KPMG Pharma Bulletin Issue #8, 2018 (August)

KPMG Pharma Bulletin Issue #8, 2018 (August)

Victoria Samsonova

Director, Head of Healthcare & Pharmaceuticals

KPMG in the CIS


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On introducing generics to the market

The Russian Ministry of Healthcare is developing a draft law establishing the liability for the marketing authorization (registration certificate) holder / owner for a biotechnological and (or) orphan drug for failure to deliver the drug’s samples for clinical trials within 4 years from the registration date.

The measure is essential for state registration of biotechnological and (or) orphan generics. Samples of reference pharmaceuticals (drugs of comparison) are necessary for conducting clinical trials of a generic.

In addition, the Ministry is working on amendments to the Russian Code of Administrative Offences, introducing administrative liability for the marketing authorization holders / owners (or their authorized representatives) for:

- failure to provide samples of a bio-technological or orphan pharmaceutical;
- including misleading information (or non-including relevant information) into the patient leaflet;
- failure to amend the patient leaflets for drugs registered under the same international non-propriety name.

The draft laws are being developed in accordance with paragraph 1.1 of the action plan ("Roadmap") “Development of Fair Competition in Healthcare”, as approved by the Order of the Russian Government # 9-р dd. 12.01.2018.


Amendments proposed to the regulations on GMP compliance certificate issuance

The Ministry for Industry and Trade has developed changes to the Order # 4369 dd. 31.12.2015 “On Approval of the Administrative Regulations for Rendering by the Ministry for Industry and Trade of the Russian Federation of a Public Service on Issuance of a Document Confirming the Compliance of the Manufacturing of a Pharmaceutical with the Good Manufacturing Practice Requirements, which is Subject to Submission at the Request of an Authorized Body of the Country into which the Pharmaceutical is Imported”.

The document was developed to align the said Order with the currently effective Russian legislation. In particular, it is proposed to supplement the Section III “Structure, Sequence and Deadlines for Execution of Administrative Procedures, Requirements to the Course of Action, including the Specifics of Executing Procedures in Electronic Form” with the clause: “Correcting Typos and Mistakes in Documents Issued by Means of the Public Service”.

The period for the administrative procedure execution is supposed not to exceed 10 business days from the date of registering the application for correction of mistakes made in a document.

The public debates on the draft order were closed on August 29, 2018.


The Standard Supply Contract for pharmaceuticals is amended

Basing on law enforcement practice, the Order # 367n of the Russian Ministry of Healthcare dd. 19.06.2013 amended the Standard Contract approved by the Order of the Russian Ministry of Healthcare # 870н dd. 26.10.2017.

The following changes in the specification (Appendix # 1 to the Standard Supply Contract) were introduced:
- the column “name of the goods” are extended by international non-propriety name / chemical / group name, trade name for the unified catalogue of pharmaceuticals; a separate column is also provided for the name stated in registration certificate;
- new columns are added: dosage form, dosage;
- the column “price per unit” is specified: the price is indicated without VAT, then VAT amount separately and the total price.

In addition, it is clarified that such requisites as “name of the goods” (international non-propriety name, trade name), “dosage form”, “dosage”, and “unit of measurement” should be indicated according to the unified catalogue of pharmaceuticals.

The Order # 367н is not applicable to purchases of goods for state and municipal needs, which are announced by the Unified Information System in the field of procurement until August 14, 2018.


FAS supported increasing public purchase order for drugs without bidding

According to the announcement by “Russia’s People's Front” in end-July 2018, the Ministry of Finance voted for raising the upper limit of drugs public procurement without bidding from 200 kRUB to 400 kRUB. The Russian Federal Antimonopoly Service (FAS) also supports this change.

“The FAS has earlier submitted proposals to the Ministry of Finance for considering increase of a contract price when purchasing a drug for a particular patient. The currently effective Federal Law on Public Procurement System limits the maximum contract price for such a purchase by 200 kRUB, subject to approval by the medical commission. However, economic factors and significant increase of drugs prices, including those of foreign origin, make this upper limit insufficient for purchasing certain drugs prescribed to a patient, since the cost of one dosage could exceed 200 kRUB”, – the FAS highlighted.

The FAS noted that the 200 kRUB cap does not allow urgently purchase drugs from a sole supplier. Therefore, customers are forced to use other non-specific procurement methods (in particular, e-auctions) which are time-consuming.

