The Federal Law "On the Fundamentals of Health Protection in the Russian Federation" dated 21.11.2011 № 323-FZ (hereinafter - the "Law" or the "Law on the Fundamentals of Health Protection in the Russian Federation") is signed by President Medvedev. Certain provisions will become applicable from the date of its official publication, while the other provisions will become applicable on or after 1 January 20121. Among the large number of legal innovations, we note seven which, in our opinion, are significant for the legal regulation of the medical area and pharmaceutical business: (1) new rules for medical products turnover; (2) definition of orphan diseases and public funding of treatment; (3) restricting contacts between medical professionals and representatives of pharmaceutical companies; (4) remuneration under civil law agreements between companies and physicians; (5) new licencing specifics; (6) personal data of physicians and patients; and (7) the definition of "medical professional" and "pharmaceutical professional".
- New rules for medical products turnover
Article 38 of the Law introduces into Russian legislation the long-awaited definition of a medical product. This includes any tools, apparatuses, devices, materials and other products used alone or in combination, including together with any other accessories, including special software required to use these products for the purpose intended by the manufacturer for the prevention, diagnosis, treatment of diseases, post-disease rehabilitation, health monitoring, medical research, restoration, replacement, modification of an organism's anatomical structure or physiological functions, pregnancy prevention or interruption, that do not achieve its principal intended action in or on the human body by pharmacological, immunological, genetic or metabolic means, but which may be assisted in its function by such means.
It is important that the concept of a medical product includes the software required for its application. Hence, drivers, programs or flash cards required to install and support the operation of high-tech medical equipment are now recognised as its part, including in terms of financial and tax accounting (earlier this issue was questionable).
At the same time, uncertainty remains as to the correlation between the two concepts being the sorts of a medical product - "medical equipment" and "healthcare products"2. However, the legislation envisages no criteria for classifying a medical product as the first or second category. As a rule, this fact is established on the basis of records in the registration certificate of a medical product that is entered by officers of the Federal Service for the Supervision of Public Health and Social Development (Roszdravnadzor) without any statutory criteria for classification. However, this issue is often of fundamental importance for manufacturers and distributors. For example, vital and essential medical equipment are not subject to value added tax, and healthcare products are VATable at a discounted rate of 10%3. The products that a pharmacy organisation has the right to sell also include only healthcare products, rather than medical equipment4.
While generally improving the regulation of medical products turnover, the Law does not resolve this problem.
The Law allows only the turnover of medical products registered by Roszdravnadzor5. In order to have medical products registered, those must be evaluated for compliance with the law in the form of technical examinations, toxicological tests, clinical tests and expert examination of the quality, efficiency and safety of such medical products, as well as tests to determine the type of measuring devices6. The latter apparently includes metrological examination of medical measuring devices with results of such examination confirmed by a certificate issued by the Federal Agency on Technical Regulation and Metrology.
The Law imposes government control over the turnover of registered medical products. The control will be in the form of government inspections of compliance with the rules governing the production, sale, servicing and storage of medical products, safety monitoring, and certain other measures, as well as requires all those involved in the turnover of medical products to report all cases of unwanted sequela and side effects that are not listed in instructions for use (manuals)7.
- Definition of orphan diseases and public funding of treatment
The term "orphan disease" has been used for a long time, but has not been legislated, being partially replaced with the other, often lengthy definitions such as "limited number of patients with rare and/or the particularly severe pathology."8However, no criteria for classifying a disease as such pathology have been envisaged by Federal Law No. 61-FZ dated 12 April 2011 "On the Turnover of Medicines" and subordinate legislation adopted in its pursuance.
From 1 January 2012, orphan diseases will be recognised as diseases that account for up to 10 cases per 100,000 people, and the list of such diseases will be determined by the Ministry of Health on the basis of statistics and posted on its official website9.
