Increasing Production and Accelerating Technology Transfer in the Pharmaceutical Industry Discussed
Uzbekistan
On March 5, President Shavkat Mirziyoyev chaired a videoconference on expanding production and accelerating the implementation of advanced technologies in the pharmaceutical industry.
The head of state noted that the pharmaceutical industry is strategically important, as it directly impacts public health, quality of life, and the country's economic security.
It was noted that significant opportunities for the sector's development have been created in recent years. Specifically, over the past nine years, $1.8 billion has been invested in the industry, and 140 new production facilities have been launched. Today, more than 300 pharmaceutical companies operate in the country, 58 of which are directly involved in drug production.
As a result, pharmaceutical production increased 3.5-fold, exceeding 7 trillion 300 billion soums. Domestic drug production has doubled. Pharmaceutical products manufactured in Uzbekistan are exported to 55 countries. The number of jobs in the industry has exceeded 40,000.
Overall, the pharmaceutical and medical device market in our country has reached approximately $2.5 billion.
It was emphasized that this year, policymakers face the task of attracting at least $1 billion in investment into the pharmaceutical industry, increasing the share of domestically produced pharmaceuticals in the domestic market to 70 percent by 2030 through quality improvements and the launch of new facilities in partnership with foreign companies, and increasing export volumes to $1 billion over the next five years.
Five pharmaceutical industrial zones have been established in the republic, covering 136 hectares, and all the necessary infrastructure has been created. However, in some regions, these opportunities are being utilized ineffectively.
For example, the Jizzakh pharmaceutical zone, which occupies 25 hectares, did not produce a single batch of products last year. A 14-hectare site in the Bostanlyk pharmaceutical zone has remained unused since 2017. It was also noted that last year, not a single enterprise was launched in the Jizzakh and Samarkand pharmaceutical zones, while very few investment projects were implemented in the Bukhara and Khorezm pharmaceutical zones.
The meeting also considered proposals from pharmaceutical industry entrepreneurs. Specifically, the issue of applying tax breaks provided for pharmaceutical zones to enterprises located in regions where such zones do not exist was raised.
The President supported this proposal and announced a number of new opportunities for pharmaceutical manufacturers.
Specifically, starting April 1 of this year, new projects for the production of pharmaceuticals and the cultivation and processing of medicinal plants, regardless of location, will be exempt from land tax for three years. After the project begins, profit and property taxes will also be waived for three years.
Furthermore, the import of raw materials, equipment, and components for manufacturers of dietary supplements and cosmetics will be exempt from duties. Pharmaceutical companies will be allowed to produce dietary supplements on their own production lines.
A list of medicines and medical devices recommended for localization will now be published for entrepreneurs by July 1. Entrepreneurs will be provided with foreign currency loans at 7 percent interest for projects manufacturing products from this list.
Enterprises planning to further localize existing products will be provided with loans from the Industrial Cooperation Fund for up to 10 years at a rate of 6 percent in foreign currency and 12 percent in national currency.
The meeting also focused on attracting foreign pharmaceutical companies to our country and establishing technology transfers with them.
It was noted that almost half of imported medicines are produced by 34 foreign companies. Therefore, it is necessary to encourage their production in Uzbekistan. Large enterprises involved in importing medicines are also recommended to increase social responsibility and take the initiative to establish production of branded medicines in our country.
To stimulate this process, the royalty tax paid by enterprises for the use of foreign brands will be reduced from 20 to 5 percent.
Twenty to 25 years after the creation of an original drug, other pharmaceutical companies are granted the right to produce it. Developing such drugs allows for several-fold reductions in domestic market prices.
In this regard, companies that master the production of in-demand drugs within a year will receive half of their technology transfer costs from the Fund for Support and Development of the Pharmaceutical Industry.
Furthermore, to expand production of the 100 most frequently imported medications, the Tashkent Pharma Park pharmaceutical cluster will be expanded by another 100 hectares.
