News March
Russia changes DLO programme rules - How will it affect Richter and Egis?
Russia's Health Minister Mikhail Zurabov has signed a decree changing
the rules for the DLO Programme, under which the distribution of
DLO drugs is to occur by name of active ingredients or INN (International
Nonproprietary Name) rather than brand name, Citigroup analyst,
Robert Bonte-Friedheim said in an analysis.
He said this would make the DLO a “commodity generic" program,
similar to the generics market and was likely to increase the power
of distributors — and sharply reduce the value of generic drug makers'
brands, including those of Hungary's Richter and Egis. “We would
expect pricing pressure to increase for DLO suppliers, favouring
low-cost and low-quality Russian generic producers over higher-cost
and higher quality Central European drug makers," Bonte-Friedheim
added.
While this decree has the force of law, the analyst said it was
unlikely to be the last word. As with DLO changes proposed in the
summer of 2005, Bonte-Friedheim expects opposing forces to lobby
the government heavily. “We would expect patients, doctors, generic
drug makers and ministry officials themselves to favour a return
to a “branded generic" system," he added.
Source
http://www.portfolio.hu/en/cikkek.tdp?cCheck=1&k=1&i=7644
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