The Law establishes rules for the public funding of orphan disease treatment. Funds to purchase medicine (on the list approved by the Government) for treatment of malignant neoplasms of lymphoid, haematopoietic and related tissues, hemophilia, cystic fibrosis, pituitary dwarfism, Gaucher disease, multiple sclerosis, as well as to help recipients after transplantation, will be allocated from the federal budget10. The treatment of all other orphan diseases will be subsidised from the budgets of the constituent entities of the Russian Federation11.
- Restricting contacts between medical professionals and representatives of pharmaceutical companies
Article 74 of the Law imposes certain restrictions on contacts and relationships between medical professionals and representatives of pharmaceutical companies. Most of the restrictions had been pending since 2009, but were postponed.
Effective from 1 January 2012, the following restrictions will apply to the medical professionals: prohibition to accept gifts, monetary rewards from pharmaceutical companies; obligation to inform a patient about the availability of less expensive medicines similar to those prescribed, prohibition to accept medicine and healthcare product samples from representatives of pharmaceutical companies for further distribution of such samples among patients, etc. When prescribing a medicine, doctors may not use preprinted prescription forms containing the name of a medicine12.
Finally, a medical professional may not to receive representatives of pharmaceutical companies in his/her office during working hours, unless they meet in connection with (1) clinical research and clinical testing; (2) the professional development of a medical professional as provided for by the administration of the medical organisation; and (3) the provision of information about unexpected side effects and adverse medicine or healthcare product response13. Taking into consideration the interest of both parties (the pharmaceutical companies and medical community) to continue legally the dialogue and exchange of information on the latest medicines and treatments, the key forms of their further communication in compliance with the requirements of the Law looks as follows:
- use the "professional development of medical professionals" option,
- use the fact that the above restrictions apply only to "reception" by a medical professional of a pharmaceutical company's representative.
In the case of the professional development of medical professionals to organise their meetings with representatives of pharmaceutical companies (for example, in the format of a seminar on the latest medicine), it will be necessary for a medical organisation to have an internal regulation in place (signed by the head) determining the procedure for reception of companies' representatives for such purposes. The document may be titled, for example, "Regulation on activities aimed at improving the professional level of employees and reception of pharmaceutical companies' representatives, manufacturers and sellers of diagnostic equipment in connection with such activities". After that, upon agreement with management of a medical organisation, a pharmaceutical company will be able to arrange such a seminar in accordance with the above internal regulation.
As regards the prohibition of "reception" (i.e., reception of patients by medical professional in the workplace), a meeting may be arranged at a public event, during a lunch break outside of the medical organisation, etc. In addition, it is important to note that in contrast to the first draft of the Law, medical professionals are not prohibited from attending conferences and other events organised by a pharmaceutical company or a seller of medical equipment, unless it is an entertainment event.14
Thus, the Law complicates dialogue between pharmaceutical companies and physicians. Consequently pharmaceutical companies may have to revise their existing marketing strategies to some extent.
- Remuneration under civil law agreements between companies and physicians
Despite the prohibition to accept monetary rewards from the pharmaceutical business, pursuant to Article 74 § 1 of the Law, medical professionals still have the right to receive remuneration under agreements with pharmaceutical companies, manufacturers and sellers of medical products, pharmacy organisations, if such agreements relate to:
- conducting clinical trials of medicines;
- conducting clinical tests of medical devices;
- educational activities of a medical professional; and
- scientific work of a medical professional.
Though the list is exhaustive, it provides ample opportunities for physicians to have paid work under agreements between companies and physicians. For example, in carrying out "scientific work of a medical professional" one should refer to the provisions of the Law defining the scientific work as "activities aimed at the generation and application of new knowledge", including both fundamental and applied research.15 It is clear that such a broad definition covers a fairly wide range of issues that pharmaceutical companies, as clients, may be interested in having them studied (e.g., systemising data on patients suffering certain diseases, arranging surveys among patients and analysing the findings of such surveys, etc.). And if services provided by a medical professional in this regard meet the scientific work criteria determined by the Law, the remuneration for such services would be lawful.
