Banner Default Image

Insights

Blog Img

Drugs, Destruction, and Development: An analysis into the impact of the Ukraine invasion on the pharmaceutical industry

In the early dawn of February 24th, Russian President Vladimir Putin launched what was to become the largest full-scale invasion in Europe since World War II. 6,000 Russian troops marched into Ukraine, signalling the start of a war which has no clear end in sight.

Since then, the general Ukrainian population has been mobilised by their President, Volodymyr Zelenskyy; many civilians fled into the neighbouring EU and surrounding countries, but many also stayed to fight. The war has already eroded decades worth of sector-specific resources like R&D infrastructure, databases, and the displacement of high-tech teams, all of which had previously enabled Ukraine to offer a rapid discovery output which enabled global therapeutic advancement.

The impact of the invasion on the Ukrainian pharmaceutical industry was marked and immediate. Clinical trials, manufacturing, and research came to an immediate halt, ceasing trade from inside and outside the state. Ukraine hosts a large number of clinical trials due to its willing patient population, combined with the lower cost of business. This has had a knock on effect to the pharmaceutical economy as a whole, as Ukraine accounted for over 100 of Roche and Merck’s clinical trials, according to Reuters; for Roche, this means that Ukraine “accounted for 1.5% of the active trial population across its global studies”. Clinicaltrials.gov noted that in early April of 2022, over 400 clinical trials were in process across Ukraine. The impact this invasion has had on the clinical trial sector has been stark; not only are clinical trial companies now trying to account for where their patients are in order to provide their duty of care toward their patients. Additionally, this will stagnate the development of new drugs and therapeutics treatments. For example, Karuna Therapeutics is in its second phase 3 study in schizophrenia, named EMERGENT-3, but are uncertain of the future because 10 of the 19 trial sites are in Ukraine. This means that the development of EMERGENT-3 will be prolonged until all necessary trials have been undertaken – thereby moved out of Ukraine with new clinical trial patients. This will ultimately delay for when new drugs hit the market and are available to patients.

Restoring the role which pharmaceuticals played in the Ukrainian economy will take time and money. Rebuilding facilities with state-of-the-art equipment in a volatile country is a no easy feat - and certainly not a wise investment. But where does this leave the pharmaceutical industry? Pharmaceutical companies will attempt to salvage what they can from Ukraine in terms of data, equipment, and personnel. After this, they will look to rebuild. Unfortunately, due to the damage incurred in Ukraine to its infrastructure, economy, and future, this rebuilding will have to be done elsewhere. The scientists previously provided by Ukraine’s higher education institutions have been displaced due to this invasion. On top of this, future budding scientists will have to look outside of Ukraine to further their education; education institutions have suffered and understandably all but halted during this tumultuous period. Therefore, to recover from this will not only take rebuilding institutions and replacing equipment. They must also attract talent by the way of students, who may well prefer a state where the threat of a Russian Invasion is comparatively less likely. This will be done in states which mimic the environment of Ukraine, in terms of: ease of access into Europe and the Middle East; willingness of volunteers for clinical trials; and cheap labour. However, these things do not come without trade-offs.

This invasion is only the beginning of what will be a prolonged and profound impact on Ukraine and its pharmaceutical industry. When this invasion ends, and with what result is unknown. Therefore, when Ukraine’s economy looks to rebuild it will be a long process. The role that the pharmaceutical industry will play in this rebuild is known – will companies look to restart clinical trials in Ukraine? Will they rebuild manufacturing sites, laboratories, and universities? This can only become clearer with time. Until then, pharmaceutical companies will look elsewhere to research, trial, and manufacture their goods.

Mantell Associates is a specialist Pharmaceutical and Life Sciences headhunting firm with our headquarters based in Central London. To find out how we can assist with your business requirements or if you are looking for your potential next step in your career, contact Lewis Davis on +442038547700 or lewis.davis@mantellassociates.com.