Cooperation with global pharmaceutical corporations should be intensified. It is important to attract investors, ensure the transfer of technology and the latest developments. It is necessary to expand the scope and range of off-take contracts with domestic manufacturers. The share of domestically produced medicines and medical products must be increased from the current 17 to 50% already in 2025.
K.K.Tokayev
The pharmaceutical industry is one of the key ones in the structure of the national economy and in the global market. The pharmaceutical industry is a significant part of the global healthcare system and occupies a special position in the global economy. Every year, the global pharmaceutical market shows positive dynamics with an increasing growth rate.
The Kazakh pharmaceutical industry, thanks to effective government support measures, has enormous potential to reduce import dependence. The domestic pharmaceutical market is one of the most dynamically developing in the Eurasian space. Today, there is increased interest in Kazakhstan from international investors who are looking for new opportunities in emerging markets.
To increase the sustainability, competitiveness of the industry and the development of the country's pharmaceutical industry, measures are being taken to attract foreign investment and the best foreign experience in production, transfer of technology and the latest developments to domestic production sites. The Head of State has noted this more than once.
We need to increase the pace of growth, more
actively diversify the economy, and attract
more foreign investment.
K.K.Tokayev
Attracting investment in the medical and pharmaceutical industry of Kazakhstan is one of the priorities in the activities of The Unified distributor. Over the past few years, comprehensive work and interaction has been carried out with a number of domestic and foreign companies, including global players BigPharma. Over the years, a tremendous amount of work has been done and there are already significant results in this direction.
In this article we will talk in detail about all the results achieved in attracting investments in the pharmaceutical and medical industry of Kazakhstan and the prospects for further development.
ATTRACTING of BIGPHARMA
Long-term agreements with pharmaceutical giants
Long-term agreement with PFIZER
In November 2023, the historic signing of a long-term agreement took place between The Unified distributor “SK-Pharmaceuticals” and the international biopharmaceutical company Pfizer. The regional President of the company in the Middle East, Russia and Africa (MERA) region, Patrick van der Loo, arrived in Kazakhstan to sign the document.
As part of the agreement, the American pharmaceutical giant Pfizer intends to supply a 20-valent pneumococcal conjugate vaccine to Kazakhstan, from the moment of organizing contract production of the innovative vaccine in the Republic of Kazakhstan.
Thus, according to the concluded agreement, Pfizer plans to organize contract production of a new pneumococcal vaccine in the country over the next three years, and then will supply a localized vaccine over the next 10 years.
Kazakhstan became the first country in the Eurasian region and Central Asian countries where this vaccine passed the state registration procedure. The Republic is also the first region in the world where Pfizer plans to establish contract production of this vaccine.
The following work was done before concluding a long-term contract:
Long term agreement with ROCHE 
The same historical long-term agreement was concluded in November 2023 between The Unified distributor, Roche, Nobel Almaty Pharmaceutical Factory JSC (Nobel AFF) and the Kazakhstan Research Institute of Oncology and Radiology (KazRIOR) for the supply of original patented medicines.
The signing of a long-term agreement opens the door to the local production of three biotechnological drugs developed by Roche, which are intended for the treatment of oncological diseases, namely breast cancer.
As part of the document, Roche committed to ensure the transfer of advanced technologies and know-how for local production on the basis of contract manufacturing and the subsequent supply of original patented medicines from the local partner on the basis of a long-term agreement.
Cancer is the leading cause of death in Kazakhstan. On average, up to 5 thousand patients with breast cancer are diagnosed annually in Kazakhstan, and up to 1,200 women die. This situation has been stable since 2004.
This important step will help reduce the cost and increase the availability of high-quality medicines for all patients with breast cancer in Kazakhstan. It also opens up new perspectives for patients and cancer professionals in Kazakhstan, encouraging discovery and innovation in medicine.
The following work was done before concluding a long-term contract:
In addition to localizing production, the company intends to continue cooperation and conduct a number of joint projects in the country. For example, an innovative training center for laboratory diagnostics will soon open at the School of Medicine of Nazarbayev University. The program at the training center is aimed at comprehensive advanced training and training of specialists from all over Kazakhstan.
Thus, the pharmaceutical giant Roche provides assistance in the implementation of new diagnostic methods for research projects. This helps strengthen Kazakhstan's laboratory infrastructure and ensure its compliance with international standards.
The Unified distributor takes an active position in the development of cooperation in the field of pharmaceuticals between Kazakhstan and Switzerland, initiating a number of bilateral meetings to consider ways of partnership. And the conclusion of a long-term agreement was the result of all previous agreements and close interaction with one of the leading pharmaceutical companies.
