Russian Federation: Changes In The Regulatory Control Of The Pharmaceutical Market - Q1 2016 Review

Last Updated: 18 May 2016
Article by Anna McDonald

Until January 1, 2017, for confirming the state registration of a foreign medicinal product, it is permitted to present a certificate of GMP compliance (obtained in the country of origin) to the applicable GMP standards in the country of origin.

The initial state registration of a medicinal product which is valid for 5 years is to be "confirmed" by RF Ministry of Health (the "MOH") by issuing an unlimited marketing authorization therefor upon the request of the initial holder of the marketing authorization. According to the previously effective requirements of the Federal Law on the Circulation of Medicinal Products (No. 61-FZ of Apr. 12, 2010; the "Law on Circulation of Medicines"), as from January 1, 2016, in order to confirm the registration of a foreign-made medicinal product, it was necessary to present a copy of a statement of the manufacturer's conformity to the requirements of good manufacturing practice ("GMP") issued in the Russian Federation. The Federal Law on Amending Certain Legislative Acts of the Russian Federation (No. 389-FZ of Dec. 29, 2015) relaxed this requirement – throughout the year 2016, it will be sufficient for foreign manufacturers of medicinal products and pharmaceutical substances to present a document regarding conformity to GMP standards in the country of origin, issued by the relevant foreign authority,1 with a certified Russian translation.

However, for the initial state registration of a medicinal product, the requirement remained in effect to present a statement of conformity of the manufacture thereof to Russian GMP standards, issued by a Russian authority. The fact that the procedure for the inspection of pharmaceutical facilities for their conformity to Russian GMP standards were approved with a substantial delay, as well as the practical and administrative difficulties of conducting the inspection for such conformity in respect of pharmaceutical facilities located outside of Russia, leads to many pharmaceutical companies being uncertain as to the possibility for the timely registration of new drugs.2

Law on Fundamental Principles of Public Health Protection3 amended with respect to licensing powers

The changes were made by the Federal Law on Amending Articles 14 and 15 of the Federal Law on Fundamental Principles of Public Health Protection in the Russian Federation (No. 93-FZ of Apr. 5, 2016) and are effective as from October 3, 2016.

According to these changes, the Federal Service for Healthcare Supervision (Roszdravnadzor) has received various powers with respect to licensing supervision, the suspension, renewal, and cancellation of licenses, and monitoring the effectiveness of the licensing of activities falling under the Law on Fundamental Principles of Public Health Protection (including pharmaceutical and medical activities).

New in the pricing of vital and essential drugs ("VEDs")

The changes to RF Government Resolution No. 865 of October 29, 2010, "On the state regulation of prices for pharmaceutical drugs included on the VED list," effective as from March 1, 2016,4 stipulated that the regional executive authorities of RF administrative divisions adopt decisions on setting the maximum markups on the actual factory prices set by VED manufacturers, following the approval of the draft versions of the respective decisions with the Federal Antimonopoly Service of Russia ("FAS").

The draft version of the respective decision on setting and/or changing the maximum wholesale markups and maximum retail markups on the actual manufacturers' prices for pharmaceutical drugs must be sent to FAS for approval. Within 30 business days upon FAS's receipt of a draft decision, FAS must either approve or refuse to approve it.  A list of grounds for refusal by FAS to approve the draft decision is introduced to the Resolution.

Information on the approval or refusal to approve the draft decision is posted on FAS's official website within 3 business days from the date of such decision.

Thus, the official procedure for FAS to exercise its powers to control VED pricing which were received by FAS following the dissolution of the Federal Tariff Service and the assignment of the latter's functions to FAS, has been approved.

Changes pertaining to the circulation of narcotic and psychotropic substances: dissolution of the Federal Drug Control Service; MOH requirements for the storage of narcotic and psychotropic substances

RF Presidential Decree No. 156 of April 5, 2016, "On improving state management in the area of the control of narcotic drugs, psychotropic substances, and their precursors and in the area of migration," has dissolved the RF Federal Drug Control Service (FDCS) and the RF Federal Migration Service (FMS). The powers of the said agencies were assigned to the Interior Ministry of Russia. The respective organizational staffing measures are to be completed by June 1, 2016; FDCS and FMS personnel will continue performing their assigned duties until the completion of those measures.

