Western know-how touted in effort to share expertise
The Kyiv-based Farmak pharmaceutical company launched Ukraine’s most sophisticated insulin production last month, thanks in large part to a cooperation pact with American pharmaceutical giant Eli Lilly.
The new production line, launched on Dec. 9, 2005, during an opening ceremony attended by U.S. Ambassador John Herbst, will produce insulin using genetic engineering technologies in accordance with a license from the American corporation.
It will be the only production line of insulin in Ukraine that can boast the standards of a widely regarded transnational company like Eli Lilly, said Farmak officials.
Farmak has invested nearly $9 million into the new production line, designed using know-how provided by Eli Lilly. The launch of the production line also makes for what Farmak officials call a higher level of relations with their American colleagues.
“The opening of the first full-scale production line marks a new stage of partnership relations development between the two companies,” Philya Zhebrovska, president and director of Farmak, said during the opening ceremony.
Zhebrovska said that by “cooperating with one of the world’s leading producers of the human recombinant insulin, Eli Lilly, Farmak has joined a narrow circle of genetically-engineered insulin producers.”
Farmak is one of the largest producers of pharmaceuticals in Ukraine.
Farmak’s manufacturing output comprises 11 percent of Ukraine’s overall medical products market. It initiated its cooperation with Eli Lilly on the planned production line back in 1999.
Originally, Farmak was buying ready-produced insulin flasks from Eli Lilly, later packing and re-selling them under its own trademark. In 2003, both companies inked an agreement yielding Farmak licensing rights to high quality Eli Lilly technology to establish its own insulin production.
A U.S. embassy spokesperson told the Post that “Eli Lilly is the first pharmaceutical company to make this kind of investment into the Ukrainian pharmaceutical industry. In essence, it has made an investment in the form of a technology know-how transfer to Farmak.”
Genetically engineered insulin makes up nearly 30 percent of Ukraine’s insulin market; a small share if one considers that worldwide such insulin accounts for up to 98 percent of sales.
Today, Ukraine’s insulin market is represented by two Ukrainian and two foreign companies. Ukrainian Indar boasts 80 percent market share, while Farmak holds around 18 percent.
Headquartered in Indianapolis, Indiana, Eli Lilly is a leader in medical research and the development of new medicines to help patients living with such diseases as cancer, diabetes, osteoporosis and others.
Large foreign pharmaceutical companies typically set up a business with its own representation office or legal entity in the country, use a Ukrainian agent company, or sign a licensing agreement with a Ukrainian partner, as is the case between Eli Lilly and Farmak.
“While not all international pharmaceutical companies own production plants in Ukraine, the vast majority of them work through representative offices because it is more advantageous and convenient for them,” Vitaliy Kiryk, managing director of Ratiopharm International GmbH’s representative office in Ukraine, told the Post.
In a recent press release, Herbst said that the production of high-tech recombinant human insulin by Farmak is part of a U.S.-Ukrainian agreement and that neither of the countries’ governments spent any money on the initiative. As part of its investment, Farmak has installed a bottling line to facilitate insulin production at international standards. Before actual production started, company employees were sent on internships abroad to learn about production, laboratory equipment was purchased, and an insulin storage system was set up.