Development of contract manufacturing
Partnership with ASTRAZENECA 
In February 2023, a memorandum of understanding was signed between the Ministry of Health of the Republic of Kazakhstan and the Representative Office of the closed JSC AstraZeneca UK Limited.
As part of the document, AstraZeneca intends to support programs to improve the detection and management of diabetes mellitus, and to assist in further improving the treatment of respiratory and orphan (rare) diseases. In addition, the possibility of localizing the production of medicines in the country is being considered.
This document is also aimed at increasing the life expectancy of citizens to 75 years by 2025, introducing a model of proactive prevention of non-communicable diseases and expanding disease management programs as part of the implementation of the State Health Development Program of the Republic of Kazakhstan for 2020-2025.
AstraZeneca develops therapeutic solutions in areas such as diabetes, cardiovascular, respiratory, autoimmune, orphan diseases and oncology, promoting awareness among healthcare professionals in their respective therapeutic areas.
As part of the signed memorandum on localization, AstraZeneca UK Limited requests assistance in forming forecasts for 5 years in order to create the required production volume.
The following work was done before concluding the memorandum:
Currently, work is underway to develop a long-term agreement between The Unified distributor and AstraZeneca. Submission of an application for the conclusion of the document is planned in the 2nd-3rd quarter of 2024.
Partnership with NOVO NORDISK 
In June 2022, the Ministry of Health of the Republic of Kazakhstan and Novo Nordisk Kazakhstan LLP signed a memorandum on promoting health and improving the treatment of socially significant diseases in Kazakhstan.
As part of the document, the parties intend to provide earlier access to innovative treatment methods that can significantly reduce the risks of severe complications, and thereby improve the quality and length of life, while reducing healthcare costs.
Thanks to this, Kazakhstanis will have access to innovative drugs. It is also expected that the project will help improve the scientific and human resources potential of the pharmaceutical and medical industry in Kazakhstan.
Novo Nordisk is interested in assessing the opportunities of the Kazakhstan market and exploring potential partnerships in supporting local manufacturers by supplying the market with active pharmaceutical ingredients for the production of human insulin by Kazakh pharmaceutical enterprises.
The following work was done before concluding the memorandum:
The effects of the concluded agreement will be to improve the provision of quality medical care and expand coverage of the population with professional medical personnel, through the implementation of projects on continuing medical education in the field of diabetes and obesity, as well as the launch and implementation of projects to collect and analyze data from real clinical practice, contributing to the improvement of quality indicators of treatment of socially - significant non-communicable diseases.
Partnership with BAYER 
At the site of the III International Pharmaceutical Forum "Global Pharm", the Ministry of Health of the Republic of Kazakhstan and Bayer KAZ LLP entered into a memorandum of cooperation and mutual understanding. The joint strategic partnership is aimed at developing the clinical research market and transferring advanced technologies. The parties reached an agreement to attract international randomized clinical trials of unique innovative drugs to Kazakhstan that change the paradigm of disease treatment.
Also, joint work is envisaged on market access for innovative products for the treatment of prostate cancer to provide patients with innovative methods of therapy and improve the competencies of healthcare professionals in Kazakhstan through the implementation of scientific and educational programs.
Bayer is a global leader in developing and promoting innovative medicines that benefit patients in such терапевтических областях, как кардиология, онкология, женское здоровье, диабет и офтальмология.
Bayer clinical trial. According to the order of the Ministry of Health of the Republic of Kazakhstan (CMPC) “On issuing permission to conduct a clinical trial and (or) testing of pharmacological and medicinal products, medical devices” No. 115-НК dated March 29, 2023, the sponsor “BayerConsumerCareAG” was issued permission to conduct a clinical trial “A double-blind, randomized, placebo-controlled, multicenter study to evaluate the safety and effectiveness of elinzanetant in the treatment of vasomotor symptoms induced by adjuvant therapy over 52 weeks in women with or at high risk of developing hormone-dependent breast cancer”.
According to preliminary information from Bayer, 16 countries are participating in the clinical trial.
In addition, Bayer intends to invite the Government of Kazakhstan to consider and discuss the recommendations of a study by the international consulting agency E&Y on the protection of intellectual property in the pharmaceutical industry of Kazakhstan and the EAEU countries. The study analyzed the world's best practices for IP protection in pharmaceuticals, and also made significant recommendations for further improvement of Kazakhstani legislation.
