Russian Federation: FAS Russia Official Recommendations On The Commercial Policies Of Manufacturers Of Pharmaceuticals And Medical Devices Holding A Dominant Position On The Market

Last Updated: 7 July 2015
Article by Anna McDonald and Marat Mouradov

On June 30, 2015 on its official site FAS Russia published recommendations for entities holding a dominant position on pharmaceuticals markets and medical devices markets (hereinafter together "pharmaceutical companies") to develop and apply commercial policies.

In recent years FAS Russia has been paying close attention to the Russian pharmaceuticals market and the medical devices and equipment market. Based on the results of audit and after considering numerous (and quite high-profile) cases of violation of antimonopoly laws by pharmaceutical manufacturers, FAS Russia entered into a direct dialogue with the market players in order to formulate transparent and clear rules of conduct for pharmaceutical companies on the Russian market. One of the results of that dialogue are the official FAS Russia recommendations for entities holding a dominant position on pharmaceuticals markets and medical devices markets to develop and apply commercial policies (hereinafter the "Recommendations") approved by the Presidium of FAS Russia on June 17, 2015 and published on the FAS Russia site on June 30, 2015.

The Recommendations are based on the results of analysis of FAS Russia practice, and their text cites examples from the notorious cases of OOO Novo Nordisk, ZAO Kompaniya Bakster and TEVA PHARMACEUTICAL INDUSTRIES LIMITED.

Formally, the Recommendations apply only to those pharmaceutical companies that hold a dominant position on the market. However, considering that companies selling an INN drug that has no analogues in practically all cases will be considered monopolists on the market for that particular drug, it is obvious that many, if not most pharmaceutical companies should pay attention to the Recommendations. The text emphasizes that defining the size and boundaries of the product market is a multifaceted and complex process, and not only obvious criteria (such as sales and amount of revenue) should be taken into account, but also the criterion of interchangeability. In particular, FAS Russia pays particular attention to the fact that for a drug that cannot be replaced by other drugs the size of the market will be equivalent to the size of the market precisely for that irreplaceable drug and, accordingly, a company distributing such a unique drug in Russia will be considered a monopolist on the market for that drug. It is also important to note that the interchangeability or irreplaceability of any drug by other drugs should be established by a court.

The Recommendations strongly urge pharmaceutical companies holding a dominant position on the market for the relevant drugs to openly, objectively and reasonably select their counterparties and establish a transparent and clear system of discounts, bonuses and other economic benefits for them. In the context of this process, the Recommendations are particularly timely for companies that fall under American and English anticorruption legislation (FCPA and UK Bribery Act), which often leads to such pharmaceutical companies setting overstated and unreasonable (subjective) criteria for local distributors. Below is a brief overview of the key provisions of the Recommendations.

