Major Russian legal changes
1. The Russian government has introduced a risk-oriented approach for scheduled inspections in the healthcare industry
(RF Government Resolution No. 907 on Amendments to the Regulation on Federal State Supervision in the Circulation of Medicine, dated July 31, 2017)
(RF Government Resolution No. 801 on Amendments to the Regulation on State Control of the Quality and Safety of Medical Activity, dated July 5, 2017)
The risk-oriented approach affects, first of all, the frequency of inspections by the Federal Healthcare Supervisory Service ("Roszdravnadzor") and is intended to increase the efficiency and effectiveness of supervisory activity and reduce the administrative and financial burden such activity might place on businesses.
Four risk categories have been introduced for entities involved in the circulation of medicines: low, moderate, medium and significant risk. The assignment of business entities to these categories is to be based on the seriousness of potential negative consequences of a breach of applicable requirements by such entities. Resolution No. 907 describes the criteria and procedures to be followed in assigning a category to a given business. In particular, the director of Roszdravnadzor may issue a decision assigning an entity to a specific category; absent such decision, the entity is to be considered low-risk.
The frequency of inspections of entities involved in the circulation of medicines is to be as follows:
- once every three years for significant-risk entities;
- not more than once every five years for medium-risk entities; and
- not more than once every six years for moderate-risk entities.
Low-risk entities will not be subject to scheduled inspections.
Resolution No. 801 establishes similar principles for entities engaging in medical activity, but adds two additional categories: extreme and high risk. Extreme-risk entities are to be inspected once a year, while high-risk entities shall be inspected once every two years. Resolution No. 801, unlike Resolution No. 907, does not provide for default assignment of an entity to a low-risk category in the absence of a specific decision by the director of Roszdravnadzor.
2. The Russian Ministry of Health has updated the registration dossier for pharmaceutical drugs for medical use
(RF Ministry of Health Order No. 409-n on the Approval of a Procedure for Forming the Registration Dossier for a Pharmaceutical and Documentary Requirements in the Dossier, Requirements Regarding the Scope of Information to Be Provided as Part of the Registration Dossier for Certain Types of Pharmaceutical Drugs and the Procedure for Submitting Documents from which the Registration Dossier for a Pharmaceutical Drug is Formed for the Purpose of its State Registration, dated July 12, 2017)
July 2017 saw changes to the list of documents and information that are required to be submitted for state registration of pharmaceutical drugs and that form part of the registration dossier, along with the procedure for their submission.
The regulator eliminated requirements that the filing entity submit information regarding compensation of clinical trial patients along with copies of their compulsory insurance contracts, the investigator’s drug brochure, as well as other documents. At the same time, the regulator expanded other requirements related to clinical documentation and information, introduced the requirement to submit data on the pharmacovigilance system and measures and incorporated other additional requirements.
The Order incorporates current terminology and other recent legislative amendments.
(Federal Law No. 242-FZ on Amendments to Certain Legislative Acts of the Russian Federation on the Application of Information Technologies in Healthcare, dated July 29, 2017)
In the course of modernizing applicable laws, amendments to Federal Law No. 323-FZ on the Fundamental Principles of Public Health Protection in the Russian Federation of November 21, 2011 were introduced. Specifically, the amendments introduce a so-called telemedicine service into the Russian healthcare system, i.e., they allow medical care to be provided by way of remote-access technology. The law sets forth an exhaustive list of purposes for which telemedicine technology can be used:
- interaction between doctors and patients (or their legal representatives), as well as between doctors;
- identification and authentication of telemedicine service users;
- documentation of actions of medical staff and patients (or their legal representatives);
- conducting of conferences and/or consultations; and
- remote monitoring of patients’ health.
A patient must still visit a doctor in person in order to get a diagnosis. Only after such first in-person visit will a doctor be able to remotely monitor the patient’s condition, adjust treatments, issue online prescriptions (including for drugs containing narcotic substances), and remotely issue various medical documents (for example, medical disability certificates).
Each patient should get a digital signature for identification purposes. The digital signature allows a patient to access an identification system to which doctors and medical institutions also have access.
The amendments entered into force on January 1, 2018, save that the amendments on remote prescription of drugs containing narcotic and psychotropic substances will take effect on January 1, 2019.
4. The Essential Medicines list to be in effect in 2018 has been updated
(RF Government Oder No. 2323-r on Approval of the List of Essential Medicines for 2018 and the List of Pharmaceutical Drugs and the Minimum Range of Drugs Needed to Provide Medical Care, dated October 23, 2017)
Due to their social significance, medicines included in the Essential Medicines list have special legal status; in particular, such medicines are subject to special pricing regulations and restrictions on public procurement of drugs manufactured abroad (the so-called “third one is out” rule). The list has been updated regularly by the Russian government since it was introduced. On January 1, 2018 the list was expanded by adding 60 drugs and eight dosage forms of drugs already included in the list.
We note that in early 2017, the Russian President suggested optimizing pricing methods with respect to medicines on the Essential Medicines list in order to prevent spikes in their prices. The Russian Ministry of Health thereby prepared a draft Methodology for calculating the maximum sale price for medicines included in the Essential Medicines list. In June 2017, the Russian Federal Antimonopoly Service (“FAS”) didn’t endorse the proposed Methodology, which is now under discussion at a special commission of the Russian Ministry of Health.
(RF Government Decree No. 1380 on the Specifics of Describing Pharmaceutical Drugs for Procurement for State and Municipal Needs, dated November 15, 2017)
The Decree, which entered into effect on January 1, 2018, states that as a general rule, the following information must be indicated in the description of pharmaceuticals for public procurement:
- the international nonproprietary name or chemical / grouping names;
- the dosage form of the drug;
- the dosage of the drug; and
- the remaining shelf life.