The Law introduces an ambiguous and largely disputed provision that allows physicians to obtain remuneration in connection with clinical trials of medicines. The wording used in the Law may be construed by a reader as the possibility for a physician (principal researcher) to enter into an agreement for clinical trial with a sponsor. However, pursuant to Article 41 of the Law on medicines turnover, an agreement for a clinical trial may be entered into by an organisation authorised to conduct the clinical trial and a medical organisation.16 The Law does not provide any possibility that such an agreement may be concluded with a principal researcher.
The introduction of the above provision triggered the views that direct agreements for clinical trials between sponsors and principal researchers (or trilateral agreements between a sponsor, medical institution and principal researcher) will become lawful once the Law comes into force, regardless of the restrictions provided for by Article 41 of the Law on medicines turnover. We do not agree with such views and do not recommend concluding agreements for clinical trials directly with principal researchers. In our opinion, the provision of the Law that permits physicians to receive remuneration under agreements for clinical trials refers to Article 41.2.2. of the Law on medicines turnover, under which an agreement for clinical trials shall specify the amounts "payable to the principal researcher and co-researchers". That is, Article 74 of the Law on the fundamentals of health protection confirms the fact that medical professionals participating in a clinical trial are entitled to remuneration for their participation in the trial. However, such remuneration shall be payable in accordance with the agreement between the sponsor and medical organisation and in the amount specified in such an agreement (rather than in a separate agreement between the sponsor and the physician). Thus, the right to receive remuneration for participation in clinical trials (on behalf of the medical institution) does not constitute the possibility for principal researchers to enter into separate agreements with the organisers.
At the same time, one may come to the conclusion that principal researchers may enter into agreements for clinical trials on medical devices, as provisions of the Law on medicines turnover do not apply to medical devices, and the Law on the fundamentals of health protection does not contain specific requirements to the subject content of an agreement for clinical trial on medical devices.
- New licencing specifics
Pharmaceutical activities and activities in connection with the turnover of narcotic drugs, psychotropic substances and other precursors, cultivation of plants containing narcotic substances are subject to licensing with the local authorities of the constituent entities of the Russian Federation.17 The Federal Executive Body is responsible for maintaining the uniform register of issued licenses.18
- Personal data of physicians and patients
Articles 92-94 of the Law require that data on persons providing and receiving medical services be recorded in the personal data systems. New rules provide for the processing of a significant amount of personal data of physicians and patients (including place of residence and passport details) in the information systems that are operated by the competent federal executive body, competent governmental authorities of the constituent entities of the Russian Federation, organisations appointed by the said authorities, and the main administration of the Federal Fund of Obligatory Medical Insurance and Territorial Fund of Obligatory Medical Insurance.19 It seems reasonable that under Article 14 of the Federal Law "On Personal Data", a patient should have access to his/her personal data contained in such systems, including information about his/her history and diagnosis.20
- Definition of "medical professional" and "pharmaceutical professional"
The Law introduces the definitions of "medical professional" and "pharmaceutical professional".
Despite the fact that the concept of "medical professional" is often used in legislation (including in the Labour Code where medical professionals' work is regulated by a separate article), the statutory definition of this category of persons was missing.
A medical professional is a person with a medical or other education, working in a medical organisation, whose functional duties include performing medical activities.21 It is important to note that the definition limits the category of medical professionals to persons directly involved in providing healthcare (as defined in Articles 32-36 of the Law), conducting medical examinations and other types of medical activities i.e. physicians, nurses, medical assistants. Thus, the definition does not create ambiguity as to whether an accountant or, for example, a watchman working at the hospital, i.e. formally employed by the medical organisation, should be recognised as a medical professional or not (and it is reasonable not to recognise them as such).
A pharmaceutical professional is a person with a pharmaceutical education, working in a pharmaceutical organisation, whose functional duties include wholesale trade in, storing, transporting of pharmaceuticals and/or retail trade in, manufacturing, dispatching, storing and transporting of pharmaceuticals. Unlike a medical professional, a pharmaceutical professional must have a pharmaceutical education to be recognised as such.