Public service connected with licensing pharmaceutical activity

Pepeliaev Group advises that on 6 February 2012 the Russian Ministry of Public Health and Social Development published a draft order on its website by which it approved the Administrative Regulations of the Federal Supervisor for Public Health (“Roszdravnadzor”) with regard to provision of a public service connected with licensing pharmaceutical activity (the “Draft Regulations”). For the official text of the draft please visit http://bit.ly/NaGSa5

The Draft Regulations have been prepared to establish order and standards for providing a public service connected with licensing the pharmaceutical activity.

What do the Draft Regulations regulate?

The Draft Regulations establish the procedure and standards for providing a public service connected with licensing the pharmaceutical activity (the “public service”) by Roszdravnadzor and its regional offices (Departments).
Pharmaceutical activity carried out by legal entities in the sphere of sales of pharmaceuticals for medical use should be licensed. Please note that Roszdravnadzor’s currently effective Administrative Regulations No. 897 dated 31 December 2006 allow individual entrepreneurs to act as licensees; however, the Draft Regulations do not provide for such an option.

The following applicants are able to obtain the public service:

• legal entities – licence applicants (organisations engaged in wholesale of medicines and pharmacy organisations subordinate to federal executives authorities or state academies of sciences);
• individuals and legal entities, only if they apply to obtain information on a specific licence or other information regarding provision of the public service.

Rules for providing the public service:

The Draft Regulations establish the following deadline for providing the public service:

• providing (refusing  to provide) a licence – 45 business days from the date the application is submitted to Roszdravnadzor;
• reissuing (refusing to reissue) the licence:
  - if a legal entity is reorganised through restructuring, its name or actual address is changed – 10 business days from the date the application is submitted;
  - if the change affects the address at which the legal entity carries out the licensed type of activity, the list of work performed or services provided that constitute the licensed type of activity – 30 business days since the date the application is submitted;
• issuing (sending) the licence – 3 business days from the date on which the licence is signed and registered in the registry of licenses;
• providing a duplicate or a copy of the licence – 3 business days from the date the application is accepted;
• suspending the licence – 1 day from the date on which the court decision enters into force by which it inflicts the administrative penalty of administratively suspending the licensee’s activity, as well as if the licensee is held administratively liable for the failure to comply, before the prescribed deadline, with the order to eliminate a serious violation of licensing requirements;
• terminating the licence – 10 business days from the date on which Roszdravnadzor receives information on the licensed activity having been terminated by the licensee;
• annulling the licence – 10 business days from the date on which the extract is received from the effective court decision on annulling the licence;
• providing information on a specific licence from the register of licences – 5 business days since the date on which the requisite documents are received.

The Draft Regulations also provide that suspension of a licence may be lifted as of the following times:

• from the day following the day on which the administrative suspension of the licensee’s activity expires;
• from the day following the day of early termination of the administrative penalty in the form of administrative suspension of the licensee’s activity by the court decision;
• from the day following the day on which the deadline expires for performing the newly issued order of Roszdravnadzor or one of its Departments;
• from the day following the day on which the inspection report is signed whereby it is established that the newly issued order to eliminate a serious violation of licensing requirements has been performed ahead of time.

The Draft Regulations contain an exhaustive list of documents required to provide the public service. Please note that Roszdravnadzor may not demand that the applicant submit any additional documents or perform actions not directly envisaged in effective legislation.

However, the current version of the Draft Regulations do not contain an exhaustive list of grounds for refusing to accept documents required to provide the public service or grounds for suspending the state service.
Clause 37 of the Draft Regulations contains an exhaustive list of grounds for refusing to provide the state service. Moreover, clause 105 of the Draft Regulations provides for the reasoning behind the refusal to be sent to the applicant, with a reference to specific provisions of regulations and other documents that serve as the ground for such refusal.

The Draft Regulations establish a two hour maximum queuing time for the applicants to submit their applications for the state service and to receive the state service.

The Draft Regulations also include a list of information resources on the procedure for providing the public service. For example, information on the schedule for submitting the application, phone numbers for reference, application forms and documents can be found in the Internet at Roszdravnadzor’s official website www.roszdravnadzor.ru, official sites of Roszdravnadzor’s Departments in constituent entities of the Russian Federation or at the Common Portal for Public and Municipal Services www.gosuslugi.ru.

Administrative procedures

The Draft Regulations establish the contents, sequence and deadlines for performing administrative procedures, as well as requirements as to the order in which they should be performed, including a description of how the administrative procedures are performed in electronic format. The list of administrative procedures has been expanded as compared to the Regulations effective at present.

Under the Draft Regulations, a licence can be issues in the form of an e-document according to the procedure established by Russian federal legislation. The applicant may submit the application with e-documents attached via the official website of Roszdravnadzor or the Common Portal for Public and Municipal Services.

Supervising compliance of licensees with licensing requirements

In accordance with the Draft Regulations, licensees may be supervised for compliance with the licensing requirements in the form of a desk or field inspection. According to the general rule, an inspection may not exceed 20 business days. This limitation, however, may be extended in the event of a complicated and/or time-consuming investigation or expert review according to the procedure established in the Draft Regulations by not more than 20 business days.

The deadline for completing the desk or field inspection of a licensee that has standalone subdivisions in several constituent entities of the Russian Federation will be established separately for each relevant detached subdivision of the licensee.

If any serious violation of licensing requirements is identified in the course of the inspection, the licence may be suspended, terminated or annulled. Serious violations include the absence of appropriate premises and equipment for carrying out pharmaceutical activity, the failure to comply with the maximum margin on the prices of medicines included in the list of vital and essential medicines, as well as other violations specified in clause 171 of the Draft Regulations. The above list of violations is exhaustive. If any violation is identified, a protocol regarding the administrative violation is drafted and the licensee is subsequently held administratively liable.

How will provision of the public service be supervised?

Supervision will be performed by officials of Roszdravnadzor and its Departments, as well as by the Ministry of Public Health in the form of scheduled and unscheduled inspections, by reviewing applicants’ complaints and drafting responses to them or identifying and eliminating violations of applicants’ rights. How often such routine inspections will be carried out depends on the head of Roszdravnadzor / its Department. Scheduled inspections will be performed according to Roszdravnadzor’s / the Department’s annual schedule. Inspections may also be carried out further to an applicant’s complaint.

Disciplinary penalties will be imposed on officials of Roszdravnadzor and its Department for the failure to perform or improper performance of their obligations to provide the public service.

Please note that the Draft Regulations prohibit officials from requiring that the applicants perform actions, obtain approvals or provide documents that the licensing authority may obtain directly by contacting the relevant state authorities.

Out-of-court appeal procedure

The Draft Regulations describe an out-of-court procedure for appealing decisions and acts or omissions of officials, as well as the grounds and procedure for reviewing such appeals. The deadline for reviewing an appeal is 15 business days from the date on which it is registered. The Draft Regulations also include a shorter list of grounds, as compared to the effective Regulations, for leaving a complaint unreviewed:
• if the complaint does not contain the name of the individual who filed the complaint or the postal address to which the response should be sent;
• if the complaint contains indecent or abusive language or threats;
• if the text of the complaint is illegible.

The out-of-court appeal procedure is not mandatory.

We recommend that you do the following in connection with the official Draft Regulations having been published:
1. Review the text of the Draft Regulations and, if you have any additional questions, send the relevant comments to the Ministry of Public Health and public associations representing players in the pharmaceutical market;
2. Monitor the information on when the Draft Regulations enter into force;
3. Register at the website for public services www.gosuslugi.ru to be able to receive the public service.

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