Partnership with JOHNSON&JOHNSON 
At the III International Pharmaceutical Forum “Global Pharm”, a memorandum of cooperation and understanding was concluded between the Ministry of Health of the Republic of Kazakhstan and Johnson&Johnson LLC. The parties reached an agreement on the joint development of drug production capabilities in Kazakhstan and clinical trials.
The company intends to assist in the development of proposals for the introduction of modern diagnostics and treatment of socially significant diseases, to improve patient access to innovative therapy, protection of intellectual property rights, as well as the development of effective cooperation in the field of pharmacovigilance.
Bilateral cooperation also involves assessing the possibilities of public-private partnerships, localization of production or its stages on the territory of Kazakhstan. In addition, the joint engagement includes changes in regulations to implement value-based, personalized healthcare.
The following work was done before concluding the memorandum:
Johnson & Johnson is one of the world's largest diversified health care corporations. The company produces medical products and equipment, as well as medicines.
The signing of the above memorandums will contribute to the development of the pharmaceutical industry of Kazakhstan, including increasing the availability of innovative medicines for the population, encouraging manufacturers to expand contract production of medicines at production facilities located in the country.
Projects in development
Continuing work on the development of contract manufacturing, The Unified distributor continues to work to attract global players to the market. Negotiations are currently underway at various stages to sign cooperation agreements and readiness for localization with the following pharmaceutical companies:
At the same time, visits to a number of production sites of the world's leading pharmaceutical companies are planned for 2024.
COOPERATION WITH ASIAN COUNTRIES
Partnership with South Korean companies
In August 2021, during a state visit to Korea, the President laid the foundation for expanding the strategic partnership between South Korea and Kazakhstan.
In June 2022, representatives of The Unified distributor visited South Korea on a working visit to participate in a round table on cooperation in the creation and development of medical and pharmaceutical clusters between Kazakhstan and South Korea.
The working visit was organized by The Unified distributor on behalf of the Deputy of Prime Minister of the Republic of Kazakhstan Roman Sklyar and the Minister of Health of the Republic of Kazakhstan Azhar Giniyat, with the assistance of the Korean Health Industry Development Institute (KHIDI) and the Embassy of the Republic of Kazakhstan in Korea.
As a result of the round table, 5 memorandums were signed on the location of production sites in Kazakhstan - unique, latest, joint developments in the field of pharmaceuticals and medical equipment between:
As part of cooperation with DRTECH Corporation, an OEM agreement was concluded to localize the production of a new model of the compact X-ray diagnostic complex RDK ARDIAGNOST-7, and a modern digital mammograph with tomosynthesis function.
As for the new model of the compact X-ray diagnostic complex, the first prototype of medical equipment was manufactured, a set of factory qualification tests was carried out, and laboratory tests of the complex were also carried out in an external accredited testing laboratory.
Speaking about the modern digital mammograph, work is underway on technical preparation for the production of the ARMammo 3D mammograph with tomosynthesis function, and the preparation of a package of operational and technological documentation for the new product has begun. A mobile version is being developed, and a package of design documentation for the van body is being developed.
Cooperation with MEDICAL PARTNERS KOREA LTD involves contract production and sale of laboratory reagents for PCR tests in the country.
Regarding the partnership with GENORAY, it is planned to produce such medical products as the S-Arch and the mammography system, and with Samsung Medison - the production of ultrasound diagnostic systems in Kazakhstan. And with JW Holdings Corporation, production of final products of individual medical devices for neonatology will be launched in the territory of the Republic of Kazakhstan.
KHIDI was a “window to Korea” and a partner in attracting investors, ensuring the transfer of technologies and the latest developments to Kazakhstan. The Unified distributor has been working closely with KHIDI since September 2021 and has already held a number of negotiations with Korean companies and continues to work in this direction to this day.
As a result of the working trip, there was:
Continuing cooperation with South Korea, in March 2023, a meeting was held between the Kazakh and South Korean sides on the development of medical and pharmaceutical clusters in Kazakhstan, the creation of which was initiated by The Unified distributor. During the meeting, a memorandum on the creation of a medical and pharmaceutical cluster in the city of Shymkent was officially signed.
Cooperation involves joint interaction between the university and research and production sectors of the cluster for the development of the educational component, the generation of popular scientific ideas and practical results, specialized competencies in the field of innovation management, as well as the opening of R&D departments of large foreign companies working in the field of medical and pharmaceutical technologies.
The development of cooperation through the exchange of experience in creating medical and pharmaceutical clusters opens up broad prospects for both the healthcare system and business.