Coming into effect on January 26, 2016, was a new version of the special requirements on storage conditions for narcotic drugs and psychotropic substances ("narcotics and psychotropic substances") registered as medicinal products. These requirements were approved by MOH Order No. 484n of July 24, 2015, and apply to pharmacy, medical, research, educational, and wholesalers to the extent any of them are dealing with narcotics and psychotropic substances. The key requirements have not changed, but certain adjustments have been made – e.g., the separate storage of narcotics and psychotropic substances for parenteral, internal, and topical use calls for the storage thereof on separate shelves or in a separate compartment of a safe or cabinet.  Also, the terminology in Order No. 484n has been brought in line with applicable laws.

The latest changes in veterinary legislation

Expansion of the list of narcotic drugs and psychotropic substances used in veterinary medicine

According to the amendments to the Federal Law on Narcotic Drugs and Psychotropic Substances (No. 3-FZ of Jan. 8, 1998; the "Narcotics Law") made by Federal Law No. 90-FZ of April 5, 2016, narcotics and psychotropic substances included on schedules II and III of the List of Narcotic Drugs, Psychotropic Substances, and Their Precursors and which have been registered as required by the laws governing the circulation of medicines can be used in veterinary medicine. Currently, such List as approved by RF Government Resolution No. 681 of June 30, 1998, is in effect.

The amendments stipulate that narcotics and psychotropic substances permitted for use in veterinary medicine are subject to the laws governing the circulation of medicines to the extent not contradicting the Narcotics Law.5 The requirements for the development and state registration of new narcotics, psychotropic substances, and their precursors, and for the packaging and labeling thereof, provided by the Narcotics Law equally apply to the respective drugs and substances intended for veterinary use.

Eurasian Economic Union (EAEU) news

Ratification by the Russian Federation of the Treaty on Uniform Principles and Rules for the Circulation of Medicinal Products within the EAEU (the "Agreement on Medicinal Products") and the Treaty on Uniform Principles and Rules for the Circulation of Medical Goods (Medical Products and Medical Equipment) within the EAEU (the "Agreement on Medical Goods")

Both treaties were ratified by Federal Laws No. 5-FZ and No. 4-FZ, respectively, dated January 31, 2015, and, according to the terms and conditions thereof, came into effect for the Russian Federation on February 12, 2016.

The Treaty on Medicinal Products and the Treaty on Medical Goods regulate the basic operating rules of the overall EAEU market for medicinal products and medical goods, in particular, matters of the registration, testing, manufacture, and sale of medicinal products and medical goods, harmonization of the state pharmacopoeia of EAEU members, labeling issues, and others.

However, notwithstanding the entry into force of these agreements, a single market for medicines and medical goods for the EAEU countries has not yet been formed. To begin the operation thereof, many procedures need to be approved and they need to start actually being used. In the course of pharmaceutical forums and individual conversations, experts and market regulators from the EAEU member countries are attempting to unify their regulations.

One of the stumbling blocks6 has been the definition of medicines' interchangeability, which Russia (at the initiative of FAS) is insisting to include as a key term at the medicine's registration and testing stage. The four other EAEU member countries disagree with including it in the regulatory documents governing the circulation of drugs within the EAEU.

Q1 2016 notable cases on the pharmaceutical market

FAS suspects major suppliers of medicines of organizing a cartel7,8

FAS has initiated proceedings against FARM SKD, Simbirsk Pharm, Novopharm, and Medintorg on grounds of raising, dumping, or fixing of tender prices (Art. 11(1)(2) of the Federal Law on Protection of Competition (No. 135-FZ of July 26, 2006)). In particular, FAS suspects the manufacturers of organizing a cartel for the purpose of fixing prices in more than 400 public auctions for the supply of medicinal products for the needs of medical institutions. Grounds to suspect the entry into an anticompetitive agreement were identified in 5 regions for the supply of, among others, antiviral drugs for the treatment of HIV and hepatitis B and C for contracts totaling in excess of 700 million rubles.

Proceedings on similar grounds were initiated against Jodas Expoim, FK Pharmacoppola, and Satikom. These organizations are suspected of an anticompetitive agreement aimed at the fixing of tender prices in the holding of auctions for the supply of antibiotics. The anticompetitive actions were carried out in 12 regions of the Russian Federation in more than 200 auctions for state procurement contracts totaling in excess of 200 million rubles.

FAS wins first court case on the registration of prices for medicinal products9

On March 15, 2016, the Moscow City Commercial Court has validated the FAS refusal to approve the maximum manufacturing prices for the drugs Ciprofloxacin and Metronidazole manufactured by Elfa Laboratories (India).

