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The Ministry of Healthcare distributed the letter to applicants for state registration and manufacturers of pharmaceuticals clarifying certain issues related to pharmaceuticals state registration in Russia and the Eurasian Economic Community. The clarifications are prepared further to the analysis of appeals received from individuals and companies.
In particular, the letter addresses the following issues:
The currently effective certification rules allow reduce the scope of trials for immuno-biological pharmaceuticals. According to the Letter of the Federal Accreditation Service, further to the Procedure for Certification of Products in the Russian Federation, approved by the State Standard of Russia #15 of 21 September 1994 the applicant is entitled to submit to the certification authority protocols of pharmaceutical trials conducted while developing and launching the manufacturing of new products, considering the validity periods of such protocols.
Upon examining the documents, the certification body may decide to issue the certificate of conformity or to reduce the trials scope required, or to request additional trials.
The Draft law proposes establishing a procedure of indicating the maximum retail price on the pharmaceuticals’ package. The Draft law developers note that the measure is aimed at improving the price monitoring processes and preventing unjustified price inflation.
Further, the maximum retail price is supposed to be a landmark for wholesale supplies pricing, whereas the tender winner will be the one offering the largest price decrease in comparison to the maximum retail price. Applying the maximum retail price would also be mandatory for private healthcare institutions that purchase and sell pharmaceuticals for their patients at their own expense.
The Ministry for Industry and Trade has placed for public debates the Draft Government Resolution "On Amending the Rules for Granting Subsidies from the Federal Budget to Russian Companies for Partial Cost Reimbursement for Projects on Development of Pharmaceuticals which are the Improved Analogues of Innovative Drugs and Having Similar Pharmaco-therapeutic Effect".
According to the explanatory note to the Draft Resolution, it is aimed at improving the effectiveness and harmonization of the existing subsidy mechanism.
The Draft Resolution envisages the prohibition for converting the received federal subsidy into foreign currency (to be included into the Subsidy agreement).
To align the federal budget spending for subsidies, the Draft Resolution allows companies to apply for federal subsidies not more than once per month.
Further, the Draft Resolution proposes to abolish the special procedure of subsidizing the budgetary and autonomous state institutions that are out of the competence of the Ministry for Industry and Trade.
The Ministry of Healthcare has placed for public debates a notice of developing the draft law establishing the rules for determining the interchangeability of registered pharmaceuticals for medical use.
The purpose of the initiative is to expand the provisions of the Article 27.1 of the Federal Law #61-FZ “On Circulation of Pharmaceuticals” of 12 April 2010 (as amended by the Federal Law #429-FZ of 22 December 2014) to arrangements on determining the interchangeability of registered pharmaceuticals for medical use. Currently, the article establishes parameters for determining the interchangeability based on the pharmaceuticals comparison with the reference drugs in the process of state registration.
Part 3 of Article 3 of the Law #429-FZ of 22 December 2014 “On Amendments to the Federal Law #61-FZ “On Circulation of Pharmaceuticals" provides that starting from 1 January 2018 the information on interchangeability of pharmaceuticals for medical use should be included into the State Register of Pharmaceuticals.
The document is supposed to come into force in June 2016.
The Federal Anti-Monopoly Service considers that the abusing the dominant position by a proprietor results in price inflation and creates the risk of shortage of ED supplies to the Russian market.
Currently, the Federal Anti-Monopoly Service is working on amendments to the Federal Law # 135 "On Protection of Fair Competition ", which provide for abolition of anti-trust immunity for manufacturers of patented pharmaceuticals.
The Ministry for Industry and Trade approved templates of application forms for issuing resolutions on GMP compliance by pharmaceuticals manufacturers (foreign manufacturers), the GMP audit report and the resolution on GMP compliance. The corresponding Order #261 of 04 February 2016 was registered with the Ministry of Justice on 9 March 2016.
The resolution on GMP compliance by a pharmaceutical manufacturer consists of two sections and should be issued on a letterhead having the “B” level security protection. The resolutions issued before the Order enactment should be valid for the corresponding period specified therein.
The Ministry for Economic Development, the Ministry for Industry and Trade, the Ministry of Healthcare and the Federal Anti-Monopoly Service have expressed their official position on regulatory enforcement of the Government Resolution Decree #1289 of 30 November 2015 (commonly called “three is a crowd rule”).
According to the legislators, should two bids for supply of pharmaceuticals originating from the Eurasian Economic Community (EEC) and having the CT1 certificate be submitted, any bids for supply of foreign pharmaceuticals, as well as the bids for supply of EEC-origin pharmaceuticals without the CT1 certificate, shall be rejected.
Should there be two bids for supply of pharmaceuticals originating from EEC without a CT1 certificate, the “three is a crowd” rule shall not be applied; in such a case, bids for supply of foreign-origin pharmaceuticals and EEC-origin pharmaceuticals without the CT1 certificate may not be rejected.
A bid that includes several trade names of pharmaceuticals corresponding to the same INN, where at least one trade name relates to a foreign-origin pharmaceutical, qualifies for a bid for supply of foreign-origin pharmaceutical.
The Moscow Government Resolution #117-PP of 29 March, 2016 set the starting (maximum) contract price (lot price) for supply of pharmaceuticals included in the Essential Drugs List for the needs of the city of Moscow, at RUB 10 MM (~ Euro 131K).
The starting price level is set for the purposes of substantiating the deprivation of the tender participant from the participation in the state procurement or resigning from entering into the supply contract with the tender winner at any time prior to the contract conclusion.
The Russian Government has submitted to the State Duma the draft law providing for VAT exemption for raw materials and components intended for medical devices manufacturing. The corresponding Decree #349-r was signed by the Prime Minister Dmitry Medvedev on March 1, 2016.
The Draft law proposes to exempt from VAT the raw materials and components imported into Russia for manufacturing of medical devices listed in subparagraph 1 of paragraph 2 of Article 149 of the Russian Tax Code and having no analogues manufactured in Russia.
Subparagraph 1 of paragraph 2 of Article 149 of the Russian Tax Code provides for VAT exemption for domestic sale of medical devices included into the list approved by the Government (the currently effective list is set out in the Government Resolution #1042 of September 30, 2015).
The Draft Law states that the VAT exemption should be available provided that the declarant submits to the customs authorities the document issued by the Ministry for Industry and Trade and confirming the intended use of the raw materials and components and the absence of their analogues manufactured in Russia. Should the items be imported from the Eurasian Economic Community, the said document should be submitted to the tax authority.
On March 14, 2016 the Supervisory Board of the Russian Industrial Development Fund (IDF) affiliated with the Ministry for Industry and Trade approved new programs envisaging loans at 5% p.a. for the Russian companies realizing the ‘import substitution’ projects.
According to the new program:
In addition, changes are introduced to the "Consortium Projects" program, fixing the minimum co-financing by a consortium at 70% of the project cost.
The previous Pharma Bulletin issues are accessible our site.
Prepared for you by KPMG in Russia and the CIS, Healthcare & Pharmaceuticals Sector.
© 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.