July 5, 2011 / 3:26 PM / 7 years ago

Russian police search Novartis, Teva offices

* Police raid Russian offices of four drugmakers

* Novartis confirms search took place

* Investigation into carve-up of state supplies -media

MOSCOW, July 5 (Reuters) - Russian police on Tuesday searched the offices of four pharmaceutical companies in Moscow, including Swiss drug maker Novartis AG and Israel-based Teva .

The website of business daily 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 over $2 billion went to six distribution firms in 2006-08.

A Novartis spokeswoman in Moscow confirmed the search took place and said the company was cooperating with the police. She declined to explain the substance of the investigation.

No one at Teva’s offices in Moscow was available for comment.

The two other firms are Russian drugmakers Valenta and Akrikhin, Vedomosti said, quoting the source.

A source close to Akrikhin confirmed the search took place, while Valenta was not available for comment.

Novartis plans to invest $500 million in Russia over the next five years and build a new plant in St. Petersburg to strengthen its position in the market, which is expected to exceed $60 billion by 2020.

Teva, the world’s largest generic drugmaker, plans to invest up to $100 million 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 Russia if they fail to develop local production and transfer technology.

International pharmaceutical firms currently control about 80 percent of the Russian drugs market and Putin said such a situation was threatening Russia’s national security.

International drugmakers see Russia as a fast-growing emerging market to offset slowing sales in Western markets. (Reporting by Maria Plis; Writing by Gleb Bryanski; Editing by Will Waterman) ($1=27.86 Rouble)

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