1. Entry into force of the set of amendments to the Federal Law on the Circulation of Medicines that were approved in December 2014

Federal Law No. 429-FZ of December 22, 2014 on Amendments to the Federal Law on the Circulation of Medicines introduced substantial amendments to Federal Law No. 61-FZ on the Circulation of Medicines of April 12, 2010 (the Law on the Circulation of Medicines).

Most of those amendments entered into force on July 1, 2015. Here are some examples:

  • The introduction of pharmacovigilance, i.e. monitoring of the efficacy and safety of pharmaceuticals, and the related obligations of the authorities and pharmaceutical entities.
  • Clarification of the categories of medicinal products not subject to registration and of the procedure for the competent authority to advise on registration matters.
  • The federal authorities have been empowered to inspect pharmaceutical companies for compliance with the requirements of good manufacturing practice (GMP) and to issue opinions on such compliance. The procedures for those activities of the state authorities were defined by RF Government Resolution No. 1314 of December 3, 2015 on Determining Compliance of Pharmaceutical Manufacturers with the Requirements of Good Manufacturing Practice. In the Russian Federation, GMP standards were approved by Order No. 916 of the RF Ministry of Industry and Trade on Approval of the Rules for the organization of the manufacture and quality control of medicines of June 14, 2013.

The Russian Federation Ministry of Health was also empowered to approve rules for good laboratory, clinical, manufacturing and other practices. Work on drafting the relevant orders was carried out throughout 2015 and a number of draft orders were published, although were not yet officially issued.

New terms were introduced to the Law on the Circulation of Medicines, such as “orphan drugs,” “generic drug,” “reference drug,” “interchangeable medicine” and others, laying the foundations for newly introduced norms and those that are in the process of being introduced.

Another set of amendments to the Law on the Circulation of Medicines approved by the above-mentioned Federal Law No. 429-FZ entered into force on January 1, 2016:

  • The powers of the federal executive authorities to inspect and audit the compliance with rules of good laboratory, clinical and other practice (other than manufacturing practice) were strengthened.
  • When filing an application for state registration of a pharmaceutical for medical use, the registration dossier is now submitted in the form of a single technical document consisting of several sections: documentation of an administrative nature, chemical, pharmaceutical and biological documentation, pharmacological and toxicological documentation, and clinical documentation (the requirements to the sections are detailed in the law). In addition, it is clarified that the applicant shall submit separate applications and a dossier for each medicinal form for expert review of different medicinal forms of the same pharmaceutical for medical use.
  • The cases when changes can be made to documents contained in the registration dossier that require the conduct of an expert review of medicines to verify the quality and/or risk to benefit ratio of the pharmaceutical were clarified. The procedure for expert review of the quality of a pharmaceutical substance manufactured for sale was also elaborated in detail.

The last part of the novelties, which concerns the registration dossier of a drug for veterinary use, the procedure for confirming the state registration of a drug and the procedure for amending documents contained in the registration dossier for a registered medicine and approved by Federal Law No. 429-FZ, will enter into force on January 1, 2017.

2. Other amendments in the Law on the Circulation of Medicines

The Law on the Circulation of Medicines was also amended several times in the course of 2015, most significantly by Federal Law No. 241-FZ on Amendments to the Federal Law on the Circulation of Medicines.

In particular, the set of documents required to confirm state registration of a pharmaceutical for medical use (upon expiration of the initial 5-year registration) was clarified. Notably, at present a document confirming compliance with good manufacturing practice (GMP) issued by a competent body of the manufacturer’s country is required to confirm state registration of a medicine.

The powers and mode of interaction of the authorities, the principles for calculating maximum manufacturer’s sale prices for vital and essential medicines (Essential Medicines) and the sequence of actions to be taken when irregularities are discovered in the clinical trial of a drug, etc., were clarified.

3. Restriction on state procurement of imported medical devices

February 2015 saw the adoption of RF Government Resolution No. 102 of February 5, 2015 on Restricting the Admission of Certain Types of Medical Devices Originating in Foreign States for the Purposes of Procurement for State and Municipal Needs (“Resolution 102”).  According to Resolution 102, state procurement bids for the supply of medical devices of foreign origin (other than those manufactured in Belarus, Kazakhstan and Armenia) are to be rejected in principle if at least two bids meeting the requirements for supply of such devices whose country of origin is Russia, Belarus, Kazakhstan or Armenia have been submitted.

The restriction applies to the medical devices listed in the annex to Resolution 102. The list includes such devices as glucose meters, electrocardiographs, mammography machines, medical wear, etc.

The restrictions do not apply:

  •  if notices of procurement of medical devices were published or invitations to participate in identifying a supplier were sent before the resolution entered into force; and
  • in the procurement of medicines by Russian state customers operating in a foreign state, in order to support their activities in that state.

In practice, Resolution 102 immediately prompted a number of questions from many pharmaceutical manufacturers. For example, it is unclear whether its provisions apply to disposable materials (supplies) for such medical devices if these materials are not specifically listed in Resolution 102.

