The Ministry of Economic development and the Ministry for Industry and trade of Russia have aligned on the draft Resolution introducing of restrictions for import of certain medical devices types into Russia.
The Restrictions will not apply to the Customs Union manufacturers and will only cover medical goods purchased for public sector.
Although the draft has been agreed upon conceptually, the list of particular types of medical devices subject to restrictions is still under consideration.
Experts have discussed the suggestions aimed at developing the competition in market segments of pharmaceuticals, medical devices and healthcare services for 2015-2016 in a joint meeting of the Expert Councils on developing the competition in social services and healthcare areas and the medical devices circulation sphere. The meeting was hosted by the Federal Antimonopoly Service.
The proposals have been prepared by the Federal Antimonopoly Service pursuant to item 5 of the List of instructions of the Government Chairman of Russia Dmitry Medvedev dd. 01.07.2014 # DM-P36-4825, based on the results of the meeting with Russian Government’s Expert Council members which took place on 23 July 2014 and was dedicated to business climate and competition development in Russia.
The key question is massive transition of medical goods manufacturers to applying special software and hardware tools aimed at limiting the use of alternative equivalent materials (reagents). As a result, the public customers have to purchase materials at overstated prices, not being able to use substitutes.
In this context, the Federal Antimonopoly Service offers to restrict the use of those special software / hardware by the medical devices manufacturers which preclude the possibility of using substitutes, by introducing the respective provisions into the draft law “On Circulation of Medical Devices”.
The experts expressed a number of objections thereto. Upon the discussion, it was suggested that all the interested participants submit their ideas and proposals on the optimal wordings of the draft law.
The Ministry of Healthcare reports on developing a departmental order “On Adoption of the Policy on the Commission of the Ministry of Healthcare Responsible for Formation of the List of Medical Devices”.
Drafting of the Policy is driven by the need to unify the approach to formation of the list of medical devices implanted into a human’s body and the list of medical devices provided per doctor prescription under the state social aid programs.
The document is supposed to be enacted on 1 October 2015.
On 27 August 2014 the Russian Newspaper published the Order of the Federal Service on Surveillance in Healthcare and Social Development (Roszdravnadzor) #2525 dd. 14.04.2014 “On Adopting the Order of Maintaining the Register of Issued Licenses for Clinical Trials of Medical Devices”.
The Register is kept in electronic form by means of adding new register records thereto, which must contain the following data:
New register records are to be added within 3 business days from the day of: the resolution on issuing the license for clinical trials of a medical device; the receipt from the licensed entity the information on commencing, ending, stopping or cancelling the clinical trial.
The Document comes into force on 7 September 2014.
The Ministry of Industry and Trade of Russia conducted public discussions of the draft order “On Organizing the Work on Validating the Intended Use of Imported Medical Equipment in the Ministry of Industry and Trade”.
The order is based on the Decree of the Board of the Eurasian Economical Commission dd. 16 July 2014 #54 “On Adopting the Unified Commodity Nomenclature of International Trade Activities of the Customs Union and the Unified Customs Tariff of the Customs Union”.
As per the explanatory note to the draft Order, import of certain goods, according to the Unified Commodity Nomenclature of International Trade Activities of the Customs Union, are subject to 0% customs duty rate, provided that the intended use of the imported medical equipment is evidenced to the customs authorities (by the document issued by the relevant executive body of the Customs Union member state, responsible for developing the policies and legal regulations of the industry).
The said types of goods are subject to the following classification as per the sub-positions of the Commodity Nomenclature of International Trade Activities of the Customs Union:
The Russian Ministry for Industry and Trade is in process of completing the list of additional preferences to be granted to the local pharmaceutical manufacturers.
A number of measures for supporting local pharmaceutical manufacturers is already set out in the Resolution prepared by the Ministry, which is already aligned with the Ministry of Healthcare and will be submitted for consideration to the Government by the end of October.
It presumes restrictions for access to procurement orders for governmental or municipal needs for those drugs which country of origin is not the Customs Union member state, provided that there are two or more state tender applicants for supply of the pharmaceutical manufactured in the said countries and registered in Russia under the same international unlicensed name.
At the same time, the preferences under the Resolution would be also available for those foreign manufacturers who have already made investments into construction of production enterprises and localizing their products manufacturing in Russia.
The corresponding Resolution of Government #830 dd. the 20 of August was signed by the Prime Minister Dmitry Medvedev.
Previously, the Ministry of Healthcare has submitted to the Russian Government the list of vitamin products registered as pharmaceuticals, for taking them out of the list of products prohibited for import in Russia from the EU, USA, Canada, Australia and Norway.
Vitamins, BAAs and their components registered under the codes of the Commodity Nomenclature of International Trade Activities of the Customs Union # 2106909200 and # 2106909809 were included into the list of food products prohibited for import by the Resolution of Government of Russia #778 dd. 07.08.2014 «On Measures for Implementation of the Decree of the President of Russia dd. 6 August #560 “On Imposing Special Economic Measures for Ensuring the Safety of the Russian Federation”.
The Resolution of the Government of Russia dd. 28.08.2014 #871 “On Adopting Rules of Forming Lists of Pharmaceuticals for Medical Use and the Minimal Assortment of Pharmaceuticals Required for Providing Medical Aid” was enacted.
The lists of the most important drugs will be formed with account to the public associations’ suggestions. In particular, the Resolution provides for the right of parties involved in circulation of pharmaceuticals, public associations operating in healthcare area, circulation of pharmaceuticals and human rights protection in these spheres to submit to the Ministry of healthcare their suggestions on formation of lists of the most important and expensive pharmaceuticals. The suggestions are to be directed annually not later than 31 of March in hard-copy and in electronic form. The lists and the minimal assortment will be formed by a special commission created by the Ministry of Healthcare. The commission will include the representatives of governmental authorities, as well of medical and pharmaceutical educational and scientific institutions. The commissions’ sessions will be transmitted at the Ministry’s official web-site.
The Resolution of the Government of Russia dd. 28.08.2014 #870 “On introduction of changes into Resolution of the Government of the Russian Federation dd. 15 September 2008 #688” enacted formal amendments to the list of goods subject to VAT at 10% rate.
The wording used in the earlier version of the Resolution # 688 and the criteria for 10% VAT rate application were aligned with Article 164 of the Russian Tax Code (as amended by the Federal Law on 25.11.2013 #317-FZ). In particular, starting from 1 January 2014 the 10% VAT rate shall be applied to pharmaceuticals having a registration certificate. This requirement is now expressly mentioned in the document.
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Prepared for you by KPMG in Russia and the CIS, Healthcare & Pharmaceuticals Sector.