” doctors put their own interests above the health of patients. It is not uncommon for some doctors to prescribe the products of pharmaceutical companies with which they cooperate, instead of those medicines that the patient really needs.

Banning such cases and imposing strict penalties will help prevent such incidents.

For example, in South Korea, if a doctor receives money for adding a medicine to a prescription from a pharmaceutical company, he may lose his licence, and the company’s product may be excluded from the list of products covered by the National Health Insurance System. To prevent such situations, it may be necessary to take measures that completely exclude cases of “prescribing” products of pharmaceutical companies with which doctors themselves cooperate, and to fully implement the national health insurance system as soon as possible.

Jamshid Akhmatov, Centre for Economic Research and Reforms under the Administration of the President of the Republic of Uzbekistan.