  • The Recommendations propose that pharmaceutical companies adopt a detailed commercial policy that, inter alia, must contain criteria for selecting counterparties, a procedure for such counterparties' due diligence based on the results of which the pharmaceutical company will decide whether to enter into a contract with the counterparty or refuse to do so, the list and authorities of the officers participating in the due diligence process and the list and authorities of the officers deciding whether to cooperate with the counterparty or to refuse such cooperation, the timeframe and procedure for reviewing counterparties' applications for cooperation/entry into a contract and the terms of cooperation with them defining the price of the product, sales volume, payment terms, etc. The commercial policy is required to include a draft standard contract with the counterparty containing all of its material terms, and the form of the new counterparty application. The Recommendations require the pharmaceutical company to post the template of such contract on its website and ensure free access of any third parties to it. It is recommended that all counterparties be promptly notified of any changes in the policy and/or templates of the contract and/or application.
  • The document presents an inexhaustive list of objective criteria for selecting counterparties, for example: the counterparty having no arrears on taxes and duties or no indebtedness to a pharmaceutical company, the counterparty having been registered and holds the required licenses, the top managers of counterparty not having criminal records, etc. It is noted that the requirements to a counterparty may touch on the legal, financial and business aspects of the counterparty's activities; however, the list of such requirements and the list of documents requested by the pharmaceutical company to perform due diligence on the counterparty as those appear in the policy must be exhaustive and must contain clearly worded, clear and unambiguous criteria for selecting counterparties.
    It is noted separately (citing the presumption of innocence) that information in the mass media, including on the Internet, as well as information obtained unofficially (for example, by telephone) concerning the counterparty's officers' involvement in corruption cannot be a basis for refusing to enter into a contract.
    In order to avoid antimonopoly risks FAS Russia strongly recommends that pharmaceutical companies not suspend the supply of product and not to refuse to enter into a contract with a counterparty until a competent state authority of the Russian Federation declares the counterparty guilty of committing an offense that is inconsistent with the criteria for selecting counterparties established by the pharmaceutical company, and makes it impossible to continue cooperation with that counterparty.
  • As a way of significantly mitigating antimonopoly risks, FAS Russia strongly recommends that pharmaceutical companies describe the process of selecting counterparties in their commercial policy in detail, disclosing all of the possible stages of review of applications for cooperation (execution of a contract), naming the officers involved in the pharmaceutical company's decision-making process in the matter, and also stating the maximum period for reviewing applications of counterparties, including at each stage of the due diligence, and the possibility of extending the due diligence period at each stage justifying the possible reasons. FAS Russia does not recommend, in particular, that pharmaceutical companies overlook the importance of setting and sticking to maximum time periods for reviewing applications, highlighting such actions as a factor increasing the probability of the pharmaceutical company being deemed as abusing its dominant position on the market for the product in question.
  • FAS Russia allows a pharmaceutical company to use different commercial terms (financial benefits) (discounts, bonuses) for different counterparties, but only provided that this difference in the terms offered is economically justified. Among the permitted grounds for having different financial benefits, FAS Russia cites purchasing volume, prepayment, purchase of products from the warehouse or illiquidity of the product being sold. At the same time, it is not recommended to connect granting financial benefits with the purchase forecasts at tender indicating the regions of future supplies, as this could be considered as an unfair collusion at auction or coordination of economic activity, which is prohibited by the antimonopoly legislation. FAS Russia emphasizes in particular that pharmaceutical companies in the majority of cases are capable of independently planning the volume of their sales, based on information on past and projected volumes of the public client's needs for the relevant pharmaceuticals and about tenders held by the public client during the calendar year (including taking into account information on the number of patients who are taking the medications in question).
  • FAS Russia allows pharmaceutical companies to carry out systematic audits of their counterparties to check compliance by the latter with the terms of the pharmaceutical company's commercial policy.
  • The Recommendations call upon pharmaceutical companies to keep good records reflecting their interaction with counterparties: each stage of the process of interacting with the counterparty should be documented, all incoming and outgoing correspondence must be registered, each stage of the process of reviewing applications for cooperation and taking decisions on them should be recorded in a document, be signed and state the names of the pharmaceutical company officers who took part in the management decisions. It is also recommended to keep all applications and correspondence, as well as internal documents supporting the decision-making process for at least 5 years.
  • FAS Russia recommends to include in the commercial policy a detailed description of the grounds and procedure for the pharmaceutical company ceasing operations with a counterparty. The list of grounds for terminating a relationship should be exhaustive and the grounds themselves should be clearly worded and be interpreted unambiguously. As an example FAS Russia cites such objective grounds for terminating a contract with a counterparty as the latter's liquidation, failure to meet the selection criteria, the counterparty going out of business, payment arrears (exceeding a threshold), and agreement of the parties.
    Formally, failure to comply with the Recommendations should not give rise to any liability or other adverse consequences. However, it is obvious that FAS Russia compiled them on the basis of practical conclusions that FAS has gathered based on the results of cases considered involving pharmaceutical companies, and that the Recommendations reflect the official position of FAS Russia as to the interpretation of the relevant actions of pharmaceutical companies on issues that arise most often in their business. Thus, compliance with the Recommendations may considerably reduce the risk of being held liable for violation of Russian antimonopoly law. That being said, undoubtedly, open and transparent interaction with counterparties will reflect positively on the company's reputation.

It should be noted that the mere adoption by a pharmaceutical company of a commercial policy compliant with the Recommendations does not mean that liability cannot be imposed if a violation has been proved. However, having the working mechanisms described in the Recommendations, specifically, having a policy and making sure its provisions are in compliance with the principles set out in the Recommendations (especially if the policy has been agreed with FAS Russia) may be a factor mitigating liability. It is precisely the quality of the policy from the perspective of its procedure for preventing violations that may provide a real opportunity to a pharmaceutical company to assert in the court that the company is not at fault because it used all of the capabilities available to it and spelled out in the policy to prevent a violation, or at least to mitigate its adverse effects.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.