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The State Duma deputies are developing a draft law aimed at reducing the number of distribution entities involved in the supply chain between the manufacturer and the pharmacy, to a minimum number of parties.
In particular, it is suggested to prohibit manufacturers to have their own logistic companies. As per the deputies’ opinion, such companies are often loss-making and receive reimbursement from pharma producers, which leads to increase of ex-factory prices for drugs.
Thus, in order to keep prices for pharmaceuticals unaffected by logistic costs, it is suggested that transportation services should be rendered solely by specialized companies.
At the same time, registration of prices for 40 pharmaceuticals was rejected by the state authorities. Key reasons for the refusals included, inter alia, exceeding the historical average-weighted import prices for the reporting period or exceeding the maximum registered prices for comparable drugs.
The information about the newly registered prices is published by the Ministry daily at the web-site: http://grls.rosminzdrav.ru/.
As per the law, the regional authorities establish wholesale and retail trade mark-ups for at least 1 year and are entitled to reconsider these mark-ups in case of changes potentially impacting the finance position of wholesale distributors and pharmacy chains.
However, the state authorities of Vladimir, Nizhny Novgorod, Novosibirsk, Rostov and Tomsk regions as well as the Republics of Bashkiriya, Tatarstan and Chuvashia have already announced their intention to keep the trade mark-ups at the level of 2011 so far.
As per various published estimates, the share of Russian pharmaceuticals in the market increased from 20 to 23% – or from 23 to 26-27%, if including the drugs which are produced abroad but packaged in Russia.
The experts notice some other changes in the market: more and more foreign producers start localizing the full-scale manufacturing. The regional authorities also welcome creation of new pharmaceutical plants oriented at the products to be purchased under state tenders.
The said trend goes in line with the goal announced by the President in his message to the Federal Council of the Russia: to increase the share of locally produced pharmaceuticals up to 50% of the market and the share of innovative drugs – up to 60%.
However, as per the experts, real breakthrough in replacing the imported pharmaceuticals by local products is not to be expected earlier than in 2014.
© 2017 KPMG Audit LLC, the Mongolian member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.