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Putin says foreign drugmakers earn too much on Russian program

Russian President Vladimir Putin said drugmakers such as Johnson & Johnson and Novartis AG are making too much money on the state’s $1.3 bln (€0.75 bln) subsidized-medicine program and called for curbs on their „appetites.”

„The appetites of pharmaceutical companies should be reduced,” Putin told Health Minister Mikhail Zurabov at a government meeting yesterday, in remarks posted on the Kremlin’s Web site today. „They benefit from more expensive drugs.” Parliament this month approved a bill almost doubling spending on medicines this year to 35 billion rubles, including 16 billion rubles to cover debt to drugmakers accrued in 2006, Zurabov told Putin.
Johnson & Johnson, the world’s largest maker of health-care products, led producers selling medicines under the program in the third quarter with a 12% share via its Janssen-Cilag unit, according to market researcher Pharmexpert. Novartis AG was No. 2 with 8.4%, followed by Roche Holding AG with 8.3% and Sanofi-Aventis SA with 5.7%. The funding gap was caused by changes to the social welfare program that gave people the option of accepting cash instead of medicines, Zurabov said. Some of the people who opted for free drugs chose the most expensive kinds and the program ran out of money as a result, he said.
Putin told Zurabov to come up with proposals to share the financial burden with local governments and to make sure supplies of medicines aren’t interrupted. About 8.7 million Russians, or half of the people eligible for the program, opted for products instead of cash and received more than 133 million individual items in 2006, Zurabov said. (Bloomberg)