In the summer of 2015 the RF Ministry of Industry and Trade prepared a draft RF Government Resolution amending Resolution 102, in which it was proposed to considerably expand the list of medical devices (and supplies for them) covered by the restrictions. However, as at the end of 2015 the said draft had not been adopted.

4. Restriction on state procurement of imported medicines

Similarly to Resolution 102 mentioned in clause 3 above, the RF Government Resolution No. 1289 of November 30, 2015 on Restrictions and Conditions for Admission of Medicines on the List of Vital and Essential Medicines Originating in Foreign States for the Purposes of Procurement for State and Municipal Needs introduced alike restrictions with respect to Essential Medicines if bids to supply Essential Medicines originating in a member state of the Eurasian Economic Union (hereinafter the EAEU) were filed.

The restrictions do not apply:

  •  until December 31, 2016 in state procurement of Essential Medicines originating from foreign states (except for EAEU member states) for which only primary and secondary packaging, or secondary packaging of medicines is done on the territories of EAEU member states with release quality control.

The restrictions also do not apply in cases similar to the exceptions for restricting procurement of medical devices (see clause 3 above).

5. Amendments in Essential Medicines pricing procedure

Prices for Essential Medicines  rose sharply at the end of 2014 and in early 2015 in connection with the fall of the ruble exchange rate.  Reacting to the situation on the market, the Federal Antimonopoly Service of Russia (FAS) tightened control over pricing and carried out numerous audits.  In addition, the corresponding measures were taken at the regional level: for example, Moscow Government Resolution No. 134-PP of March 24, 2015 granted the Moscow Department of Health the right to initiate and examine cases of administrative offenses in Essential Medicines pricing.

RF Government Resolution No. 434 on Regional State Control over the Application of Prices for Medicines on the List of Essential Medicines was enacted on May 6, 2015 (“Resolution 434”). According to Resolution 434, the relevant competent executive authorities of Russian regions (primarily the Roszdravnadzor authorities) monitor prices of Essential Medicines by:

  • organizing and conducting audits of the monitored entity's compliance with mandatory requirements;
  • systematically observing the performance of mandatory requirements by a monitored entity;
  • taking steps, according to the procedure of Russian Federation law, to stop discovered violations of mandatory requirements and/or remedy the consequences of such violations, issue directives to remedy discovered violations of mandatory requirements and take steps to prosecute the offenders.

In addition, RF Government Resolution No. 979 of September 15, 2015 approved amended and restated versions of:

  • the Rules for the state registration and re-registration of maximum sale prices for Essential Medicines set by pharmaceutical manufacturers; and
  • the Methodology for calculating maximum sale prices for Essential Medicines set by pharmaceutical manufacturers.

The new versions of the above-mentioned Rules and Methodology detail many issues related to the calculation of the maximum manufacturer’s sale price and the grounds for changing it. Provisions on regulating prices for Essential Medicines manufactured in EAEU member states and for Essential Medicines of foreign origin are separate. For the purposes of some of the provisions, separate regulation is also aimed at pharmaceutical manufacturers within a specific price segment or manufacturers intending to package medicines in the Russian Federation, etc.

6. Approval of a procedure for determining interchangeability of pharmaceuticals

RF Government Resolution No. 1154 on the Procedure for Determining Interchangeability of Pharmaceuticals for Medical Use of October 28, 2015 approved the Rules for determining the interchangeability of pharmaceuticals for medical use.

According to those Rules, the interchangeability of a pharmaceutical for medical use (the medicine) is determined during the process of its state registration on the basis of comparison with a reference drug according to the parameters listed in the Law on the Circulation of Medicines, in the course of an expert examination of the medicine to verify the quality and/or risk to benefit ratio.  Holders or owners of registration certificates for medicines that have already been registered may file applications to determine the interchangeability of medicines in the form of amending documents in the medicine's registration dossier by December 31, 2016.  The process of determining interchangeability for such medicines will last until December 31, 2017 because information about interchangeability of medicines should be included in the state medicines register as of January 1, 2018.  It is not permitted to use the results of the determination of interchangeability of medicines before that date.

The main stated objective of introducing the special concept of the interchangeability of medicines was the need to protect competition during state procurement and to protect the interests of consumers by ensuring their ability to purchase medicines that are identical in terms of quality and therapeutic effect but at advantageous prices. FAS will likely use such a definition of interchangeability for the purpose of determining product market ranges.

7. State regulation of prices for medical devices implantable in the human body when providing health care as part of the state’s guaranteed free health care program for citizens

The list of medical devices implantable in the human body when providing health care as part of the state’s guaranteed free health care program for citizens (implantable devices) was approved by RF Government Order No. 2762-r of December 29, 2014. It includes prostheses, bone staples, stents, etc.

According to RF Government Resolution No. 1517 on State Regulation of Prices for Medical Devices on the List of Medical Devices Implantable in the Human Body when Providing Health Care as Part of the State’s Guaranteed Free Health Care Program for Citizens of December 30, 2015, the maximum manufacturer’s prices for implantable medical devices and the maximum wholesale markups on actual manufacturer’s prices for those medical devices are to be calculated in accordance with the methodology approved by that Resolution.  In addition, the maximum manufacturer’s prices for implantable devices are also to be registered and tracked in the appropriate state register.  The rules for state registration of maximum manufacturer’s prices for implantable medical devices and the rules for keeping the state register of maximum manufacturer’s prices for implantable medical devices were also approved by that Resolution.