The South Korean pharmaceutical market is one of the most dynamically developing in the world. Korea has followed the path of innovative development in the field of promising areas of science, localizing the production of biosimilars, attracting public and private capital, and mobilizing the best international specialists to the country.
Combining the efforts of Korean and Kazakh companies around the creation of clusters in different regions of the country and investing in their development from both the state and private capital will ensure an increase in the production of import-substituting products and attract pharmaceutical giants to the construction of pharmaceutical plants in Kazakhstan.
Korea is one of Kazakhstan’s strategic partners in East Asia. “The Land of Morning Freshness” is already ranked second among our trading partners in Asia. In addition, Korea is among the top 10 largest investors in our country.
Cooperation with Chinese companies
The Unified distributor takes an active position in the development of cooperation in the field of pharmaceuticals between Kazakhstan and China, initiating a number of bilateral meetings to consider ways of partnership.
The result of all previous agreements and the result of close interaction with the Chinese side was a working visit of the Kazakh delegation to China, consisting of representatives of The Unified distributor and the business community in August 2023.
During the trip, the possibilities of promoting the domestic pharmaceutical industry in the direction of technology transfer and increasing investment attractiveness were considered, and the issue of a reciprocal visit of the Chinese side to Kazakhstan was also worked out.
The following enterprises were visited during the trip:
In addition, a round table “Attracting investments and localizing innovative pharmaceutical products and medical equipment in the Republic of Kazakhstan” was held with the participation of more than 30 industry associations and large Chinese manufacturers of medicines and medical equipment.
In September 2023, a return visit of the Chinese delegation to Kazakhstan took place. As a result, a round table “Strengthening coordination and business cooperation in the field of pharmaceuticals between the Republic of Kazakhstan and the People’s Republic of China” was held with the participation of representatives of the Ministry of Health of the Republic of Kazakhstan, subordinate organizations and domestic producers.
In addition, a visit to domestic production sites in Almaty and in medical and pharmaceutical cluster in Astana based on the Nazarbayev University School of Medicine and UMC clinical centers, was organized for the Chinese side, consisting of the Vice President of the Chinese Chamber of Commerce for the Import and Export of Medicines and Medical Products - CCCMHPIE and 18 large Chinese companies.
The driver of the counter visit of the Chinese delegation to Kazakhstan was the conclusion of a Memorandum of Cooperation and Understanding between the Association “PharmMedIndustry of Kazakhstan” and the Chinese Chamber of Commerce for the Import and Export of Medicines and Health Products (CCCMHPIE).
The parties agreed on long-term cooperation in the field of healthcare and pharmaceuticals through the exchange of information and development of technologies, as well as joint organization of relevant events, exchange of visits and much more.
The culmination of the event was a discussion between participants and B2B negotiations between business representatives from both countries, during which participants discussed the possibility of implementing specific business cases.
Close cooperation with our southeastern neighbors will definitely give impetus to attracting foreign investment, introducing best practices in the development of the pharmaceutical industry and transferring innovative technologies from the Middle Kingdom to Kazakhstan.
China is the most important economic partner of Kazakhstan and the potential of these relationships allows us to implement joint projects of a breakthrough level. In this regard, we are faced with the task of not only expanding trade turnover between countries, but also developing joint ventures, in particular the implementation of projects in the pharmaceutical and medical industries.
ATTRACTION OF VENDORS
It is necessary to radically revise the procurement system for medical equipment - this is also a big problem. Because this area is highly corruptible. Regions systematically inflate estimates and prices for equipment. Huge amounts of money are spent on its maintenance. Therefore, I instruct the Government to switch to centralized procurement of medical equipment on the basis of SK-Pharmaceuticals LLP.
K.K.Tokayev
It is known that, in accordance with the instructions of the Head of State, the vector was set for the transition to a centralized purchase of medical equipment based on The Unified distributor “SK-Pharmaceuticals”.
Centralized procurement is carried out in two stages:
The Unified distributor is a procurement operator and provides an electronic platform that ensures transparency, eliminating paper-based procedures and the “human factor”.
In addition, active work is underway with global vendors on the localization and contract production of medical equipment in Kazakhstan using the mechanisms of long-term contracts, offtake contracts, leasing mechanisms and “life cycle” contracts.
Partnership with GE HEALTHCARE 
In September 2023, as part of the official visit of the Head of State to the United States, the Government of the Republic of Kazakhstan and the GE HealthCare company signed a framework agreement on the basic principles for the implementation of an investment project to organize a new production of high-tech diagnostic medical equipment GE HealthCare in Kazakhstan. Namely, the localization of the production of ultrasound and CT scans on the basis of Aktyubrentgen JSC.
