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The demand for pharmaceutical products is growing rapidly in Russia (20% annual increase in the past few years.) Currently, a large proportion of medicines in Russia are imports (75% in terms of value and 25% in terms of volume). A publication in 2014, the 2020 Pharmaceutical Development Program, aims to ensure that at least 50% of pharmaceuticals sales (in terms of value) in Russia originate from home, and Vladimir Putin has reportedly pledged almost $4 billion to support the domestic pharmaceutical industry. Putin set a target for the local industry to be producing 90% of the country essential medicines and he warned that multinational drug makers will face restrictions in the country if they fail to develop production facilities and transfer technology there. RossRx is considering the choice between export vs. FDI to Russia. How would your advice to the company would be affected by the following factors:
a. RossRx is switching its product portfolio from high-end brand-name drugs to low end generics
b. Russia is expected to join WTO in the near future
c. The foreign exchange market is expected to be highly volatile in the next few years
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