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Global pharma industry weighs Russian operations

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Insulin pen manufacturing.

Insulin pens being manufactured by Eli Lilly & Co. The pharmaceutical giant said it will refocus its efforts in Russia on cancer and diabetes care. Frederick Florin/AFP Getty Images

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In the month since Russia invaded Ukraine, hundreds of global companies have pulled out of Russia. But for the pharmaceutical industry, the leaving has been noticeably slower. These companies argue that they provide life-saving medications to people in Russia and have to take humanitarian concerns into consideration as they ponder their business operations in the country.

Big pharmaceutical companies do a lot in Russia, from manufacturing to running clinical trials and selling drugs. After the invasion, they’re in various stages of rethinking their commitments, but their exit calculus is more complex than for, say, McDonald’s or Coca-Cola.

“They’re kind of going down the line of their products and saying which ones are essential for human life and which ones are not, and making some choices there,” said Witold Henisz, director of the Wharton School’s Political Risk Lab.

According to Henisz, companies have pulled some nonlifesaving products, like Cialis and Botox. Pharmaceutical company Eli Lilly said it’s refocusing its operations on helping people with cancer and diabetes. And Lilly and Pfizer said they’re donating profits from Russia to humanitarian efforts.

Novartis has suspended marketing there but is continuing to manufacture at a facility in St. Petersburg. Some critics say the industry should pull out of Russia entirely.

“Remember, it’s not a war, it’s an invasion,” said Arthur Caplan, bioethicist at New York University’s Grossman School of Medicine. “It is basically a giant country bullying another one and saying, ‘We’re taking you over. And we’re going to use civilian terrorism to do it.'”

The debate within the pharmaceutical industry has gone public, with leaders of some small and midsized companies circulating a letter urging economic disengagement.

But even one of the co-authors, Nkarta Therapeutics CEO Paul Hastings, argued there should be limits aimed at protecting citizens.

“We’re in the business of health care. We’re in the business of helping and curing patients. We have to make sure that if we’re providing medicine, it gets to the patient,” Hastings said.

Russian President Vladimir Putin should be punished, he said, but health care consumers in Russia shouldn’t suffer as a result.

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