The document also provides for the development of cooperation in the areas of service, training of medical workers in the use of GE HealthCare equipment and modernization of the digital infrastructure of the country’s healthcare system.
At the end of last year, the first GE HealthCare Academy Training Center in Kazakhstan for clinical training of doctors was opened in Astana on the basis of the Astana Medical University NJSC.
GE HealthCare takes an active part in organizing educational programs and trainings to ensure a high level of qualifications of personnel in the healthcare system of the Republic of Kazakhstan for the effective use of high-tech medical equipment.
The goal of the training center is to improve the qualifications of diagnostic doctors (ultrasound doctors) in Kazakhstan. It will help subject specialists and experts acquire skills in operating medical equipment, use modern clinical capabilities in daily practice and maintain a high level of medical staff skills throughout the life of the equipment.
GE Healthcare is one of the world's leading manufacturers of equipment and digital solutions for the healthcare sector, whose product line includes a wide range of types of medical equipment.
The training program at the GE HealthCare Academy training centers covers the most pressing issues in medical imaging. The courses are targeted at both young specialists and experienced doctors.
The following work was completed before the agreement was concluded:
As part of the agreements with GE HealthCare, such important areas as digitalization of images of diagnostic equipment and the creation of a national database to improve diagnostics using artificial intelligence will be developed.
It is expected that classes will be conducted by highly qualified university staff and GE HealthCare experts, as well as reinforcement of lecture materials with practical exercises on a modern ultrasound machine and the opportunity to connect to various webinars.
The main effects of such a project will be the improvement of doctors’ qualifications and skills in working on any model of equipment produced by GE HealthCare, which will ensure patient safety, proper quality of results and optimal time for conducting the study.
GE HealthCare innovations are opening up new opportunities for healthcare development around the world. The use of better technologies improves the quality of care for patients. By working together, we not only help keep people healthy for a better future, but also expand the capabilities of the healthcare system.
Partnership with PHILIPS. 
In October 2022, a memorandum of cooperation was concluded between the Ministry of Health of the Republic of Kazakhstan and Royal Philips in the field of improving the quality of medical care, increasing efficiency, and digital health services.
The parties reached an agreement to improve the quality of oncological and cardiological services, including the exchange of best practices in planning comprehensive care and routing patients based on modern methods of diagnosis, treatment planning, treatment and clinical monitoring of patients. Royal Philips intends to localize the production of ultrasound and CT scanners in Kazakhstan.
In addition, it is expected to implement activities to increase access and management of digital anonymized patient data and digital clinical images, review and improve the quality of digital health services in Kazakhstan.
The following work was done before concluding the memorandum::
Philips has deep expertise in the consumer and healthcare sectors and uses advanced technologies to provide comprehensive solutions. The company is a leader in medical imaging, patient monitoring and IT systems, as well as personal care solutions and home technology.
As part of cooperation on the localization of the production of medical equipment in the Republic of Kazakhstan by Philips and further development of cooperation, a visit of a delegation of the Ministry of Health of the Republic of Kazakhstan to the Netherlands is planned in 2024.
INTERACTION WITH EMBASSIES AND INVESTORS
The Unified distributor regularly conducts meetings and business trips with industry representatives, diplomatic missions and regulatory authorities of foreign countries. Thus, during the period of work, successful collaborations were established with the Embassies of the European Union countries, China, South Korea, France, the UAE, India, the Islamic Republic of Iran and others.
One of the results of work in this direction was the conclusion of a memorandum of understanding and cooperation between the BeNiLux Chamber of Commerce and The Unified distributor in June 2023.
Thus, an agreement was reached to discuss and implement joint initiatives on import substitution and increasing the share of domestically produced drugs in the domestic market to 50%, on localizing the production of patented drugs on the territory of the Republic of Kazakhstan, and localizing the production of advanced medical equipment.
As part of the document, the parties intend to exchange experience and information about the relevant markets of the Republic of Kazakhstan and BeNiLux countries, including industry analysis, market trends and changes in the legislation of the Republic of Kazakhstan; improve interaction between member companies of the Chamber and The Unified distributor by identifying potential partners and opportunities for cooperation.
In addition, cooperation in the field of research and innovation in the pharmaceutical industry and healthcare is envisaged between the Republic of Kazakhstan and the BeniLux countries. A working group is planned to be created.
