- After the criticism of President Nursultan Nazarbayev, the leadership completely changed. And according, the policy of LLP. Tell me, what innovations did you bring to the work of the company? What did you have to struggle with?

- After criticizing the Head of State for the work of a single distributor, it was obvious that all the company's processes require a systematic review.

It should be noted that when a single distributor was created in 2009, it was a breakthrough project. At that time, his appearance on the country's pharmaceutical market solved a number of issues at once: the continuity of the drug supply, the uniform prices of medicines for the whole country, and the support of domestic production, as a result of which the pharmaceutical industry became one of the most actively developing sectors of domestic production. But time passes, and we must move forward. Certainly, criticism from the Head of State has become a push to go beyond the routine processes, to review the whole work of a single distributor, to look attentively at a successful foreign experience, to look for ways to develop and move forward. Given the realities of the current economic globalization, taking into account the main indicators of state program documents and the challenges facing a single distributor, there is a need to transform the basic elements of the functioning of a single distributor.

Of course, the fastest, and, at the same time, weighted decisions required the field of our activities that were criticized. In the first place, the entire leadership of the organization was replaced. Moreover, we reviewed the organizational structure of the organization, and proposed the optimal structure for the current time to our only participant, the Ministry of Health. Rotation in the staff has been made. Already in April the company began to work in a new format.

We conducted an analysis of business processes, identified the weakest points in the procurement procedures. Developed the concept of transformation of the organization. An expert council was created to improve the unified distribution system, which included representatives of state bodies, the Atameken and associations, attracted scientists, experts, veterans of public health and pharmacy to public discussion.

To date, a number of measures have been developed that should improve the system of a single purchase and distribution of medicines.

So, since 2018 a single distributor will switch to electronic format of procurement. Advantages of this format of procurement are obvious. This is an increase in the transparency and openness of the procurement process, and simplification of procedures and reduction of administrative barriers, and reduced corruption of procurement due to lack of personal contact with bidders. Potential suppliers will no longer need to notarize each document - an electronic digital signature will guarantee it, and the entire package of documents will be reduced through the integration of the e-procurement portal with all state information systems. Most importantly, the transition to an electronic format for the purchase of medicines and medicines will allow for the full monitoring of all procurement processes and procedures in real time.

We suggested that the Ministry of Health implement a system of prequalification of potential suppliers, as is the practice of WHO and UNICEF, and which is already being implemented in Kazakhstan on the basis of SWNF Samruk-Kazyna. And if the advantage of procurement in the system of preliminary qualification is the reduction of time for consideration of tenders, and, if necessary, the possibility of carrying out "fast auctions", which will give high flexibility and efficiency to purchases, then for medical organizations and patients the introduction of prequalification will serve as protection from substandard medicines and unscrupulous behavior of suppliers.

A lot of work is to optimize our logistics system. We plan to create a logistics network that will not only maximize the transportation of drugs, and, accordingly, their cost price, but also in real time to track the movement of goods and the conditions for their storage and delivery. The system-forming logistics hubs located in key regions will ensure the stability of the entire network, ensuring the stability of the supply of drugs, the proper storage of the irreducible stock of vital drugs, and therefore national drug safety.

There is another important change that will occur in our work from next year. If earlier we bought medicines only for hospitals, now on the shoulders of a single distributor lies out and outpatient drug provision. We plan to build the system in such a way that it is possible to monitor the path of medical products from the warehouse to the patient in a serial manner.

- There are cases when drugs are not delivered to hospitals in time. What is the reason, and who is to blame? Will this problem find its solution?

- Unfortunately, there is no universal solution to ensure the continuity of drug provision. It is impossible to foresee everything, and many factors can play a role here. Practically at every stage of this path between the manufacturer and the patient there may be some pitfalls.

There were times when the manufacturing plant stopped, or there were interruptions with the substance, and the manufacturer could not supply us with all the promised amount of medicines. In this case, we negotiate and buy the medicine or its analogue from those who can supply them. The question is solved, precious time is wasted.

Certification procedures may be delayed when importing drugs, then the supplier can not deliver the products on time.

There are also cases when a single distributor can not buy drugs on time. For example, when the price at which a tender is announced is too low, and it is simply not profitable for suppliers to sell us goods for that money, and they do not apply for participation, no matter how many times we announce a purchase. In this case, the Ministry of Health revises prices, and procurement is still made, but all these procedures require a long time. The electronic format of procurement and the preliminary qualification of suppliers will partly be a solution in this case.

