U.S. pharma companies are staying in Russia as other industries exit
Executives at Merck, Johnson & Johnson, and Pfizer have all stressed a need to keep providing their products in Russia.
While major companies in banking, energy, tech, and retail have cut ties or scaled back in Russia, executives at several major U.S. pharmaceutical companies said this week that they plan to keep serving the Russia market, defending the need to provide medicine and health-care products to Russians even as the country’s invasion of Ukraine continues.
Some companies acknowledged they’ve paused enrolling new patients in clinical trials in Russia, a prime location for drug trials outside the U.S. At least one firm — GlaxoSmithKline — expressly said it’s not running ads in Russia right now.
But the overall message on Russia from Big Pharma is different so far from major corporations in other industries.
“At the moment our focus is trying to make sure we don’t leave any patient behind,” Merck Chief Financial Officer Caroline Litchfield said at a conference Monday hosted by investment bank Cowen, “so we continue to try and get the products to the people both in our clinical trials, as well as quite frankly commercially who are using Merck’s products.”
Ukraine and Russia are “important markets,” Litchfield said. They represent 1% of Kenilworth, N.J.-based Merck’s business, and collectively make up 6% to 7% of the company’s clinical trial activity. Testing medicines on patients in trials is a key component of developing new therapies and winning regulatory approvals that allow pharma companies to sell their products.
For now Merck has “paused clinical trial enrollment” at new sites in both countries, Litchfield said.
Johnson & Johnson has also paused patient enrollment in ongoing trials in Ukraine, Russia, and Belarus, a company spokesperson confirmed.
Other business continues — and J&J Chief Financial Officer Joe Wolk said it’s “very important” that any economic sanctions related to Russia continue to make exceptions for health-care products.
“Literally if our products don’t get to the patients in need, people will die or have severe consequences,” Wolk said Tuesday during a Raymond James investor conference, according to a transcript.
About 1% of J&J’s sales come from Russia and Ukraine, Wolk said. Half the company’s Russia business is from pharmaceuticals, he said, and the rest is split between medical devices and consumer health products.
The industry’s main trade group, PhRMA, said its members “serve a critical humanitarian role,” and that each company is assessing its ability to continue operating. “As an industry, we are united in condemning the violence unfolding against the people of Ukraine,” spokesperson Brian Newell said.
GlaxoSmithKline, a British company with offices in Philadelphia, said that “everyone has the right to access health care” and that the company will continue supplying its products “to the people of Russia, while we can.”
But GSK said it will halt “to the fullest extent possible, any direct involvement and support to the Russian government and military.” The company is “stopping all advertising and will not enter into any contracts that directly support the Russian administration or military,” according to its statement.
As for clinical trials in Russia, those are “continuing with no disruption at this stage,” a GSK spokesperson told The Inquirer. “We are not currently recruiting new patients or starting up new clinical operations.”
Pharmaceutical distributor AmerisourceBergen, headquartered in Conshohocken, announced Wednesday that it was “ceasing any new business initiatives” in Russia. Its World Courier division will continue services in Russia for nearly 60 clinical trials, along with the “commercial distribution of some cancer treatments.”
“Our hope in sharing this perspective is to articulate the nuanced choice AmerisourceBergen must make to meet the needs of vulnerable patients, support medical innovation, and to do our part to stand against imperialism,” company group president Robert Mauch said in the announcement.
‘Undermining the effort’
Earlier in the week, the distributor was highlighted on a Yale School of Management list of companies still operating in Russia with “significant exposure” — part of a campaign by Yale professor Jeffrey Sonnenfeld to get companies to stop or curb Russian business in order to weaken the economy and Vladimir Putin’s regime.
AmerisourceBergen is now reflected on Sonnenfeld’s list of companies that have “curtailed Russian operations,” along with more than 300 other firms across industries. Visa, Shell, Amazon, and McDonald’s are just some of the companies that have suspended business in Russia.
Arthur Caplan, a bioethics professor at New York University and previously with the University of Pennsylvania, is advocating for scientists and doctors to isolate Putin and Russia. In a March 4 editorial for the Cancer Letter, Caplan recommended ending sponsorship or participation of research in Russia and not publishing any medical work from or by Russians.
“Any type of collaboration with Russia is undermining the effort the west is trying to use to stop the war,” Caplan said in an interview. “I think we have to use extreme pressure to stop the horrific violence in Ukraine.”
When it comes to clinical trials, he said, drug companies cancel them for business decisions, “for less lofty reasons than war.” If pharma companies want to provide essential medicines in Russia, Caplan said it would be “better to give them away.” In his view, profiting and “selling is absolutely not acceptable.”
Several biotech executives also spearheaded an open letter Feb. 26, calling for “economic disengagement” from Russia within their industry. It has since attracted support from more than 800 signatories at life sciences companies, investment firms, and other groups.
On Thursday, Ukraine’s government called for boycotts of 50 international companies doing business in Russia as of March 9 — including Pfizer and J&J.
Pfizer CEO Albert Bourla said during an interview with Face the Nation on CBS that security issues and the pain from Russia’s invasion are “heartbreaking,”
Asked if Pfizer would divest from Russia, Bourla said medicines are typically exempt from trade restrictions, otherwise Russians would be denied care like cancer treatment.
“Clearly we’re not planning to invest in Russia” going forward, Bourla said on the program, adding that Pfizer has “very little” investment in Russia currently. Russia accounts for less than half a percent of the company’s revenue, he said.
Ukraine’s Ministry of Foreign Affairs, in another boycott-related post on social media, accused J&J and six other brands of “funding Putin’s propaganda machine” by running commercials on Russian state television, at least as of March 1.
A J&J spokesperson didn’t say whether the company is still running advertising in Russia.
During times of “humanitarian crisis, access to health-care products is more important than ever,” the J&J spokesperson said. “We remain committed to providing essential health products to those in need in Ukraine, Russia, and the region, in compliance with current sanctions and while adapting to the rapidly changing situation on the ground.”