Russia's drug market surges on new state plan

Russia's rapidly aging population which, in many other respects is a source of considerable concern, combined with a $1.4 billion state drug program (the DLO), provide a positive environment for drugmakers who are reporting a boom in sales.

Partly fuelled by a significant upturn in Russians disposible incomes, which witnessed inflation-adjusted growth of 8.7%, drug sales reached $9.0 billion in 2005, a 35% increase on the previous year. To date, foreign investment by drugmakers has been relatively weak, although some firms have started to make inroads into the Russian market.

Sanofi-Aventis, the French drug major, told the Wall Street Journal that its Russian operations are "expanding rapidly." Sanofi's general manager in Russia, Patrice Layrac, said: "the federal reimbursement program is an important step for Russia's health care system and is having a great impact on the development of the country's pharmaceutical market."