Healthcare system reform

As we informed you previously, at the end of 2017 the Ukrainian Parliament adopted laws that launched the reform of healthcare financing principles, affecting the whole healthcare sector.

To learn about the implications of these laws for pharmaceutical and medical device companies and healthcare institutions, please download the infographic (in English or Ukrainian).

State control over business activities

The State Service of Ukraine on Pharmaceuticals and Control of Narcotics has been allowed to conduct inspections for the first time since 2014

As reported in our January 2018 newsletter, the moratorium on scheduled inspections of business entities has been extended until 31 December 2018.

In line with the law on the introduction of the moratorium, the CMU approved a list of state authorities which should not be affected by the moratorium.

The list became effective on 23 February 2018. The list includes the following state authorities:

  • the State Service of Ukraine on Pharmaceuticals and Control of Narcotics
  • the Antimonopoly Committee of Ukraine
  • the State Fiscal Service of Ukraine
  • the State Service of Ukraine on Safety of Foodstuffs and Consumer Protection (but only to a limited extent, eg, scheduled inspections of compliance with the state pricing regulations are subject to the moratorium).

The State Service of Ukraine on Pharmaceuticals and Control of Narcotics is permitted to carry out scheduled inspections for the first time since August 2014 when the first moratorium was introduced.

Thus, state authorities on the list may carry out both scheduled and unscheduled inspections. Until 31 December 2018, all other state authorities may only carry out unscheduled inspections. The list of grounds for carrying out unscheduled inspections is limited and includes inspections based on an individual's claim (subject to the prior approval of the State Regulatory Service of Ukraine) and the need to verify an entity’s compliance with requirements, orders or other regulatory documents requiring the elimination of a legislation violation that was issued as a result of a previous inspection. To learn about the detailed list of grounds for carrying out unscheduled inspections, please see our November 2016 and January 2018 newsletters.

Companies should be prepared for potential inspections by the State Service of Ukraine on Pharmaceuticals and Control of Narcotics and other authorities on the above-mentioned list in accordance with the inspection plans of these authorities. 

Licensing conditions

Licensing conditions New requirements for pharmaceutical importers became effective

On 1 March 2018 new requirements of the Licensing Conditions for Conducting Business Activities in Manufacturing, Wholesale and Retail Trade of Pharmaceuticals and Import of Pharmaceuticals (save for active pharmaceutical ingredients) approved by Order of the Ministry of Health No. 929 dated 30 November 2016 became effective. These requirements mainly relate to quality control which should be conducted by importers of pharmaceuticals.

Among other things, importers are required to:

  • supply products based on agreements with the marketing authorization holder, and/or the manufacturer and/or the supplier of pharmaceuticals
  • introduce a pharmaceutical quality system
  • ensure stability testing after introducing the pharmaceutical into turnover
  • comply with more detailed quality control requirements for pharmaceuticals and outsourcing agreements
  • ensure storage of archived samples of pharmaceuticals.

Despite the above requirements becoming effective after being postponed twice, the business community anticipates that they will be delayed once again at least until Ukrainian legislation on quality control of pharmaceuticals is harmonized with EU regulations.

Taxation

Extended list of pharmaceuticals and medical devices exempt from VAT

On 25 January 2018 the Cabinet of Ministers of Ukraine (the “CMU”) approved Order No. 48-p which amended the list of pharmaceuticals and medical devices that may be imported into Ukraine and supplied in Ukraine without charging VAT during anti-terrorist operations and/or martial law (the “List”).

Specifically, certain pharmaceuticals (eg, paracetamol and meloxicam) and medical devices (eg, plasters and bleeding-control devices) were added to the list.

Companies may import pharmaceuticals and medical devices on the List into Ukraine without VAT, within the thresholds indicated on this list.

Medical devices

Sanitary and epidemiological control for imported medical devices is abolished

On 31 January 2018 the CMU adopted Regulation No. 44 which amended CMU Regulation No. 1031 “Certain Issues of State Control for Goods Transferred through the State Border” dated 5 October 2011.

The above-mentioned regulation sets forth that medical devices, in-vitro diagnostics and active implantable medical devices should not be subject to state sanitary and epidemiological control if these devices have undergone the conformity assessment procedure under the relevant technical regulations. Previously, this exemption only applied to medical devices which had undergone the registration procedure, but this is no longer effective.

These changes should reduce the list of documents required to import medical devices and in-vitro diagnostics into Ukraine.