Economic Support Measures Available for Russian Pharmaceutical Manufacturers
Economic Support Measures Available for Russian Pharmaceutical Manufacturers
The import independence in medicine assistance guideline, as well as government and business networking, have accelerated the development of the pharma industry in Russia, allowing it to demonstrate significant annual growth. The economic support measures developed and implemented by The Ministry of Industry and Trade of the Russian Federation have played an important role in this process. Several such programmes have proved effective in 2023.
Industrial Development Fund's Soft Loans
One of the primary means of assistance for capital projects provided by The Industrial Development Fund. Its goal is to create, modernize, and further develop modern, advanced, and competitive industrial manufacturing. There are 12 soft loan programmes available, a number of which are both suitable for, and popular among pharmaceutical companies.
Special Investment Contracts
The mutually assured contracts allow the encouragement of investment in the industrial manufacturing in Russia. In accordance with the agreement, the investor is obligated to implement the project, while the government is obligated to ensure stability of conditions for business operations and to provide the business with support measures. There are currently two contract variants: Special Investment Contract 1.0 is intended for capital projects aimed at creating, modernizing, and further developing industrial products. Special Investment Contract 2.0 is a revised variant, intended for capital projects aimed at developing and implementing modern technology.
PharmMed Innovation Venture Fund
The PharmMed Innovation Venture Fund was founded in late 2019 as part of the Development of the Pharmaceutical and Medical Industry State Programme. Its goal is to finance projects aimed at developing new pharmaceuticals and providing the means of their delivery. The Fund was issued for 10 years with a possibility of a 2-year extension. The mechanisms of venture investments allow to neutralize certain risks for innovative projects.
Grants For Research Institutions
A new grant-making mechanism for research institutions was established in 2021 in order to support the institutions developing pharmaceuticals and medical devices. A mandatory requirement for the institutions is to attract industrial partners. The Ministry of Health of the Russian Federation determines the research directions to be financed, according to the country's needs.
Soft Loans Programme for Priority Import Purchases
A special soft loan programme intended to support purchases of imported goods of economic importance. The mechanism ensures that the importers receive soft loans at an annual rate not exceeding 30% of key interest rate of The Central Bank of Russia plus three percentage points. The variance is offset by the subsidies from the federal budget. The programme is valid until October 30th, 2023.
Customs Duty Removal
In March, 2022, a mechanism ensuring exemption from import customs duty for a number of imported goods of critical importance was implemented on the level of Eurasian Economic Union. The established list of goods includes pharmaceuticals, medical devices, and certain types of raw materials and components which cannot be promptly substituted.
Cluster Investment Platform
A new state support mechanism was established in 2023, The Cluster Investment Platform. Pharma industry companies are provided with preferential investment loans in order for the companies to develop full-cycle production and to manufacture pharmaceutical substances. The companies are able to acquire a loan at an annual rate of 30% of key interest rate of The Central Bank plus three percentage points. The loan period is the project's investment phase plus two years.