Business models of big pharma in Russia: A pharmaceutical value chain perspective

Abstract

Large pharmaceutical companies (commonly referred to as Big Pharma) determine transformation trends in the global and national pharmaceutical market, make the largest investments in RD to create new original medicines, act as leaders in the processes of creating cross-border pharmaceutical value chains. In recent years, more and more Big Pharma companies penetrated the Russian pharmaceutical market. The purpose of this work is to identify the business models of Big Pharma companies in Russia from the point of view of their participation in a particular link of the pharmaceutical value chain, as well as to assess future trends. Based on the analysis of the collected information, we identify the following business models for Big Pharma companies: export model of supplying market; model of transferring RD links; production localization model at owned enterprises; model of contract manufacturing; model of participation in the links of wholesale distribution and retail. Foreign companies in Russian pharmaceutical market can use several models, and the more models are used, the deeper the company is integrated into the pharmaceutical chain. Such companies as Sanofi, Abbott, AstraZeneca, and Takeda are engaged in their own localized production and contract manufacturing, and they also exporting produced medicine abroad. So, they are the ones that are mostly involved in the pharmaceutical value chain in the Russian market. The transformation of business models of foreign pharmaceutical companies will be influenced by two interrelated factors: foreign strategy and geographic priorities of Big Pharma and the role of Russia in this strategy, which in turn is determined by the specifics of the Russian pharmaceutical market (compared to other countries).