RUSSIA: An Introduction to Life Sciences

Russian legislation covering the pharmaceutical and medical devices industry is still in transition and undergoing significant changes. The most notable of these involve harmonising it with the best international practices, strengthening protective measures and encouraging localisation. Moreover, the Eurasian Economic Union (the EAEU) officially came into being on 1 January 2015, creating a new supranational regulatory environment for medicines and medical devices to circulate across the member states.

In 2014, in the context of implementing the programme of replacing imports with domestic substitutes and the Pharma-2020 strategy (the “Strategy”), the Federal Law “On industrial policy” was adopted. This aims to enhance local manufacturing, and also enacts a wide, non-exhaustive list of support measures, among them financial support and providing state and municipal preferences. It is also possible for the state to conclude special investment contracts with a foreign investor for up to ten years. During the term of such contract, the investor undertakes to create or develop manufacturing, and the state undertakes to grant various privileges to the investor and to insulate the investor against changes in legislation.

Amendments to the Law on Circulation of Medicines :

The Federal Law “On the circulation of medicines” was significantly amended at the end of 2014. The developments in this large package of amendments included updating terminology, establishing special regulation for certain categories of pharmaceuticals, improving the registration procedure, and determining a mechanism for medicines to be regarded as interchangeable.

The law now provides for fast-track registration of certain categories of drugs, recognises biosimilars and establishes a set of special rules for them. The Ministry of Health has been given a new function - when asked by parties involved in the circulation of medicines, the Ministry will advise on pre-clinical and clinical trials, expert examination of the quality, effectiveness and safety of medicines, and state registration issues.

One of the most important developments is the transition to the latest GMP practices ensuring equal conditions and requirements for all stages of the circulation of pharmaceuticals, from development to sales to consumers. In particular, the Ministry of Industry and Trade has now put up for public discussion a draft procedure for pharmaceutical manufacturers to be inspected for compliance with GMP and a procedure for issuing to a pharmaceutical manufacturer a declaration of conformity with GMP.

The amendments, most of which will come into force on 1 July 2015, are in line with the trend of modernising the healthcare industry and ensuring that pharmaceuticals circulating in Russia are of high quality.

It should be noted that recently the Russian government has laid down the specific conditions for the state regulation of the maximum sale prices that can be charged by a manufacturer for pharmaceuticals included in the essential drug lists. These depend on economic and/or social criteria, such as: (i) changes to the conditions, procedure and cost of producing pharmaceuticals; and (ii) the use of new forms, methods and means of state regulation of the prices of pharmaceuticals, including reference pricing and changes in medical treatment. It aims to ensure that the pharmaceuticals market responds rapidly to pricing, which may depend on factors such as the economic situation in the country and exchange rate fluctuations.

As things stand, there are still no unified regulations for medical devices in Russia. There are numerous individual legislative acts covering various stages of the circulation process for medical devices in the country, but there is no law that consolidates all the provisions. In the past few years there has been wide discussion of a draft law on the circulation of medical devices with the aim of consolidating the regulations in the area; however, this has still not been completed or adopted.

In early 2015, a significant amendment was adopted concerning state regulation of the prices of medical devices implanted into a human body. Thus, the following are now subject to state regulation: (i) manufacturers’ maximum sales prices; and (ii) the maximum amounts of extra wholesale and retail charges added to the actual selling prices of medical devices implanted into a human body when medical aid is given in the context of the state’s guaranteed free public healthcare programme.

Russian legislation directly prohibits manufacturers of pharmaceuticals and medical devices and their representatives from making gifts and other payments to healthcare professionals that do not relate to such professionals’ educational or scientific activities. However, Russian legislation has still not introduced liability for making such payments.

Discussion is now under way of a draft Code of Conduct for pharmaceutical companies. This is expected to be adopted in 2015.

The main goals of the Code are: (i) to resolve issues not dealt with in the legislation that surround the interaction of pharmaceutical companies with other market players; (ii) to co-ordinate with the Federal Anti-Monopoly Service acceptable rules aimed at regulating competition on the pharmaceuticals market; and (iii) to take best international practice into consideration.

It is planned that the following issues will be included in the Code: (i) a procedure for interacting with distributors; (ii) commercial terms and conditions for supplying products to distributors and state customers; (iii) the harmonisation of instructions on the medical use of original pharmaceuticals and generics; and (iv) practices that prevent improper and corrupt interactions with HCPs.

Companies will sign up to the Code on a voluntary basis. They will do so by issuing a declaration that they will abide by the Code and placing information about this on their websites. Companies that take these steps will then be obliged to adhere to the principles stated in the Code.

One of the most discussed of the new developments in public procurement is a recently adopted Government Resolution that sets out a list of medical devices originating in foreign countries, which are restricted in terms of being admitted to public procurement processes. This Resolution applies the restriction to all bids containing offers to supply medical devices originating in foreign countries except for Armenia, Belarus and Kazakhstan. If at least two bids have been placed, ordering parties must reject foreign bids from outside the EAEU in favour of any supplier that meets the requirements of the procurement documentation and at the same time offers to supply types of medical devices which are on the special list and originate in Russia, Armenia, Belarus or Kazakhstan.

At the beginning of 2015 a new set of rules was adopted and included in the Russian Criminal Code and Russian Code of Administrative Offences aimed at counteracting the circulation of forged, counterfeit, defective and unregistered pharmaceuticals or medical devices and forged biologically active additives. All parties involved in the circulation of life science products need, from now on, to be on their guard against forged products. The same applies to any violation of intellectual property rights as well as to even a minimal discrepancy between the attendant information about such products and any of: (i) the official data about them contained in the state register; (ii) the requirements of regulatory documents. The risks are serious, and officers of any company guilty of these offences may even face criminal prosecution.