The meeting also addressed pharmaceutical exports. Although industry exports have reached $220 million, only $14 million of this amount is for pharmaceuticals.
In this regard, the importance of ensuring that enterprises operate in accordance with international standards was emphasized. Currently, all 58 pharmaceutical companies have national GMP certificates. It was noted that they now need to align their operations with European GMP standards.
Starting June 1, 50 percent of the costs of obtaining Euro GMP certification for local enterprises will be reimbursed by the Trade Facilitation Fund.
The meeting also discussed expanding the participation of domestic manufacturers in the public procurement system. It was noted that some enterprises are unable to supply products to government agencies because their localization level is below 30 percent.
In this regard, entrepreneurs with a domestic manufacturer's certificate, regardless of the level of localization, will be allowed to participate in public procurement until September 1.
As noted, more than 57,000 unregistered and counterfeit medicines were identified in our country last year.
In this regard, the importance of developing a bill to tighten penalties for the illegal trade in medicines and the circulation of products of dubious quality was emphasized.
The meeting also raised the issue of bridging the gap between science and local production.
Currently, more than 300 scientists work in six industry research institutes, and higher education institutions annually train nearly 1,000 specialists. However, the implementation of scientific research into practice is insufficient.
In this regard, a National Research Institute of Biopharmaceuticals will be established on the premises of the Institutes of Chemistry and Pharmaceutics, Vaccines and Serums, and Oriental Medicine. It will be located within the Tashkent Pharma Park cluster, which will allow for the direct integration of research and production. The park will house a preclinical research laboratory, biological and chemical research centers, and a 250-bed international clinical research center.
Furthermore, professors and teachers from the Tashkent Pharmaceutical Institute and the Pharmaceutical Technical University will conduct their research activities within the pharmaceutical park. Students will have the opportunity to study and work at these companies through dual education.
Companies will be reimbursed for up to $100,000 in expenses for projects to produce new drugs with the participation of external scientists. Companies establishing production of new drugs developed by domestic scientists will receive a subsidy of up to 100 million soums to cover their registration and clinical trial costs.
The meeting heard proposals and initiatives from pharmaceutical company representatives, reports from responsible officials, and issued relevant instructions to ensure the implementation of these tasks.
It was noted that significant opportunities for the sector's development have been created in recent years. Specifically, over the past nine years, $1.8 billion has been invested in the industry, and 140 new production facilities have been launched. Today, more than 300 pharmaceutical companies operate in the country, 58 of which are directly involved in drug production.
As a result, pharmaceutical production increased 3.5-fold, exceeding 7 trillion 300 billion soums. Domestic drug production has doubled. Pharmaceutical products manufactured in Uzbekistan are exported to 55 countries. The number of jobs in the industry has exceeded 40,000.
Overall, the pharmaceutical and medical device market in our country has reached approximately $2.5 billion.
It was emphasized that this year, policymakers face the task of attracting at least $1 billion in investment into the pharmaceutical industry, increasing the share of domestically produced pharmaceuticals in the domestic market to 70 percent by 2030 through quality improvements and the launch of new facilities in partnership with foreign companies, and increasing export volumes to $1 billion over the next five years.
Five pharmaceutical industrial zones have been established in the republic, covering 136 hectares, and all the necessary infrastructure has been created. However, in some regions, these opportunities are being utilized ineffectively.
For example, the Jizzakh pharmaceutical zone, which occupies 25 hectares, did not produce a single batch of products last year. A 14-hectare site in the Bostanlyk pharmaceutical zone has remained unused since 2017. It was also noted that last year, not a single enterprise was launched in the Jizzakh and Samarkand pharmaceutical zones, while very few investment projects were implemented in the Bukhara and Khorezm pharmaceutical zones.
The meeting also considered proposals from pharmaceutical industry entrepreneurs. Specifically, the issue of applying tax breaks provided for pharmaceutical zones to enterprises located in regions where such zones do not exist was raised.
The President supported this proposal and announced a number of new opportunities for pharmaceutical manufacturers.