The conclusion of the agreement took place at the first meeting of the Belgium-Kazakhstan Business Council in Kazakhstan, the creation of which was one of the instructions of the Head of State after his last state visit to the Kingdom of Belgium. The organizers of this important event were the Chamber of Commerce “BeNiLux” in the Republic of Kazakhstan and the Foreign Trade Chamber of Kazakhstan.
In addition, during the period 2022-2023, 20 meetings and webinars were held with the Embassies of various countries, and the same number of negotiations took place with foreign investors in 2023.
It is worth noting that for further development of the industry and cooperation with leading countries, a number of visits to factories of global players such as Takeda, Janssen, Bayer, Stada, Pfizer and Polpharma are planned for 2024.
DEVELOPMENT OF DOMESTIC PRODUCTION
Supporting domestic production is one of the main directions of The Unified distributor's activities. To date, the support provides preferences for domestic manufacturers:
In the period from 2009 to 2024, there is a systematic increase in the share of Kazakhstani drugs in the purchase of The Unified distributor. Most domestic drugs are purchased through long-term contracts with domestic manufacturers for 10 years.
Today, there are 94 long-term contracts concluded between The Unified distributor and 35 domestic manufacturers for the supply of 3948 types of medicines (613 medicines, 3335 medical devices), of which 44 long-term contracts are concluded for medicines and 50 long-term contracts are for medical devices.
As a result of the implementation of investment projects, there is a positive dynamics of purchases according to the List of The Unified distributor, which shows an annual increase in the share of purchases from domestic producers. For example, in 2012, 182 types of medicines were supplied, and in 2022 – already 848 types. In 2023, this figure is 759, and in 2024 – 702 items.
It is worth noting that the dynamics of purchases from domestic manufacturers over the past 10 years has increased 8.6 times. If in 2013 the amount of purchases from domestic manufacturers under long-term contracts amounted to 15.9 billion tenge, then in 2023 this figure is equal to 137.55 billion tenge.
The Unified distributor enters into a long-term agreement with domestic manufacturers of medicines, medical devices or contract manufacturing customers based on the protocol of the competition results and provided that there are no previously concluded long-term supply agreements for the declared names.
At the same time, the conclusion of a long-term agreement for the supply of original patented medicines with contract manufacturing customers is carried out on the basis of the presented contract manufacturing agreement with a manufacturer located on the territory of the Republic of Kazakhstan.
Thus, after signing the contract, the manufacturer receives a ten-year government order (offtake contract), while the manufacturer undertakes to set up production of medicines and medical devices in accordance with the requirements of good manufacturing practice (GMP) for medicines and the requirements of the international quality management system standard (ISO 13485) for medical devices.
GROUP PROCUREMENTS
To increase the availability of medicines for patients, Kazakhstan and Kyrgyzstan initiated joint procurement by increasing the volume of medicines and medical devices.
The initiative was formalized in the form of a memorandum of cooperation and understanding concluded between SK-Pharmaceuticals and the Kyrgyzpharmacy State Enterprise under the Ministry of Health of the Kyrgyz Republic. The signing of the document took place in October 2023 at the site of the III International Pharmaceutical Forum “Global Pharm”.
Joint procurement is a global practice that helps increase the availability of medicines. Its main goal is to ensure fair access to specific medical countermeasures and improve security of supply, as well as more balanced prices.
In addition, such a mechanism allows for priority supplies to countries in greatest need to be prepared for the emergence of a serious cross-border health threat. A striking example of this is the global pandemic.
The joint procurement procedure is successfully practiced around the world. For example, during the pandemic, the European Union carried out a number of procurements using joint procurement mechanisms, in which 25 European states participated. Thus, this has become the basis for confronting cross-border health challenges.
The Unified distributor is planning to conduct a pilot group purchase of medicines for the Kyrgyz Republic in 2024. Amendments to the regulatory legal acts are being considered to define SK-Pharmaceuticals as an operator of group intercountry procurement of medicines in 2024-2025.
The effects of group procurement will be:
COOPERATION WITH AIFC
In January 2024, to further develop contract manufacturing and attract investments from global players in Kazakhstan, The Unified distributor SK-Pharmaceuticals LLP and the Astana International Financial Center (AIFC) entered into a memorandum of understanding.
The purpose of the Memorandum is to provide a common framework for cooperation on issues of mutual interest. The document provides for joint work in coordinating practical activities to determine the directions and forms of interaction between the parties.
Cooperation with the AIFC opens up new opportunities for the development of the company, as it is a leading financial center in the region of Central Asia and Eastern Europe, which helps to increase the investment attractiveness of Kazakhstan by providing foreign investors with a reliable legal framework, an independent judicial system, developed financial infrastructure, innovation and expertise.