Or it may be that the hospital or the health department incorrectly predicted their need for medicines, and ordered too little. And in this case time is spent for additional purchase and delivery of drugs.

What will help us solve these problems? The only solution is an ideally tuned system. But this does not happen. There is also a force majeure, and a human factor. But we have several tools for tactical resolution of issues: proper planning, advance tenders, negotiation in case of emergency situations and a non-stopable supply of vital medicines. We use each of these tools in accordance with the situation.

- This year there was a scandal involving pharmaceutical companies. The court brought to responsibility for collusion three companies that agreed to support one of them in the purchases of SK-Pharmaceuticals for the logistics service, and then the volume of the order to be distributed to all. How did this happen? And how are they going to avoid such incidents in the future?

- At the time of creation of SK- Pharmaceuticals in 2009, the company faced the main task - to debug the system of purchasing and supplying medicines to hospitals, providing the population with free medicines without interruption. On the map were deliveries of medicines to patients throughout the country, and they could not be put at risk by a single distributor. It was simply impossible to work separately with companies that provide logistics pharmaceutical services in each region, because a single distributor needed to centrally control all logistics processes. In addition, companies with proper warehouses and transportation for the storage and transportation of drugs were at that time far from every region.

And there is still no single supplier with such warehouses in all regions. Therefore, companies that participated in the procurement of transportation services for medicines and medical products to show that they could cover the whole country, represented the so-called "agreements on the intentions of cooperation". Generally speaking, such contracts of intent were more needed to guarantee to a single distributor that the supplier would be able to provide such a service, having for this all the necessary conditions and opportunities. By and large, such agreements on the intention to cooperate with other organizations for the provision of storage and transportation of medicines and medical products for a single distributor could be concluded by any potential supplier. Purchase of logistics services was carried out on a competitive basis in accordance with the law.

But the Committee for Regulation of Natural Monopolies and Protection of Competition of the Ministry of National Economy of the Republic of Kazakhstan found anti-competitive agreements of market entities prohibited by the Business Code of the Republic of Kazakhstan and signs of a cartel agreement.

Of course, we took into account all the comments. This question, like all the questions touched upon you, requires a comprehensive solution. Therefore, the issues of the formation of an independent logistics network are given special attention in the concept of the transformation of a single distribution system, as I said before.

- Then the President instructed to strengthen work with domestic producers. Successful implementation of state programs on industrial-innovative development of domestic production has created favorable prerequisites for a qualitative leap in the real sector of the economy. One of the most successfully developing directions in this area was pharmaceutical production. Why is the development of the pharmaceutical industry given such attention?

- In fact, all the years of independence, the development of pharmaceutical production in our country has always been given special significance. The industry has created a favorable investment environment, attracted major international investment. At our pharmaceutical plants with their investments came such large international companies as Polpharma, Abdi Ibrahim, Pharmstandard, Nobel. And they came to us not only with investments, but also brought their technologies and developments to our market.

Of course, this is bearing fruit. The pharmaceutical industry has received a powerful impetus for development and is undergoing significant positive changes. New plants are being built, production is being modernized.

To date, domestic pharmaceutical products cover about 11 percent of the pharmaceutical market in Kazakhstan: according to IMS Health for 2016 in the total pharmaceutical market of Kazakhstan, amounting to 458.6 billion tenge, the share of domestic producers was 52.5 billion tenge.

But, unfortunately, these indicators are not enough. According to the World Health Organization, in order to ensure national drug safety, its own pharmaceutical production should be at least 30% of the market. And now the industry is facing the task of achieving this volume.

That is, we still have a lot of work to maintain the growth rates of production, providing the country's population with affordable and high-quality domestic pharmaceutical products.

- And what role in achieving these tasks is assigned to a single distributor?

- It's all pretty simple. SK-Pharmaceuticals is a single operator that purchases medicines and medical products for all citizens receiving free treatment in the country's hospitals. By and large, this is a multi-billion dollar market for pharmaceutical companies. And in this market, unconditional preferences are given to domestic producers.

Almost half of the domestic products sold on the general pharmaceutical market of Kazakhstan are purchased by a single distributor within the framework of state support of domestic developments and the development of a competitive medical and pharmaceutical industry.

Thanks to state support, in the period from 2009 to 2017 there is a systematic increase in domestic production, which we purchase to provide medicines to patients receiving free medical treatment in the country's medical facilities. If in 2010 the volume of purchase in monetary terms was 15% and amounted to 4.8 billion tenge, in 2017 this amount reached 34.3 billion tenge, amounting to 27% of the total purchase of a single distributor.

