KPMG Pharma Bulletin Issue #9, 2017 (September)
KPMG Pharma Bulletin Issue #9, 2017 (September)
The Prime Minister has signed the Government Resolution #1135 dd. 20.09.2017, affirming the criteria for identifying industrial products having no analogues produced in Russia.
The document envisages:
− criteria for classifying goods as industrial products having no analogues produced in Russia;
− rules for applying the above classification criteria;
− requirements to expert institutions defining the differences of characteristics of ‘made-in-Russia’ industrial products and other products;
− rules for selecting the above expert institutions;
− approach to setting the expert institutions’ fees for the above activities;
− upper limit of the fee for the expert examination services.
The documents qualifying products as having no ‘made-in-Russia’ analogues which were issued by the Ministry for Industry and Trade prior to the above Government Resolution enactment, shall remain in effect until the date of such documents validity period expiration.
The Ministry for Industry and Trade is authorized to form the Commission on qualification of industrial products as having no ‘made-in-Russia’ analogues and to affirm its members and regulations.
The Ministry of Finance published the draft Federal Law “On Amendments to Article 3 of the Federal Law “On Procurement of Goods, Works and Services by Certain Types of Legal Entities”, suggesting to preclude conflicts of interest between the public customer and tender participants.
A conflict of interest shall be understood as a situation when the public customer’s top manager and/or a member of the procurement committee is/are:
− married to individuals being the beneficiaries, the sole executive body of the legal entity, members to the collegial executive body of the legal entity, the head of an institution or a unitary enterprise participating in the public tender;
− married to the individuals who are the public tender participants;
− close relatives (parents and children, grandparents and grandchildren, brothers and sisters, adoptive parents or adopted children) of the individuals participating in the public tender.
The ‘beneficiaries’ include individuals holding directly or indirectly more than 10% of a joint-stock company’s voting shares or over 10% of a limited liability company’s share capital, or empowered to influence the management decisions of a legal entity.
The Prime Minister signed the Government Resolution #1042 dd. 30.08.2017 establishing new rules for calculating fines and penalties for improper performance of obligations under public procurement contracts.
Particularly, the fine may vary depending on the contract price, whereas the total amount of penalties (fines, late payment interests) shall not exceed the contract price.
The Resolution also sets out the rules for calculating fines related to public procurement contracts involving small enterprises and socially oriented not-for-profits entities.
The Ministry of Healthcare is drafting amendments to the Russian Code of Administrative Offences on sanctions to companies submitting misleading data during the state (re)registration of maximum selling prices for EDL products.
In particular, it is proposed to introduce an administrative fine for companies equaling a double amount of EDL sales revenues received unlawfully as a result of overstating the maximum selling price (calculated for the entire period when the offense takes place but not more than one year).
The Ministry of Healthcare has updated the rules for drugs distribution by pharmacies by the Order dd. 11.07.2017 # 403н "On Approval of Rules for Distribution of Pharmaceuticals for Medical Use, including Immunobiological Pharmaceuticals, by Pharmacy Institutions, Individual Entrepreneurs Licensed for Pharmaceutical Activity".
The Order, inter alia, determines the following:
− the types of pharmaceuticals that may be traded by pharmacies;
− specific rules for selling narcotic, psychotropic, immunobiological pharmaceuticals;
− the timeframes for pharmaceuticals distribution;
− requirements to primary and secondary packaging of pharmaceuticals sold by pharmacies;
− the retention period for prescriptions of the pharmaceuticals sold;
− duties of pharmacy employees in cases of identifying prescriptions issued not in line with the legislative rules;
− specific rules for selling pharmaceuticals subject to strict record-keeping and storage;
− specific rules for selling pharmaceuticals under requisition slips.
The Order of the Ministry of Healthcare dd. 14.12.2005 # 785 "On the Rules for Pharmaceuticals Distribution" with all its amendments and additions is now out of legal effect.
The Ministry also issued clarifications on applying the provisions of the Order # 403н. In particular, Clause 14 introduces a new requirement on retaining drug prescriptions by a pharmacy or a correspondingly licensed individual entrepreneur during 3 months, for the following types of drugs:
− pharmaceuticals in liquid dosage form containing more than 15% ethyl alcohol (volume-wise);
− pharmaceuticals treated as antipsychotics (code N05A), anxiolytics (code N05B), hypnotic and sedatives (code N05C), antidepressants (code N06A) under the anatomical therapeutic and chemical classification.
