The project for localizing the production of city-demanded medicines


The project for localizing the production of city-demanded medicines based on a long-term contract with the Moscow Government providing investment counter obligations of the supplier (an offset contract)

 

Project summary:

The project is aimed at localizing the demanded medicines production within the city to supply the Moscow public sector facilities (oncology, immunomodulators).

The investment project is implemented under an offset contract, i. e. a long-term government contract that guarantees the city's long-term demand, on the one part, and obliges an investing supplier to invest in the modern medicines production plant, the products of which will be supplied under the concluded contract, on the other part.

The investing supplier is BIOCAD, which is one of the leading Russian pharmaceutical companies operating at the international level and performing full cycle medicine production, from the molecule search to mass production and marketing support. The medicines produced are intended to treat most complex diseases, such as cancer, HIV, hepatitis, multiple sclerosis, etc.

The company employs over 1,400 people, more than 650 of which are scientists and researchers. The company's branches and representative offices are located in different countries (USA, Brazil, China, India, etc.).

Financing (million rubles):

The total investment amount under the BIOCAD project is at least 3 billion rubles.

Federal legislation (44-FZ) requires an investing supplier to invest at least 1 billion rubles under an offset contract.

Implementation terms:

Contract validity period is up to 10 years

Construction to be completed in 3 years (2017-2020)

- Until 2020: packaging localization and quality control for 22 INN

- Until 2021: finished dosage form 2 localization for 22 INN, substance production for at least 2 INN

Medicines supply under the contract for 7 years (2020-2027)

Financing source:

The plant construction is financed with extra-budgetary investments (the investing supplier's funds).

The city provides tax and non-tax benefits as part of current support measures (including those for the SEZ residents).

Results:

- creating a modern pharmaceutical production plant in Moscow to cover the long-term demand of the city and other regions of Russia for high-quality internally produced medicines;

- attracting investments in fixed assets, creating high-performance jobs and developing competencies in the pharmaceutical sector;

- providing the guaranteed demand for the investor's products from the Moscow Government, as well as the possibility of inclusion into the Register of Sole Suppliers.

Current status:

In October 2017, a pilot tender was held, according to Moscow Government order No. 149-RP "On holding a tender to conclude a government contract for medicines supply, with the counter investment obligations of an investing supplier required to create or upgrade and (or) develop medicines production in Moscow" dated 11.04.2017.

Based on the tender results, the maximum initial contract price (MICC) was reduced by more than 50%. The сontract price made14 billion rubles. The supply period will be 7 years.

The first offset contract for medicines supply concluded with ZAO BIOCAD provides for localizing in Moscow the production of 22 drugs (international non-proprietary names (INN)), with at least 3 billion rubles to be invested.

The production site is expected to be located in the Technopolis Moscow SEZ (Alabushevo, Zelenograd).

In December 2017, the investor signed a land lease agreement and was granted the SEZ resident status.

At present, the company is preparing pre-project and project documentation. The construction of a plant in the Technopolis Moscow SEZ under the first offset contract concluded with ZAO BIOCAD is planned to be started as early as 2018.