A single distributor has two tools to support domestic producers: preferences in tender procedures and conclusion of long-term contracts.

In the tenders of a single distributor, domestic pharmaceutical manufacturers receive absolute preferences. This means that if at least one application from a domestic manufacturer is received for a tender for participation in tender procedures, then only Kazakhstan products will be considered for purchase. And if there are several such domestic producers, then the purchase will be made from the one who will offer the best price.

But the most effective tool to support domestic production is, perhaps, the conclusion of long-term supply contracts. Such contracts are concluded based on the results of an open tender, which takes place at the site of a single distributor. Winners of the tender conclude an agreement with a single distributor for a period of 10 years, that is, upon signing such an agreement, the pharmaceutical producer receives a guaranteed ten-year market.

- By what criteria are participants assessed?

- If the company wants to take part in such a competition, it must submit a carefully worked out business plan for the construction of a new pharmaceutical production, or the modernization of an already existing one. Every detail is important here - sources of financing, infrastructure and land. The Ministry of Investment and Development of the Republic of Kazakhstan gives its industry opinion on each submitted feasibility study.

If a single distributor concludes a long-term contract with the manufacturer based on the results of the competition, then he has five years to implement the project. During this time, the company should rebuild production in accordance with the standards of good GMP practice, or modernize its production, updating equipment or introducing the latest technology to produce quality modern products. If these conditions are fulfilled after five years, then in the next ten years, its products will be delivered to hospitals for the treatment of patients.

- As far as we know, such a competition at the site of a single distributor has just ended. How many domestic medicines will appear in our market in five years thanks to this competition?

- This year the competition was announced for 2119 positions, including 753 names of medicines and 1366 names of medical products. Participants submitted applications for the production in the future of anti-hypertensive, cardiac and antiepileptic drugs. Anti-diabetic medications, including insulin, and chemotherapy for the treatment of oncological diseases were also played. Also, the participants planned to produce drugs of domestic production and from Parkinson's disease.

We received 48 applications from 44 companies. During the contest, 24 companies were selected, which plan to start production of 523 medicines and 386 medical products. Long-term contracts have been concluded with them. Some of the manufacturers already have production, and successfully cooperate with a single distributor. These are Nobel AFF, Khimpharm, Abdi Ibrahim Global Pharm, Karaganda Pharmaceutical Complex, Kelun-Kazpharm, NUR-MAY PHARMACY, Superpharm, EkoPharm International, KazDia -Test "," Marai E7 Group ", etc. But there are companies with which the single distributor has not had long-term contractual relations, and they have only to start implementing their projects.

- What are the long-term contracts?

- It's too early to talk about the sums of the contract. It is very difficult to predict what the prices for medicines will be in 5 years, and in what quantities there will be a need for new drugs. But if the release of all these preparations was already established, this year we would have bought them for more than 130 billion tenge.

"The sums are enormous, of course." But this is not the first competition of a single distributor for the conclusion of long-term contracts. How many contracts are in place now and are supplies started?

- As of July 1, before summarizing the results of the recent tender, we have concluded 30 long-term contracts for the supply of 553 medicines and 213 medical products. Under these agreements 136 medicines and 152 medical products for the total amount of 28.9 billion tenge are already delivered this year.

But not all projects under these agreements have been finally implemented. In 2019, we expect the beginning of deliveries for another 308 names of medicines, and in 2021 another 109 will be launched.

- That is, in a few years, there will be enough domestic-produced drugs on the Kazakhstan market. But people in our country do not really trust domestic medicines, preferring to buy foreign medicines. What are the benefits of using domestic products for a Kazakh consumer?

- The times when domestic drugs were not trusted, long gone. Now drugs entering the market are undergoing a lot of checks. Among the requirements for medicines purchased by a single distributor for the conclusion of long-term contracts, it is mandatory that production conforms to international standards with good manufacturing practices of GMP.

Again, many foreign pharmaceutical companies have entered foreign investors, who are actively introducing new technologies in our plants. The latest developments of these large European pharmaceutical manufacturers immediately appear on our domestic sites. As a result, the consumer receives preparations of European quality, but manufactured in Kazakhstan.

In addition, among the advantages from the point of view of the consumer, it can be added that the importation of foreign medicines and medical products is usually expensive. In addition to the cost price, buying imported products, we pay additional logistics costs, and the margin that distributors receive. In addition, the import of products takes a certain time, procedures in state bodies, certificates for their import through customs procedures. Therefore, developing domestic production, we, thereby, provide more effective access of the population to cheaper, but high-quality medicines.