8. FAS’ recommendations for entities holding a dominant position on pharmaceuticals and medical devices markets to develop and apply commercial policies

On June 30, 2015 FAS published  recommendations for entities holding a dominant position on pharmaceuticals markets and medical devices markets (hereinafter together pharmaceutical companies) to develop and apply respective commercial policies (the Recommendations). Considering that companies selling original drugs that have no analogues in practically all cases will be considered monopolists on the market for that particular drug, it is obvious that many, if not most pharmaceutical companies should pay attention to the Recommendations. 

The Recommendations strongly urge pharmaceutical companies to openly, objectively and reasonably select their counterparties and establish a transparent and clear system of discounts, bonuses and other economic benefits for them. The Recommendations:

  • propose that pharmaceutical companies adopt a detailed commercial policy that, inter alia, must contain criteria for selecting their counterparties, a draft standard contract with the counterparty containing all of its material terms, and the form of the new counterparty application; 
  • contain an inexhaustive list of objective criteria for selecting counterparties  as an example;
  • strongly recommend that pharmaceutical companies describe the process of selecting their counterparties in their commercial policy in detail, including technical details (application review periods, officers involved, etc.);
  • allow pharmaceutical companies to use different commercial terms (financial benefits) (discounts, bonuses) for different counterparties, but only provided that this difference in the terms offered is economically justified;
  • recommend to include in the commercial policy a detailed description of the grounds and procedure for the pharmaceutical company ceasing operations with a counterparty; and
  • contain other provisions indicating FAS’ position on various aspects of a dominant market position.

Formally, failure to comply with the Recommendations should not give rise to any liability. However, it is obvious that the Recommendations reflect the official position of FAS as to the interpretation of the relevant actions of pharmaceutical companies on issues that arise most often in their business operations. Thus, compliance with the Recommendations may considerably reduce the risk of pharmaceutical companies being held liable for violation of Russian antimonopoly law.

9. News of the EAEU supranational pharmaceuticals market

A common EAEU pharmaceuticals market is being created within the framework of the globalization of markets of the EAEU countries in accordance with the Treaty on the Common Principles and Rules of Circulation of Medicines in the Eurasian Economic Union of December 23, 2014.

In order for the common market to function successfully it is necessary to adopt a number of regulations that will unite often diverging rules of EAEU member states. For example, the working group of the Eurasian Economic Commission for forming common approaches to the regulation of the circulation of medicines in the EAEU has developed a draft of the Rules for the registration and expert review of medicines for medical use (the Registration and Expert Review Rules). The Registration and Expert Review Rules contain detailed requirements for filing applications to register medicines, to the format and content of the registration dossier for various groups of medicines (including common medicinal, biological and homeopathic drugs, herbal preparations, preparations with a well studied experience of usage, blood products and others).  However, the Registration and Expert Review Rules had not yet been approved by the date of this overview.

In addition, Decision No. 178 of the Council of the Eurasian Economic Commission of December 29, 2015 adopted the Rules for determining categories of over the counter (OTC) pharmaceuticals and prescription (Rx) drugs (the Rules for Selling Pharmaceuticals). The Rules for Selling Pharmaceuticals apply to pharmaceuticals registered in EAEU member states in accordance with the above-mentioned Registration and Expert Review Rules.  However, for as long as the latter are not approved, the Rules for Selling Pharmaceuticals shall not apply.

A drug is assigned to a particular category (OTC or Rx, as the case may be) at the time of its registration, and also when the registration (re-registration) is confirmed.  Drugs should be classed as prescription (Rx) drugs if they:

  • are capable of directly or indirectly harming a person’s health if incorrectly used, or when correctly used but without medical supervision;
  • contain substances or compounds the effect of which and/or the adverse reactions to which have not been sufficiently studied; and
  • are administered parenterally (as a rule).

10. Amendments to the Federal Law on Veterinary Medicine

Federal Law No. 243-FZ on Amendments to the Law of the Russian Federation on Veterinary Medicine and Certain Legislative Acts of the Russian Federation of July 13, 2015 made certain amendments to the legislation. For example, it is planned:

  • that the Russian Federation Ministry of Agriculture (the Agriculture Ministry) will adopt veterinary rules governing all areas of veterinary medicine and various types of veterinary activity;
  • to create the Federal State Veterinary Information System in which veterinary documents accompanying the products will be generated electronically (which will be mandatory starting January 1, 2018); and
  • that the Russian Federation Government will develop and approve a procedure for creating, developing and operating the Federal State Veterinary Information System.

The Federal State Information System will contain, in particular, information about pharmaceuticals, feeds and feed supplements for animals.

Government Resolution No. 971 on Clarification of the Procedure for the Circulation of Medicines for Veterinary Use of September 12, 2015 clarified the authority of the Agriculture Ministry and the Federal Service for Veterinary and Phytosanitary Supervision as to the functions set forth in the above-mentioned amendments.