Amendment to the Methodology for manufacturers of medicines to set maximum sale prices for medicines

For the attention of CEOs of pharmaceutical companies, and heads of legal and medicine registration departments in pharmaceutical companies.

Pepeliaev Group advises that 16 November 2012 saw the entry into force of Order No. 400n of the Russian Ministry of Health and Social Development and No. 663a of the Federal Tariffs Service dated 8 October 2012 On amending the Methodology for manufacturers of medicines to set maximum sale prices for medicines included in the list of vital and essential medicines, approved by Order No. 961n/527a of the Russian Ministry of Health and Social Development and the Federal Tariffs Service dated 3 November 2010 (respectively, the “Amendments to the Methodology” and the “Methodology”). The Amendments to the Methodology came into force on the date of official publication in official newspaper Rossiiskaya Gazeta, which occurred on 16 November 2012 in issue No. 265.

Amendments have been made to the rules regarding Russian manufacturers setting prices. The changes stipulate a requirement that a maximum sale price proposed to be registered may not exceed the weighted average actual sale price for the year preceding the date when the manufacturer applied for state registration of the maximum sale price. Under the Amendments to the Methodology, this requirement does not extend to instances of a price being amended owing to a change in the prices of raw products and materials, or overheads, or if the price takes the rate of inflation into account as contemplated by a federal law on the federal budget for the relevant financial year and the planning period. Moreover, in the above cases, maximum sales prices for similar medicines are not taken into account for the purposes of calculating the maximum sale price for a medicine the price of which is the maximum among medicines for the international non-patent name, dosage, (concentration in units of activity), dosage form, number of dosage forms in a package (the number of doses in the package, volume). In practical terms, this rule will bring the Methodology into line with existing practice and with clause 14 of the Rules for state registration of manufacturers’ maximum sales prices for vital and essential medicines, approved by the Russian Government’s Resolution No. 865 dated 29 October 2010 On the state regulation of prices for medicines included in the list of vital and essential medicines. 

If the price of a medicine is amended owing to a change in the prices of raw products and materials, or overheads, an additional calculation must be filed based on data prepared in accordance with the new appendix No. 2-p ‘Calculation of maximum sales prices of Russian-manufactured medicines which are being submitted for state registration’.

Clause 12 of the Methodology adds a rule to the effect that the maximum sale price that a foreign manufacturer has proposed for registration, when the price excludes expenses relating to customs clearance (customs duty and customs fees for customs clearance) and transport costs, may not exceed the minimum manufacturer’s sale price for the medicine in question in the country of manufacture and other countries. No exceptions are stipulated to this rule.

1. analysing the new forms for Russian manufacturers in terms of whether they can be completed promptly if necessary;
2. taking into account when setting prices for a medicine from the list of vital and essential medicines that the price the Russian manufacturer proposes to register needs to be supported by a specific calculation using form 2-p;
3. taking into account the experience that the state authorities have accumulated of checking minimum prices in different countries to justify the price of a foreign manufacturer.

Pepeliaev Group lawyers will give advice on any matters concerning the application of the Methodology. They will share information regarding their experience of registering prices with the authorised bodies, and will advise on arguments to justify profitability and the minimum rate of return.

For further details, please contact:

in Moscow – Vladimir Sokov, Partner, at (495) 967-00-07 or by e-mail;  Irina Naumenko, Senior Associate, at (495) 967-00-07 or by e-mail