Report from Russia - Pharmaceutical Technology

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Strengthening government control or striving for compliance with international standards?


Pharmaceutical Technology
Volume 37, Issue 4, pp. 48-50, 137

FAS against deemed violation of competition legislation

The Federal Antimonopoly Service (FAS) in association with the Ministry of Health of the Russian Federation developed in October 2012 a new draft of governmental regulations in accordance with provisions of the federal law on “allocation of orders for supply of goods, execution of works, and rendering of services for public and municipal needs” (5). These regulations (6) are designed to combat abuse arising in the course of public procurement of medicines in connection with combining several INN (international nonproprietary names) within one lot, especially for cases where the lot contains a certain drug for which exclusive vertical agreement with distributor was made. For example, the distributor may purchase the whole lot of an innovated drug for a maximum price without having any competition at all.

Advertising and other means of control

Another important issue is the advertising of medicines and medical products. Recently, this subject has been brought up for discussion during parliament hearings of the Committee on protecting the health of State Duma of the Russian Federation. Plans for implementing stringent provisions on advertising medicines have been announced more than once on the level of Russian Government and State Duma.

FAS clarified, in one of its letters issued in the summer of 2012, the current ban for advertising of prescription medicines and the respective exceptions for advertising on the Internet. Discussions are currently underway on how the advertising of medicines and medical products should become more regulated.

Conclusion

In conclusion, there is an escalation of public control and regulation affecting the pharmaceutical industry in Russia. Such escalation highlights the necessity to bring the industry to the highest international standards, regulate uncontrolled market growth, protect competition, and ensure compliance with international practice, so that the Russian market will appear favorable to foreign investors in view of the country’s WTO accession last year. However, there is concern that legislators may have missed the fact that stricter governmental control over the industry could also have a negative effect because market access will become more difficult and perhaps impossible for foreign and domestic SMEs or new market players.

References

1. Government Regulations on Decree, “On licensing pharmaceutical activity” No. 1081, Dec. 4, 2012.

2. State Duma Federal Law, “On licensing certain types of activities” FL No. 99, July 28 2012 version with amendments valid as of Jan. 1, 2013.

3. State Duma Federal Law, “On circulation of drugs” FL No. 61, June 25, 2012 version, item 6 of Art. 18.

4. State Duma Federal Law, “On fundamental healthcare principles in the Russian Federation” FL No 323, June 6, 2012 version, Art. 74.

5. State Duma Federal Law, “On allocation of orders for supply of goods, execution of works and rendering of services for public and municipal needs” FL No. 94, version of Dec. 30, 2012.

6. Ministry of Healthcare, Draft Regulations “On establishing threshold value of the initial (maximum) contract value (lot value), at the increase of which different drugs bearing INN (or in absence of INN, bearing chemical group names) cannot be subject to one contract (one lot)” as of Oct 12, 2012.


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