The activities of AIFC participants are regulated in accordance with the AIFC Acts, which are based on the principles, norms and precedents of the law of England and Wales, and the standards of the world's leading financial centers.
The AIFC offers foreign investors a predictable and familiar legal environment, as well as a comprehensive ecosystem of financial services necessary for comfortable business.
This agreement will lay the foundation for cooperation at the AIFC site as part of the development of investment projects aimed at developing the pharmaceutical industry and attracting foreign pharmaceutical companies. In addition, the signed memorandum will facilitate the establishment of contacts and exchange of experience.
The Astana International Financial Center (AIFC) is an independent jurisdiction with a favorable legal and regulatory environment and developed infrastructure for opening and running a business, attracting investment, creating jobs and developing the economy of Kazakhstan.
DEVELOPMENT OF THE CLUSTER INITIATIVE
For the successful implementation of the goals set by the Head of State, and based on the results of studying international experience, The Unified distributor initiated the creation of medical and pharmaceutical clusters in the country. The corresponding order of the Ministry of Health of the Republic of Kazakhstan on the creation of clusters in Astana, Aktobe and Shymkent has already entered into force and work is underway to develop and approve road maps.
Each cluster has its own specifics. The Shymkent cluster is aimed at the production of medicines, the Aktobe cluster zone is aimed at the production of medical equipment, and the capital cluster is focused on intellectual support of the pharmaceutical industry.
Cluster zones in the above cities were chosen due to the presence in these regions of large medical and technical universities, production sites and clinical bases that provide high-tech medical care to the population.
The cluster is being formed in order to increase the competitiveness of domestic production of the pharmaceutical and medical industries, as well as the introduction of innovative technologies through the expansion of cooperative interaction.
The task of medical and pharmaceutical clusters is to conduct scientific research aimed at creating import-substituting medicines, including by using the potential of long-term contracts.
The clusters provide for integration ties in the form of GxP implementation, new business models, personnel training, their continuous professional development, development of medicines, herbal medicines, medical devices, modernization and development of technologies, clinical research, technology transfer, including diagnostics, treatment, healing and restoration.
In this case, an important role is played by the creation of an invitro diagnostics training center on the basis of the Nazarbayev University School of Medicine, within the framework of the framework agreement signed by the Ministry of Health of the Republic of Kazakhstan with the Roche company, during a government visit to Switzerland.
Also, the South Korean medical industry cluster city of Wonju Technovalley (WMIT) will have a significant impact on the cluster. The cooperation involves joint interaction between the university and research and production sectors of the cluster to develop the educational component, as well as the opening of R&D departments of large foreign companies working in the field of medical and pharmaceutical technologies.
In addition, the first GE HealthCare Academy Training Center in Kazakhstan for clinical training of doctors was opened in the capital on the basis of the Astana Medical University NJSC.
The goal is to improve the qualifications of diagnosticians (ultrasound doctors) in Kazakhstan. It will help subject specialists and experts acquire skills in operating medical equipment, use modern clinical capabilities in daily practice and maintain a high level of medical staff skills throughout the life of the equipment. This will strengthen the industry's human resources potential.
The opening of the GE HealthCare Academy training center became real, including thanks to the close interaction of The Unified distributor with the leading American vendor GE HealthCare through a series of negotiations and meetings in online and offline formats.
A great incentive for the development of pharmaceutical clusters will be the attraction of domestic research institutes, scientific laboratories of large medical universities like R&D centers, as well as their deployment in free economic and industrial zones.
Before creating medical and pharmaceutical clusters in the country, The Unified distributor studied the Korean experience of creating medical and pharmaceutical clusters and during the visit to South Korea we were able to visit large clusters and get acquainted with their work. The success story of global bioclusters has also been studied. For example, clusters in San Diego, Singapore, Boston, Japan.
Currently, SK-Pharmaceuticals has already signed memorandums of cooperation with JSC NC Kazakh Invest, JSC Science Fund and the Institute of Economic Research. Also, work was carried out on a pilot labeling project, together with Kazakhtelecom JSC.
The plans include concluding a memorandum with the Baiterek holding and a number of leading medical universities in the country. The goal is to provide a platform for large medicinal brands to enter the country from packaging to the full production cycle.
CREATION OF A LOGISTICS FARMHUB
As part of the development of Kazakhstan as a trade and logistics hub, it is advisable to create a pharmaceutical logistics hub in Central Asia. This is necessary for the rapid and efficient distribution of drugs.