Importantly, it is prohibited, among other things, to indicate the fill volume of the primary packaging or the form of the drug, auxiliary substances, fixed storage temperature requirements if there is an alternative, the quantity of drug units in the secondary packaging, and also to indicate “other characteristics of the pharmaceutical drug contained in the product instructions pointing to a specific manufacturer.” These measures are intended to limit the state customer’s ability to encourage unfair competition by indicating restrictive criteria with a view to causing a specific supplier to be chosen.
However, the Decree allows indicating such characteristics in the description on an exceptional basis if “it is not otherwise possible to describe the pharmaceuticals” (with justifications why it is necessary). Such an exception poses a risk that state customers could further misuse restrictive descriptions.
It is anticipated that a system to monitor the movement of pharmaceutical drugs will become mandatory as from January 1, 2020. Some manufacturers are already known to be labeling medicines voluntarily as part of an experiment started by the Russian government.
The monitoring system will track the movements of medicines from manufacturers to end consumers by using special identifiers placed by manufacturers on packaging. Companies and individual entrepreneurs involved in the circulation of medicines must then enter related data into the monitoring system. The Russian government has not yet established requirements for such identifiers or maintenance of the monitoring system (including the scope of data required).
The federal law that introduced the monitoring system includes other amendments. For example, in order to register medicines and pharmaceutical substances, information about the applicant’s and manufacturer’s taxpayer registration in their respective countries of incorporation together with the taxpayer’s identification number is required. Holders or owners of registration certificates for medicines, as well as manufacturers of medicines and pharmaceutical substances registered before January 1, 2018, must provide information about their taxpayer registration by January 1, 2019.
Practice news and development trends
In recent years, the problem of generic drugs being registered prior to expiry of the patent for the original drugs has become more common. Among other cases, many large pharmaceutical companies have filed suits against Nativa LLC, which has managed to register multiple generic drugs in breach of patent holders’ rights.
In the spring of 2017, Bristol-Myers Squibb lost a case against Nativa LLC in the court of first instance. The court found that the mere registration of a generic drug does not violate the patent protection regime, and the law does not contemplate the possibility to impose restrictions on future intentions with respect to a registered drug. The claimant dropped its case at the appellate level, then initiated new litigation.
However, in September 2017, the Moscow Region Commercial Court delivered a decision that may be precedent-setting. In this case, Novartis convinced the court to enjoin Nativa LLC against putting a generic drug into circulation prior to expiry of the patent.
However, even if court practice develops further in this direction, this approach does not entirely eliminate the risks for pharmaceutical manufacturers, who will be obligated to constantly monitor the actions of unscrupulous competitors putting generics into circulation and protect their rights in court, including by claiming damages for such violations. Precisely for this reason it is important to note that Novartis petitioned the court (first the court of the first instance, then the appellate court) to order Nativa LLC to apply to the Russian Ministry of Health to suspend registration of the generic drug in question, but that claim was dismissed.
Meanwhile, the Association of International Pharmaceutical Manufacturers sent FAS a letter requesting urgent steps to fight this problem. The letter listed specific cases where generic drugs that were under patent protection won public procurement tenders.
8. Further steps to unify the rules on circulation of medicines in the Eurasian Economic Union (the “EAEU”)
Legislative activity to support the circulation of medicines in the EAEU common market continues. For example, a unified information system is being developed on the basis of the EAEU’s unified register of registered medicines. The legislative foundation for such a system was laid in 2016.
The unified information system is intended to help lift administrative barriers to introducing medicines into circulation in the EAEU, and will additionally create standards on medicine quality.
Among the relevant measures are Russian Government Resolution No. 1159, dated September 25, 2017, which tasked the Russian Ministry of Health with the functions of registering medicines intended for circulation in the EAEU; and the Federal Tax Service order of September 27, 2017, which approved the form and format of the tax return for indirect taxes for EAEU goods imports.
9. Remote sale of medicines
On December 13, 2017, the Russian State Duma adopted in the first reading a draft law introducing a new type of work (service) for the remote retail sale of medicines.
However, it is worth noting that the draft law (in its current version) allows only pharmacies to engage in such activity, and requires reapplication for a license in order to include a special provision on remote sales.
At the same time, it prohibits the remote retail sale of prescription drugs. In order to prevent such sales, the draft law empowers federal authorities to block a website without a trial.
10. Recommendations on pharmaceutical advertising
Pharmaceutical associations (in particular the Association of European Businesses, the Association of International Pharmaceutical Manufacturers, the Association of Russian Pharmaceutical Manufacturers and the Union of Professional Pharmaceutical Organizations) have prepared draft Recommendations on Advertising of Medicines. Together with general requirements regarding the format and content of advertising in accordance with Federal Law No. 38-FZ on Advertising of March 13, 2006, the draft Recommendations set forth the following express prohibitions:
- against use of images of fairytale and fictional doctors or medical workers (such as Doctor Aybolit);
- against addressing the consumer directly with questions and/or suggestions and against assuming that someone has a particular illness based on specified symptoms (for example, “Coughing? You have the flu!”); and
- against presenting competitors in a negative light.
It should be noted that even with FAS support, these Recommendations will not be binding on pharmaceutical manufacturers and will be merely guidelines. However, drug manufacturers hope that complying with the Recommendations will help reduce the number of FAS complaints regarding pharmaceutical advertising.