Specifically, starting April 1 of this year, new projects for the production of pharmaceuticals and the cultivation and processing of medicinal plants, regardless of location, will be exempt from land tax for three years. After the project begins, profit and property taxes will also be waived for three years.
Furthermore, the import of raw materials, equipment, and components for manufacturers of dietary supplements and cosmetics will be exempt from duties. Pharmaceutical companies will be allowed to produce dietary supplements on their own production lines.
A list of medicines and medical devices recommended for localization will now be published for entrepreneurs by July 1. Entrepreneurs will be provided with foreign currency loans at 7 percent interest for projects manufacturing products from this list.
Enterprises planning to further localize existing products will be provided with loans from the Industrial Cooperation Fund for up to 10 years at a rate of 6 percent in foreign currency and 12 percent in national currency.
The meeting also focused on attracting foreign pharmaceutical companies to our country and establishing technology transfers with them.
It was noted that almost half of imported medicines are produced by 34 foreign companies. Therefore, it is necessary to encourage their production in Uzbekistan. Large enterprises involved in importing medicines are also recommended to increase social responsibility and take the initiative to establish production of branded medicines in our country.
To stimulate this process, the royalty tax paid by enterprises for the use of foreign brands will be reduced from 20 to 5 percent.
Twenty to 25 years after the creation of an original drug, other pharmaceutical companies are granted the right to produce it. Developing such drugs allows for several-fold reductions in domestic market prices.
In this regard, companies that master the production of in-demand drugs within a year will receive half of their technology transfer costs from the Fund for Support and Development of the Pharmaceutical Industry.
Furthermore, to expand production of the 100 most frequently imported medications, the Tashkent Pharma Park pharmaceutical cluster will be expanded by another 100 hectares.
The meeting also addressed pharmaceutical exports. Although industry exports have reached $220 million, only $14 million of this amount is for pharmaceuticals.
In this regard, the importance of ensuring that enterprises operate in accordance with international standards was emphasized. Currently, all 58 pharmaceutical companies have national GMP certificates. It was noted that they now need to align their operations with European GMP standards.
Starting June 1, 50 percent of the costs of obtaining Euro GMP certification for local enterprises will be reimbursed by the Trade Facilitation Fund.
The meeting also discussed expanding the participation of domestic manufacturers in the public procurement system. It was noted that some enterprises are unable to supply products to government agencies because their localization level is below 30 percent.
In this regard, entrepreneurs with a domestic manufacturer's certificate, regardless of the level of localization, will be allowed to participate in public procurement until September 1.
As noted, more than 57,000 unregistered and counterfeit medicines were identified in our country last year.
In this regard, the importance of developing a bill to tighten penalties for the illegal trade in medicines and the circulation of products of dubious quality was emphasized.
The meeting also raised the issue of bridging the gap between science and local production.
Currently, more than 300 scientists work in six industry research institutes, and higher education institutions annually train nearly 1,000 specialists. However, the implementation of scientific research into practice is insufficient.
In this regard, a National Research Institute of Biopharmaceuticals will be established on the premises of the Institutes of Chemistry and Pharmaceutics, Vaccines and Serums, and Oriental Medicine. It will be located within the Tashkent Pharma Park cluster, which will allow for the direct integration of research and production. The park will house a preclinical research laboratory, biological and chemical research centers, and a 250-bed international clinical research center.
Furthermore, professors and teachers from the Tashkent Pharmaceutical Institute and the Pharmaceutical Technical University will conduct their research activities within the pharmaceutical park. Students will have the opportunity to study and work at these companies through dual education.
Companies will be reimbursed for up to $100,000 in expenses for projects to produce new drugs with the participation of external scientists. Companies establishing production of new drugs developed by domestic scientists will receive a subsidy of up to 100 million soums to cover their registration and clinical trial costs.
The meeting heard proposals and initiatives from pharmaceutical company representatives, reports from responsible officials, and issued relevant instructions to ensure the implementation of these tasks.
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