New rules for public procurement of polyvinyl-chloride plastic single-use medical devices (PVC SUD)

Pepeliaev Group advises that two Governmental Resolutions^[1] have been signed that are significantly changing how public procurement of PVC SUD is carried out.

The law on the contractual system allows resolutions of the Russian Government to set specific restrictions on certain categories of goods to be accepted for procurement.

Resolution No. 967 establishes a list of PVC SUD originating from foreign states that are restricted from being admitted to procurement for state and municipal needs (the “List”).

The List is intended for procurement exercises in relation to PVC SUD by federal and regional organisations providing free medical care to Russian citizens as part of the government programme.

The List includes blood transfusion devices, blood substitutes and infusions, containers for the banking, storage, and transportation of donor blood and its components, disposables for ALV and heart-lung machines, and urology and colostomy bags.

After the resolutions have come into effect PVC SUD may be purchased only with the companies that in 2017-2024 are implementing comprehensive projects for the expansion and/or localisation of manufacturing of medical devices and are included in the register of suppliers.

In order to be included in the register, suppliers must comply with the Rules for selecting the companies that in 2017-2024 are implementing projects to comprehensively expand and/or localise the manufacturing of PVC SUD for the specific purchase of such products for state and municipal needs, established by Resolution No. 967 (the “Rules”).

The Rules have been introduced for selecting companies that will ensure public-sector demand for (i.e. by purchasing) the manufactured and localised products within the pay-off period for comprehensive projects.

The Rules set out a number of criteria to be met by the applicants for comprehensive projects. These criteria ensure that all devices from the list are being manufactured and the projects’ schedules are being observed. The Russian Ministry for Industry and Trade considers the applications.

The following criteria are among those established by the Rules:

• The company and/or its affiliates, subsidiaries and/or controlled entities should have obtained at least 7 active registration certificates for Russia-manufactured medical devices specified in the List.
• The company should have obtained at least 7 patents for utility models and/or inventions to protect a technical solution that formed part of the medical devices or source materials used to manufacture medical devices included in the List.
• The income (revenue) from sales of manufactured medical devices for the past 3 years (as of the date when the application was filed) shall be at least RUB 700,000.
• The company’s rights to the technical and design documents under which at least 20% of the range (assortment) of all medical devices that are part of the List and source materials used in manufacturing them are valid at least until 1 January 2025.

The Ministry for Industry and Trade will accept and consider applications from companies until 11 September 2017 and such applications must be accompanied by documents confirming the above criteria are met.

What to think about and what to do

The entry into force of the above amendments means that companies should be prudent in assessing their implementation of comprehensive projects for the extension and/or localisation of medical devices included in the List.
Accordingly, where such need exists, they should initiate the procedure to be selected for inclusion in the register of suppliers.

Market participants are advised to acquaint themselves with the Rules and consider them in their future operations.

Help from your adviser

Pepeliaev Group's lawyers provide comprehensive legal support with respect to issues related to the new regulation.