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Moscow-based companies searched

The Moscow offices of Akrikhin, Novartis, Teva Pharmaceuticals and Valenta have been searched by Russian police as part of an investigation into distributors

Russian police have searched the Moscow offices of Novartis and Teva Pharmaceuticals and local companies Akrikhin and Valenta, as part of an investigation into distributors selling drugs to the state.

The website of Russian newspaper Vedomosti quoted a police source as saying the searches were carried out as part of an investigation into an alleged carve-up of the market for supplying the state healthcare system with essential drugs by major distributors.

The government runs a system of subsidised purchases of drugs for low-income citizens. An investigation into the system showed that the bulk of state supply contracts, worth more than $2bn, went to six distribution firms in 2006-08.

A spokesperson for Swiss firm Novartis declined to comment on any ongoing investigation. Meanwhile a spokesman for Teva Pharmaceuticals said: "Teva can confirm its office in Moscow was visited by representatives of Russian police on July 5. Their visit was connected to their investigation related to third parties, specifically independent distributors with whom Teva might have signed contracts, and not about any criminal accusations against Teva. The company is cooperating with law-enforcing authorities within the frame of their cases."

A spokesperson for Akrikhin also confirmed that the search took place. "The matter in question does not presuppose any illegal activities by Akrikhin and is not about violations of law by Akrikhin," she said. Valenta was not available for comment.

Novartis plans to invest $500m in Russia in the next five years and is to build a new plant in St. Petersburg to strengthen its position in the market. Meanwhile Teva plans to invest up to $100m in a drug production plant in Russia as it aims to more than triple Russian sales by 2015.

Russian Prime Minister Vladimir Putin has warned international pharmaceutical companies and medical equipment makers that they will face restrictions in the country if they fail to develop local production and transfer technology.

International pharmaceutical firms currently control about 80 per cent of the Russian drugs market and Putin said it was threatening Russia's national security.

6th July 2011

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