Russian Drug Sector Hit By Shares Buyout

Russian banks and some foreign drug companies are reportedly engaged ina large-scale buy-out of shares in a drug industry described in media reports as dying on its feet.

A report in Izvestia suggests that only five or six of Russia's former 120 drugmakers are able to operate efficiently under free-market conditions, led by the Biopreparat group which incorporates 35 domestic production and research institutes. This group is at the heart of what seems to be the only stable element in the Russian industry and was a founding member of Rosmedprom, the Russian medical industry association, which aims to integrate the efforts of domestic producers.

Organizations buying up shares in drug plants act, says one Izvestia report, "like mere speculators," with controlling blocks of shares resold at a profit. One casualty is Kurskleksredstva of Kurst, whose shares were bought up by Alfabank. A new buyup involving Biosintez, based in Penza, is reportedly underway by two brokerage firms based in Cyprus. Rosmed-prom is said to be monitoring the situation, with the aim of becoming involved if activity becomes too intensive to ignore.