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The Ministry for Economic Development prepared a draft order "On conditions for admitting goods of foreign origin to placing orders for goods supplies for customers needs". Also, the Russian Government is working on a draft Resolution "On additional requirements to placing orders for pharmaceuticals supplies".
According to these documents, foreign pharmaceuticals producers would not be allowed to participate in state tenders in case of offering products which have analogues already registered in the Russian Register of pharmaceuticals. Particularly, minimum two analogues manufactured in Russia should be contained in the Register.
It is also planned to reconsider conditions for qualifying a pharmaceutical as produced in Russia. Nowadays, Russian manufacturing activities of most of the foreign companies are limited to packaging the drugs produced abroad. It is proposed to retain such approach till 1 January 2014, and afterwards only the pharmaceuticals produced in Russia from “zero” cycle would be treated as locally manufactured ones (except for pharmaceutical substances).
The guidelines stipulate:
According to Roszdravnadzor’s official letter dd. 9 January 2013 # 04и-2/13, if the documents for state registration of medical goods were submitted before 1 January 2013, it is necessary to submit to Roszdravnadzor an application according to the new Guidelines as soon as possible, in order to register these medical goods.
The Letter is accompanied by the forms of application for state registration and for introducing amendments into the registration certificate.
The document stipulates rules for monitoring the safety of medical goods circulating in Russia for the purposes of detecting and preventing side effects which are not mentioned in the user manual for these medical goods, adverse reactions during use of the goods, specifics of different medical goods compatibility, the facts and circumstances endangering the life and health of citizens and medical professionals in course of using the medical goods.
The monitoring will be carried out by Roszdravnadzor and its territorial subdivisions, based on reports and claims from individuals or legal entities and on the information obtained during the state control over the medical goods circulation.
In addition, Roszdravnadzor issued Letters dd. 28.12.2012 # 04I-1308/12 "On the procedure of monitoring the medical goods safety for healthcare organizations” and dd. 28.12.2012 N 04И-1311/12 “Оn the Order for monitoring medical goods safety for manufacturers”.
The President of Russia Vladimir Putin signed the Federal Law # 262-FZ dd. 25.12.2012 "On amendments to the Federal Law "On Circulation medicaments", which stipulates maintaining item-quantitative accounting of pharmaceuticals (please also refer to KPMG Pharma-Bulletin, issues 26, 27).
In particular, the maximum producers’ price for a ED product could be re-registered with adjustment by the forecasted inflation rate for the current calendar year, provided that the actual average sales price for the product during the period upon the last price registration (re-registration) date differed from the registered price by not more than the forecasted inflation rate set for the current financial year.
The Federal Law dd. 03.12.2012 # 216-FZ "On the Federal Budget for 2013 and the planning period 2014 and 2015" stipulated theinflation rate not exceeding 5.5%.
Also the maximum producers’ price could be re-registered in case of increase in:
The increase of the registered maximum producer’s price should not exceed the forecasted inflation rate for the current year (i.e. 5.5%).
Further to the conference chaired by the Prime Minister of Russia D.A. Medvedev, the Minister for Healthcare and Social Development of Russia Veronika Skvortsova reported that the Strategy for public pharmaceutical support in Russia till 2025 is generally approved.
The aim of the Strategy is to increase the availability of high-quality, efficient and safe pharmaceuticals meeting the demands of the citizens and the healthcare system.
In particular, the Strategy provides for improving the state pricing regulations for pharmaceuticals under state guarantees: namely, transition from the existing state pricing regulation for essentials (registration of maximum producers’ prices) to shaping the optimal system of reference pricing. Elaborating and selecting the optimal reference pricing model is planned for 2015-2016.
The Strategy for developing medical science in Russia for the period till 2025 was adopted by the Government of Russia Resolution dd. 28.12.2012 # 2580-p.
The strategy is aimed at implementing the state policy in healthcare, improving the quality and accessibility of public medical aid, including developing innovative products,deveoping important technologies and competencies.
Financial support of the activities under the Strategy from the federal budget is to be provided within the state programs of Russia "Development of healthcare" for 2013-2020, "Development of education" for 2013-2020, "Development of science and technology" and "Development of pharmaceutical and medical Industry" for 2013-2020.
Association of Russian Pharmaceutical Producers applied to the Prime-Minister of Russia Dmitry Medvedev for bringing the Government’s Resolution dd. 15.09.2008 # 688 "On adopting the list of codes for medical goods subject to 10% VAT rate " in linewith the Russian Tax Code and the Federal Law dd. 12.04.2010 # 61-FZ "On circulation of pharmaceuticals".
Pharmaceutical companies are encountering the iconsistency between the federal and inferior legislative acts in course of confirming the state registration of pharmaceuticals and selling pharmaceutical substances.
In particular, the Government’s Resolution # 688 stipulates that sales of Russian- and foreign-manufactured pharmaceuticals (including pharmaceutical substances) are subject to the reduced VAT rate of 10% if the products are duly registered with the state authorities (with the registration certificate in place).
Therefore, the pharmaceuticals which are in the process of state registration being confirmed (due to expiration of the earlier issued registration certificates) have to be taxed at 18% VAT rate during all the stages of sale (import, distribution, retail trade) until the new registration certificate (with unlimited validity period) is obtained. At the same time, as per the Federal Law # 61-FZ, the subject pharmaceuticals continue to be listed in the State register of pharmaceuticals, unless excluded by the decision of the Ministry for Healthcare and Social Development.
In addition, pursuant to the Federal Law # 61-FZ, pharmaceutical substances are not subject to the state registration. However, from the Government’s Regulation #688 it follows that VAT rate of 10% could be applied to pharmaceutical substances only if there is a registration certificate (though its issuance is not required by the Federal Law # 61-FZ).
In its application, the Association of Russian Pharmaceutical Producers requests to amend the Regulation # 688 so that the existing contradiction with the federal law is eliminated.
The Ministry for Healthcare and Social Development proposes to amend the Russian Tax Code. According to Elena Maksimkina, the Head of the Department for state regulation of pharmaceutical circulation in the Ministry for Healthcare and Social Development, if re-registration of a pharmaceutical product is driven by changes which do not entail expert examination (such as change of legal address, minor changes in the manufacturer data), the amount of the stamp duty should be about RUB 5’000. Currently, the stamp duty for expert examination comprises RUB 50’000.
At the moment of registration, the members of Association were represented by OAO “Pharmstandart-UfaVITA”, OAO “Pharmstandart-Leksredstva”, TOO “VEROPHARM” (Kazakhstan), TOO “KFK” (Kazakhstan).
The Association’s goal is coordinating the business activities of its members – EEC pharmaceutical producers, as well as protecting and representing their joint property interests in international organizations, before state authorities and other non-state institutions and organizations.
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