KPMG Pharma Bulletin Issue #9, 2016 (September)

KPMG Pharma Bulletin Issue #9, 2016 (September)

Victoria Samsonova

Director, Head of Healthcare & Pharmaceuticals

KPMG in the CIS



Additional subsidies granted to pharmaceuticals producers

The Prime Minister of Russia signed the Government’s Resolutions #860 and #861 dd. August 30, 2016 updating the Program of Medical and Pharmaceutical Industry Development through 2020.

The Resolution #860 expands the list of priority areas for development, extends the term of entering a newly developed pharmaceutical into market circulation from 3 to 4 years, increases the maximum amount of subsidy from RUB 200 million to RUB 400 million rubles etc.

The Resolution #861 enables subsidy financing for projects of producing several pharmaceutical substances under one subsidy agreement. The document also sets out the rules for supporting new pharmaceuticals producers, who have not yet passed licensing procedures.

Subsidies are intended for projects run by Russian manufacturers aimed at the developing pharmaceuticals for treatment of hematological, oncological and congenital hereditary diseases; pharmaceuticals used in transplantation; pharmaceuticals for early diagnosis and treatment of respiratory diseases; pharmaceuticals used for treatment of painful conditions and rare (orphan) diseases.

The Ministry of Healthcare suggests to stop procuring expensive pharmaceuticals from small businesses

The Ministry of Healthcare has prepared the draft Federal law "On Amendments to Article 30 of the Federal Law "On Contract System" to improve the procurement procedures for essential drugs (ED) and immunobiological pharmaceuticals for immunoprophylaxis.

Amendments shall exempt the state customer from the obligation to purchase not less than 15% of the total annual volume of pharmaceuticals from small businesses and socially oriented non-commercial organizations, as currently prescribed by the Federal Law 44-FZ "On Contract System".

According to the official position of the Ministry of Healthcare, all the contracts for purchase of pharmaceuticals with the beginning price exceeding RUB 10 million may be concluded with large suppliers. Generally, large bids include pharmaceuticals covered by “7 Nosologies” program and immuno-biological drugs.

The Ministry of Healthcare notes that the necessary resources and capacities to ensure supply of expensive pharmaceuticals and immuno-biological pharmaceuticals in required volumes across the country are available with large market players (such as Pharmstandard, Farmimeks, R-Pharm, Medipal-Onco, Protek, Rosta, Teva, NPO "Microgen” of the Russian Ministry of Healthcare, FSUE "PIPVE n.a. M.P. Chumakov", NPO Petrovax Farm, National Immunobiological Company and etc.).

Moreover, immuno-biological pharmaceuticals have a very short shelf-life period and are subject to special conditions for production and delivery. The experience of immuno-biological drugs procurement in 2011-2015 has demonstrated that the small businesses do not take part in these tenders, due to a number of objective reasons.
The objective of the draft law is to secure from the risk of shortage of immuno-biological drugs supplied to the public sector. The regulators are concerned that such a risk could result from formalistic procedures of expensive pharmaceuticals procurement from small businesses and socially oriented non-commercial organizations, which could entail to disruption and unjustified delays in selecting the suppliers.

Only finished dosage forms will be considered as locally-produced drugs from 2017

As of January 1, 2017 pharmaceuticals which are only packaged in Russia will not qualify for “made-in-Russia” product anymore, as announced by the Deputy Minister for Industry and Trade, Mr. Sergey Tsyb at the First All-Russian GMP Conference.

Mr. Tsyb noted that the Government’s Resolution #1289, which limits participation of foreign producers in state procurement of pharmaceuticals, stipulated packaging of internationally produced pharmaceutical in Russia as a sufficient condition to qualify for a local product only till the end of 2016. From the beginning of 2017, pharmaceuticals will be considered as produced in Russia only if the finished dosage form is maniufactured in Russia.

At this point, there are no additional rules relating to ‘depth’ of localization for pharmaceuticals procured for public needs.

Federal Anti-Monopoly Service clarifies the new Trade Law provisions

The delivered clarifications covers the following topics in context of the Federal Law “On Basics of State Regulations of Trade Activities” (hereinafter – the Trade Law):

  • definition of a ‘trade network’,
  • services on product promotion,
  • access to information to counterparty selection criteria,
  • the total remuneration (fee),
  • extended application of Article 9 of the Trade Law,
  • extended application of Article 13 of the Trade Law,
  • administrative responsibility for violation of the Trade Law.

Additionally, in course of the international scientific-practical conference "Ensuring fair competition in the trade activities", the Head of the Department of Control over Social Sphere and Trade of the FAS confirmed that the Trade Law shall not apply to retail sale of pharmaceuticals – except for BAAs which retail trade is subject to the Trade Law.

Ministry of Healthcare developed amendments to the procedure of assessing pharmaceuticals’ interchangeability determination

Public debates have been completed in respect of the draft Government Resolution "On Amending the Government Resolution #1154 dd. October 28, 2015 "On the Procedure of Assessing Interchangeability of Pharmaceuticals", developed by the Russian Ministry of Healthcare.

The following clause is added to the existing procedure:

  • In case of absence a reference pharmaceutical which quality, efficiency and safety are proven by clinical and pre-clinical trials, pharmaceuticals registered in Russia for the first time based on self-conducted pre-clinical and clinical trials and circulating in Russia are deemed to be the reference pharmaceuticals.

Ministry of Healthcare proposes strengthening of quality control over pharmaceuticals circulation in Russia

The Ministry of Healthcare has developed a draft Federal Law "On Amendments to the Federal Law" On Circulation of Pharmaceuticals" addressing the issue of releasing pharmaceuticals for medical use into circulation in Russia and to Article 14 of the Federal Law "On Immunoprophylaxis of Infectious Diseases."

The document is supposed to tighten the quality control of pharmaceuticals for medical use being entered into circulation in the Russian Federation.

The new quality control procedures include independent laboratory testing of pharmaceuticals and analysis of data submitted by pharmaceutical producers or importers to the federal executive authority on healthcare surveillance.

Russian sanctions on seawater could affect pharmaceutical market

Starting from November 1, 2016, the list of products prohibited from being imported to Russia includes the sub-item 250100 of the Foreign Economic Activity Commodity Nomenclature (TN VED). This sub-item covers seawater and some products containing it. Import of certain pharmaceuticals for prevention and treatment of nose and throat diseases containing seawater, as well as raw materials for their production, is at risk.


Foreign participants of international pharmaceutical clusters are exempt from some state control measures

The Government has released the Resolution #923 dd. September 14, 2016, listing state control measures that do not apply to foreign companies and individual entrepreneurs conducting medical activities in the territory of international medical clusters.

In particular, the following measures do not apply:

  • Regulations on the state control over medical devices circulation, approved by the Government’s Resolution #970 dd. September 25, 2012;
  • Regulations on the federal state supervision over pharmaceuticals circulation, approved by the Government’s Resolution #1043 dd. October 15, 2012;
  • Regulation on the state control over quality and safety of healthcare services, approved by the Government’s Resolution #1152 dd. November 12, 2012.

Medical technologies and pharmaceuticals will be allowed for use in the international medical cluster not only if they are registered in the country of origin, but also if they are used in practice in that country. To achieve the targets set, special legal regimes will be enabled in the cluster, covering the activities in area of public health, pharmaceuticals circulation, urban development, licensing, technical regulation, electricity, education, sanitary-epidemiological welfare.

The previous Pharma Bulletin issues are accessible our site.

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