The above clarifications highlight that one shall retain drug prescriptions for the above products issued in the format # 107-1 and having validity period up to 60 days and up to 1 year. In the latter case, the period of storing the prescription document shall be calculated from the date of selling the last batch of the pharmaceutical to the patient.
The clarifications also set out detailed rules for selling narcotic and psychotropic pharmaceuticals, including purchases by proxy.
The Prime Minister signed the Government Resolution dd. 25.09.2017 # 1159 amending the Regulation of the Ministry of Healthcare of the Russian Federation.
In particular, the following new powers and responsibilities are assigned to the Ministry:
− registration of pharmaceuticals intended for circulation in the unified market of the EEC;
− approval of the general official description of a pharmaceutical, instructions for medical use, the regulatory document on quality, packaging layouts; coordination of the risk management plan while using and registering the pharmaceutical;
− interaction with the authorized local authorities of the EEU member states , Eurasian Economic Commission and its Expert Committee on pharmaceuticals, in areas of pharmaceuticals circulation and registration matters;
− issuing permissions for import of pharmaceuticals to the Russian Federation in specific cases.
The Ministry of Finance clarified the rules for applying 10% VAT rate to sales of medical devices (medical equipment).
Currently, there is a formal difference of definitions used in the Russian Tax Code and in the industry-specific legislation (‘medical devices’ and ‘products for medical use (medical equipment)’ respectively).
According to the Federal Law dd. 07.03.2017 # 25-FZ "On Amendments to the Part Two of the Tax Code of the Russian Federation" entered into force from 01.07.2017, the VAT exemption and 10% VAT rate apply for medical devices (medical equipment) provided that the company submits to the tax authority:
- the registration certificate for a medical device issued in accordance with the EEC laws, or
- until 31.12.2021, the registration certificate for a product for medical use, issued in accordance with the Russian domestic legislation.
Along with the above, the registration certificates issued as per the old template (i.e. using the term ‘product for medical use (medical equipment)’) should be replaced for certificates of the new format before 01.01.2021.
Thus, the old-pattern registration certificates remain valid until 01.01.2021; up to this date, the corresponding products, are eligible to VAT exemptions/reduced VAT rate along with those having new registration certificates.
The Ministry of Healthcare presented to the Government the draft Strategy of Healthcare sector development up to 2025. The document presumes creating the National patientoriented healthcare system in Russia.
As a first phase, it is proposed to create a three-tier system of medical institutions, as well as to restructure the medical staff education system, to commence implementation of scientific-and-technical projects on "the Future’s Healthcare" and to finalize the regulatory framework for the interaction of private and public health sectors.
At the second phase of the reform, it is planned to develop the Unified State Information System (ESIS) for the healthcare market.
The Ministry expects the federal budget’s healthcare expenses to remain at around 3.7% of the GDP until 2019.
Another focus of the second phase of the Strategy is implementing ‘innovative medical technologies’ in healthcare.
The obligatory health insurance system is, however, not supposed to change significantly. Potentially, insurance tariffs might be differentiated based on ‘’ of insured persons, in the long-term perspective.
The Federal Service for Supervision in the Sphere of Healthcare (Roszdravnadzor) has developed a draft Departmental Order "On Approval of Lists of Indicators of Effectiveness and Efficiency of Control and Supervisory Activities of the Federal Service for Supervision over Healthcare and its Territorial Bodies".
The document sets out lists of effectiveness indicators that Roszdravnadzor should comply with in area of pharmaceuticals circulation, as well as exercising statutory control over medical devices circulation, quality and safety of medical care.
In particular, the statutory control over pharmaceuticals circulation is aimed at eliminating:
− fatal cases resulting from use of low-quality, counterfeit and falsified pharmaceuticals;
− non-compliance of a licensee with the licensing requirements;
− lack of the business address in the license or performance of the licensee’s business activities at the address not stated in the license;
− circulation of low-quality, counterfeit and falsified pharmaceuticals;
− employees’ non-compliance with the licensing requirements;
− failure to fulfill orders on eliminating the identified breaches of mandatory requirements.
The National Telemedicine Association (NTMA) drafted and submitted to the Ministry of Healthcare the draft procedure of rendering medical services using telemedicine technologies. The document is supposed to specify the provisions of the Law on telemedicine, which comes into force on 01.01.2018.
The document sets out the principles of telemedicine operators functioning, and proposes to establish guarantees of patient’s rights and mechanisms of legal protection for doctors.
The previous Pharma Bulletin issues are accessible our site.
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