World practice shows that a number of global players in the pharmaceutical market have logistics hubs from where medicines are supplied. The creation of a pharmaceutical hub in Central Asia would significantly reduce the waiting time for supplies to the country and ensure that there is no queue to receive medicines.
As part of the execution of the order of the Head of State on the development of a trade and transport hub in Kazakhstan with the industrialization of product groups, a warehouse and transport logistics system, The Unified distributor, being the anchor client of the pharmaceutical hub, became part of this grandiose project.
The logistics system of The Unified distributor is built in such a way that volumes of medicines and medical products are distributed from 4 large hubs in the cities of Astana, Almaty, Aktobe and Shymkent to operational warehouses in the regions.
This made it possible to reduce the distances for transporting medicines by four times, increasing efficiency and timeliness. But, most importantly, in force majeure circumstances, any of the logistics companies can replace another, which minimizes the risks of supply disruptions. One of the goals of improving logistics is to increase the efficiency of logistics in terms of uninterrupted operation of each supply chain.
Taking into account the geographical features of the country and current international logistics flows, the construction/development of pharmaceutical hubs is advisable in the cities of Almaty and Astana.
Interception of commodity flows, consolidation with subsequent production of goods for supply to neighboring markets, development of a full cycle of services, including management of global supply chains and contracts, will consolidate Kazakhstan’s position as the undisputed economic leader in the region.
INVESTMENT GUIDE BOOK
To attract foreign investors to the pharmaceutical industry of Kazakhstan, a memorandum of cooperation was signed between The Unified distributor and Kazakh Invest. Within the framework of the document, the parties support initiatives on the implementation of investment projects.
The company’s priority is to attract investment and localize innovative pharmaceutical products and medical equipment within the framework of contract manufacturing in Kazakhstan.
In pursuance of the instructions of the President of the Republic of Kazakhstan and in implementation of the Comprehensive Plan for the Development of the Pharmaceutical Industry, The Unified distributor, together with Kazakh Invest, has prepared a guide for potential investors - INVESTMENT GUIDE BOOK.
The purpose of the guide is to provide a platform for large medicinal brands to enter the country, from packaging to the full production cycle, using the “one-stop-shop” principle.
Benefits of Investment Guide Book:
CONCLUSION
Kazakhstan is interested in attracting investments and advanced technologies necessary for the successful implementation of economic modernization. Key importance is attached to the development of the production of expensive innovative products, the promotion of the industry in the direction of technology transfer, its digitalization, as well as the development of a cluster initiative.
As part of activities carried out to support the development of domestic production of pharmaceutical and medical products, The Unified distributor takes the initiative to provide a platform for large brands to enter the country from packaging to the full production cycle.
In order to simplify the entry of global players into the domestic market, The Unified distributor has carried out work on improvement of regulatory acts, which today make it possible to localize in the country the production of medical equipment from global vendors, the production of original innovative medicines from Bigpharma, as well as to increase the pace of development and launch new production facilities in Kazakhstan.
An important priority in the activities of The Unified distributor is to attract investment in innovative pharmaceutical products within the framework of contract manufacturing in the territory of the Republic of Kazakhstan.
The use of contract manufacturers in the pharmaceutical industry has been growing for several decades in an effort to reduce costs, reduce internal capacity and expand into new markets.
Cooperation with leading foreign companies, including BigPharma, will bring to Kazakhstan not only new technologies, but a whole philosophy of health, which is an integrated approach to understanding and achieving health.
By attracting BigPharma to the domestic market by localizing production, as well as their offices, Kazakhstan is getting closer to creating a solid infrastructure of a pharmaceutical hub, which will serve as a platform for the distribution of medicines and medical products to countries near and far abroad.
We expect the main effects from the TOP-50 BigPharma project: modern re-equipment of the pharmaceutical industry of Kazakhstan, rapid growth of its capacity, high export potential of a new line of original products, as well as the development of pharmaceutical science in interaction with the production of original medicines and increasing the human resources potential of the pharmaceutical industry.
All efforts and results available today are an example of an integrated approach for the progressive development of domestic industry and its clustering thanks to government support measures.
The Unified distributor, in turn, is the conductor of these measures, ensuring long-term purchases of medicines since 2009, and now from contract manufacturing customers based on local sites.
By increasing the pace of work and expanding development opportunities, Kazakhstan has all the prerequisites to become a key player in the industry, produce innovative original drugs, increase population coverage and the export potential of domestic production. It is advisable to achieve such a goal through continuous comprehensive work and joint efforts.
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