To implementation this initiative, already approved by the Government (represented by the Ministry of Finance and the FAS) and by public structures such as the Russia’s People’s Front and patient organizations, amendments are necessary to Article 93 of the Federal Law # 44-FZ dd. 05.04.2013 “On the Contract System in the Procurement of Goods, Works, Services for State and Municipal Needs”. However, no draft law was submitted to the State Duma yet.


FAS suggests prohibition for purchase orders for complex services in public procurement of pharmaceuticals

FAS developed the draft Resolution of the Government of the Russian Federation “On Requirements to Formation of Lots in Procurement of Pharmaceuticals for Medical Use for State and Municipal Needs”.

Currently, state and municipal customers prefer including complex services on supply, storage and release of pharmaceuticals into one lot (purchase order). This approach is viewed as the most convenient as it allows receiving all the services mix from one supplier reducing the administrative burden of numerous procurement formalities.

The FAS, however, concludes that such an approach can result in restricting fair competition and inefficient spending of state funds. Specifically, companies that are licensed for only one type of pharmaceutical activity (manufacturing only, or wholesale trade only, or retail trade only), are unable to take part in the procurement. Consequently, only companies having simultaneously licenses for manufacturing, wholesale and retail trade of pharmaceuticals can be admitted to the tender. That appears to be an excessive and unjustified administrative barrier for market players.

The draft is aimed to eliminate the above restriction of competition, to increase the number of potential bid participants and to improve the efficiency of budget expenditures.

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Medical devices

EEC Council approved documents for medical devices registration

The Eurasian Economic Commission (EEC Council) approved:

- the Data Book of Types of Changes to be Made to a Registration Dossier of a Medical Device (Resolution of the EEC Council # 134 dd. 21.08.2018), and
- the Classifier of the Types of Documents to be Completed while Reviewing the Registration Dossier of a Medical Device (Resolution of the EEC Council # 135 dd. 21.08.2018).

The document stipulates requirements to the Data Book structure, including its requisite composition and structure, the requisites value ranges and the rules for their formation. The Data Book is based on the coded data on the types of changes introduced into registration dossiers of medical devices in accordance with the Rules for Registration and Assessment of Safety, Quality and Efficacy of Medical Devices, as approved by the Resolution of the EEC Council # 46 dd. 12.02.2016.

The Classifier, in its turn, is based on the coded data on the types of documents to be completed when reviewing the registration dossier of a medical device.

Both the Data Book and the Classifier form a part of the EAEU unified information system. Application of their codes shall be obligatorily while performing common EAEU processes in area of, inter alia, medical devices circulation.

Also, it is supposed to use both documents for digital interaction between the EAEU member states’ regulators, including during formation, maintaining and using a unified register of medical devices registered in the EAEU, as well as preparing applications for procedures provided for by the Registration Rules.

The Data Book and the Classifier are to be applied starting from September 23, 2018.


Rules to be amended for medical devices circulation within EAEU

The Russian Ministry of Healthcare has developed amendments to the Resolution of the EEC Council # 46 dd. 12.02.2016 “On Rules for Registration and Assessment of Safety, Quality and Efficacy of Medical Devices”.

The amendments allow EAEU member states register medical devices and (or) change information in registration dossiers at the discretion of the manufacturer (its authorized representative) during the transition period until 31.12.2021, according to the aforementioned Rules or the corresponding laws of the EAEU member state.

Also, medical devices registered under the laws of an EAEU member state upon enactment of the Agreement on Unified Principles and Rules for Medical Devices (Medical Devices and Equipment) Circulation within EAEU shall circulate in the corresponding member state until their registration documents expire.

The purpose of the amendments is to harmonize the EAEU Agreement’s requirements and to establish fair and competitive market access conditions for all manufacturers (and their authorized representatives), as well as to ensure using the medical devices duly registered in one EAEU member state for all the potential users (healthcare providers, patients).

The Resolution is expected to come into force on January 1, 2019.


Registration certificate for a medical device is updated to be available for entrepreneurs

The Russian Federal Service on Surveillance in Healthcare and Social Development (Roszdravnadzor) amended the Appendix to the Order of Roszdravnadzor # 40-Пр/13 dd. 16.01.2013 “On Approval of Template Registration Certificate for a Medical Device”. The respective Order of Roszdravnadzor # 4510 dd. 10.07.2018 was registered with the Ministry of Justice on August 7, 2018.

