Western Pharmaceutical Manufacturers Continue To Supply Drugs To Russia

Medical companies say they are obligated to continue supplying medicines, vaccines and medical equipment to Russia, even as Western sanctions and other measures pose obstacles.

The invasion of Ukraine prompted Western automakers, luxury goods suppliers and other companies to leave Russia. However, manufacturers of drugs, vaccines and medical devices continue to do business, claiming to have an ethical responsibility, although some drug and device firms have opposed the invasion and wound down operations.

“If our products don’t reach patients in need, people will die or have serious consequences,” Johnson & Johnson CFO Joseph Volk said at an investor conference on Tuesday.

Johnson & Johnson, which sells medicines and medical equipment, plans to continue supplying essential goods to Russia. Drug distributor AmerisourceBergen Corp. said it had stopped new business in Russia, but would continue distributing some cancer drugs and would complete clinical trials.

Bayer AG’s pharmaceuticals and horticulture divisions continue to operate in Russia. The seizure of seeds, pesticides and other products, according to a company representative, will exacerbate food shortages that have arisen as a result of the conflict over the important role of Ukraine and Russia in the world’s wheat supply.

AmerisourceBergen said it will continue distributing some anti-cancer drugs and complete clinical trials in Russia.

Photo: Kristoffer Tripplaar/Sipa USA/Associated Press

“Suspension of supplies for patients with cancer or cardiovascular disease would be ethically unjustified and would seriously affect the civilian population of Russia,” the spokesman said.

Russia is not a big market for Western medical companies. According to analysts and companies, sales in the country account for less than 2% of the global volume of companies. According to the marketing research department of S&P Global Inc., last year Russia imported about $700 million worth of pharmaceutical products from the US.

However, according to Moscow research company RNC Pharma, between 80% and 85% of Russian-made drugs depend on imported ingredients. Russian pharmaceutical companies are having difficulty importing key ingredients, says Pavel Rasshchupkin, RNC’s commercial director.

There is no drug shortage yet, but the devaluation of the ruble has pushed up prices, Mr. Rasshchupkin says. According to him, there is a panic buying in pharmacies.

Russian President Vladimir Putin on Tuesday signed a law on new “anti-crisis” measures, including a policy aimed at increasing the supply of domestic drugs and medical devices to the country, for example, the possibility of banning the export of certain drugs. The Interfax news agency did not mention the law about vaccines.

Many Western drug makers have issued statements expressing opposition to the Russian invasion, expressing support for Ukrainians, and making donations to help Ukraine and refugees.

Merck & Co., Pfizer Inc. and Bristol Myers Squibb Co., which continue most of their operations in Russia, are among the drug makers that have said they have suspended participation in clinical trials in the country.

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Bayer and other major companies selling over-the-counter drugs and consumer goods said they have removed ads from Russia. Direct advertising of prescription drugs is prohibited in Russia.

GlaxoSmithKline PLC said it would not enter into any contracts in support of the Russian administration or the military, such as agreements to supply vaccines for military immunization campaigns, a spokeswoman said. A representative of Royal Philips NV has stopped selling consumer products such as electric toothbrushes in Russia, but continues to supply medical equipment.

Some 300 biotech executives have signed a pledge to halt business development in Russia. “The goal was to influence Russian political thinking through those around Putin,” said Jeremy Levin, chief executive of Ovid Therapeutics Inc. and one of the authors of the letter. The bail made an exception for the transport of medicines.

The pharmacists also said they are working to protect their employees and ensure their medicines reach Russian patients.

Bayer said the seizure of its seeds, pesticides and other products would exacerbate food shortages resulting from the conflict; Bayer plant in Wuppertal, Germany.

Photo: Ina Fassbender/Agence France-Presse/Getty Images

So far, the companies have not reported significant disruptions to their supply chains or operations in Russia. Official sanctions did not apply to health products. Yet the sanctions are forcing companies to struggle to deliver their products and, according to supply chain experts and industry representatives, could lead to more disruptions in the future.

European, Canadian and US airlines have halted flights to Russia in response to the incursion and airspace bans, cutting off air travel. Major shipping companies have suspended cargo routes to the country, cutting off another trade route.

“Sanctions can and likely will affect pharmaceutical products in Russia,” said Julie Swann, professor of industry and systems engineering at North Carolina State University, pointing to the reduction in sea and air traffic. Companies are likely to use alternative ways to deliver drugs to Russia, perhaps via countries such as China and India, she said.

Goods can enter Russia by road, but many pharmaceutical companies have previously shipped their goods through Ukraine, said Cohen Burden, director of international affairs for the European Federation of Pharmaceutical Industries and Associations.

To redirect trade through, say, Belarus, companies need to implement new procedures to meet various customs and other regulatory requirements, said Dr Bearden: “The circumstances are very complex.”

Prashant Yadav, a supply chain expert at the nonprofit Center for Global Development, said it would be difficult for US companies to continue supplying drugs and serving the Russian market unless they worked with additional supply chain intermediaries to manage supplies and transactions.

—Evan Gershkovich contributed to this article.

Write to Denise Roland at [email protected], Jared S. Hopkins at [email protected] and Peter Loftus at [email protected]