The following changes were introduced, to align the registration certificate template with the Resolution of the Government of the Russian Federation # 633 dd. 31.05.2018 “On Amending the Rules for the State Registration of Medical Devices”:

- the field “Type of medical device” is excluded;
- in the field “Manufacturer”, the data of a document, identifying an individual entrepreneur is excluded;
- the field “This registration certificate is issued to” is specified so that an individual entrepreneur could be the certificate holder.

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Production of biomedical cellular products (BMCP) is subject to licensing

The Russian President signed the Federal Law # 323-FZ dd. 03.08.2018 “On Amendments to Certain Legislative Acts of the Russian Federation Concerning the Circulation of BMCP” clarifying certain provisions of the Federal Law # 180-FZ dd. 23.06. 2016 “On Biomedical Cellular Products”, in particular:

- state control enabled over the activities in area of BMCP circulation;; the rules for organizing and conducting inspections of such activities are to be provided for by federal laws;
- waste generated during BMCP production and storage is classified as medical waste;
- the term “biomedical cell product” is extended, and it is specified that a BMCP composition may also include API recorded in the Russian state register of pharmaceuticals;
- the list of documents forming the registration dossier of a BMCPs was specified.

Furthermore, BMCP manufacturing now becomes subject to mandatory licensing, with the Federal Law # 99-FZ dd. 04.05.2011 “On Licensing of Certain Types of Activities” being amended correspondingly.

In addition, state control over BMCP circulation becomes an element of the state control in the sphere of health protection. The Federal Laws “On Fundamentals of Protecting the Health of Citizens in the Russian Federation” # 323-FZ and “On Protection of the Rights of Legal Entities and Entrepreneurs in the Exercise of State Control (Supervision) and Municipal Control” # 294-FZ are supplemented with the corresponding provisions.


Procedure approved for carrying out BMCP safety monitoring

The Order of Roszdravnadzor # 5072 dd. 08.08.2018 has approved the procedure for BMCP safety monitoring, in particular:

- legislative framework for the monitoring;
- list of state executives entitled to conduct the monitoring, their rights and responsibilities;
- the rights and obligations of BMCP circulation participants in course of the monitoring;
- timeframes for BMCP circulation participants to provide the data required for the monitoring;
- rules for summarizing the information collected and evaluating the monitoring results.

In particular, BMCP safety is to be monitored by Roszdravnadzor by analyzing the following information provided by the BMCP circulation participants: side effects, adverse reactions, serious adverse responses to BMCP use, individual intolerance, lack of efficiency, specifics of interaction with other pharmaceuticals, medical devices, food products, other BMCP, as well as other facts and circumstances that pose a threat to life or health of a patient when using the BMCP, as identified at all stages of the BMCP circulation in Russia.

BMCP safety monitoring is to be performed in accordance with the Russian legislation on personal data protection.


Rules established for fee formation for works performed by GILSiNP

The Order of the Ministry for Industry and Trade # 2593 dd. 04.07.2018 stipulated the procedure for determining the standard cost of works performed by the State Institute of Pharmaceuticals and Good Practices (GILSiNP) which is controlled by the Ministry.

The standard cost of the works performance is to be calculated according to a formula, either for the entire scope of works, or, in the case the public statement of works sets the performance targets, per unit of volume, using indicators of material, technical and labor resources required to perform the work.

Adoption of this document invalidates the Order of the Ministry for Industry and Trade # 2579 dd. 26.07.2016 “On Approval of the Procedure for Determining the Standard Cost of Performance of Public Works by the State Institute of Pharmaceuticals and Good Practices Administered by the Ministry for Industry and Trade”.;n=180109;req=doc?req=doc&base=LAW&n=203250&dst=100011/#019750374289496275


New tax may apply to pharmaceutical companies

The Russian Ministry of Finance plans to introduce an environmental tax. The draft law “On Amending Chapters One and Two of the Russian Tax Code” is currently published at the official website of the draft legislative acts.

The document introduces the concept of “environmental tax” which is supposed to replace the levies for negative environmental impact.

According to the current version of the draft, tax exemption is available only to entities operating exclusively the facilities of the IV hazard category and provided that the facilities are duly registered in accordance with the Federal Law # 7-FZ dd. 10.01.2002 “On Environmental Protection”.

Should the law be adopted, the environmental tax will replace the levies for negative environmental impact starting from January 1, 2020, imposing additional tax burden for pharmaceutical manufacturers.

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The previous Pharma Bulletin issues are accessible our site.

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