RF Presidential Decree No. 373 of July 21, 2015, "On certain issues of state management and control in the area of antimonopoly and tariff regulation," has dissolved the Federal Tariff Service and has delegated tariff regulation authority to FAS.  Over the last five months of 2015, FAS has considered 1,617 proposed prices for VEDs, and in roughly 40% of the cases refused to register the proposed prices. In case of the Elfa Laboratories medicinal products, FAS classified as unreasonable the more than triple price increase for the drug Ciprofloxacin and the more than 4-fold price increase for the drug Metronidazole and refused to register those increases. The manufacturer was unable to present arguments to the court that would justify the said increases and thus would question FAS's position, so the court dismissed the claims seeking to invalidate FAS's decision as illegitimate.

RF Investigative Committee demanded the RF Consumer Protection Service to withdraw certain bioactive supplements from circulation10

According to a letter from the head of the Moscow Main Investigative Department of the Investigative Committee of Russia, Alexander Drymanov, in response to a request from deputy head of the State Duma Sergei Zheleznyak, which has been reported on in the media, the RF Investigative Committee has conducted searches of wholesalers and six leading pharmacy chains.11 During the inspection of samples of the products Sealex Forte and Alicaps that were collected in the course of the searches, the undeclared substance tadalafil was detected therein. The manufacture, sale, or importation into RF territory of bioactive supplements containing pharmaceutical substances not declared upon their state registration is a punishable criminal offense ( Art. 238.1 of the RF Criminal Code). Besides opening a criminal case, theRF Investigative Committee has requested the Federal Service for Supervision of Consumer Rights Protection and Human Welfare ("Rospotrebnadzor"), as the regulator of the market for bioactive supplements, to prohibit the circulation of these bioactive supplements, since they are in fact pharmaceutical drugs which have not undergone mandatory state registration.

Notably, in the course of public "test purchases" back in 2015, tadalafil was detected in various Russian- and foreign-made bioactive supplements. The state registration of the product Tongkat Ali Platinum was canceled by Rospotrebnadzor,12 and the registrations for a number of other supplements containing it were withdrawn by their manufacturers voluntarily.

Guidance from competent authorities on various matters

FAS, the Economic Development Ministry, the Industry and Trade Ministry, and MOH comment on the use of the "odd man out" rule in the government procurement of VEDs

A number of agencies sent out letters13 laying out their position on the application of the provisions of RF Government Resolution No. 1289 of November 30, 2015, "On restrictions and conditions for the admittance of foreign originated pharmaceuticals included on the list of vital and essential drugs for the purposes of central and local government procurement" ("Resolution No. 1289").

In particular, according to these letters:

  • Resolution No. 1289 applies only to cases of procurement under a single international nonproprietary name ("INN") or absent such name – under a chemical or group name in the context of a single contract;
  • if a procurement participant's application contains several trade names for a pharmaceutical drug in the context of a single INN, and any one of those trade names is foreign (except for EAEU member states), such application is deemed to contain a proposal for the supply of a pharmaceutical drug of foreign origin.
  • if one application has been filed for participation in determining a supplier, the restriction imposed by Resolution No. 1289 does not apply, as a result of which the application of the sole procurement participant lacking a certificate on form ST-1 shall not be grounds for rejection of the application;
    etc.

FAS clarifications on the procedure for manufacturers' pricing of VEDs

In its letter No. AK/9664/16 of February 17, 2016, FAS clarified many details relating to setting the maximum manufacturer's price for VEDs. In particular, FAS clarified that upon a change of the information on a specific pharmaceutical, the price for which is already registered and is in the state register of maximum manufacturers' prices for pharmaceutical drugs, respective changes must be made to the register by MOH without conducting an economic analysis of the price and without FAS's involvement. It is worth noting that, in late 2015 – early 2016, pharmaceutical companies ran into difficulties when MOH refused to register such changes without FAS approval, while FAS itself kept refusing to issue such approval on the ground that it is not required by law.14

MOH recommendations on the scope of pre-clinical and clinical trials of medicines and on other matters relating to the registration of medicines

MOH letter dated March 12, 2016 (ref. No. 20-2/10/1-1040) contains MOH's recommendations in relation to:

  • the scope of pre-clinical trials of:
    (a) an innovative pharmaceutical drug for medical use;
    (b) a pharmaceutical drug for medical use in a prolonged release dosage form;
    (c) a pharmaceutical drug for medical use in one and the same dosage form, but in a different dosage;
    (d) a new combination of a pharmaceutical drug for medical use;
  • the scope of clinical trials of a pharmaceutical drug for medical use from the group of water-soluble vitamins;
  • the scope of pre-clinical and clinical trials:
    (a) of a biotech pharmaceutical drug for medical use being manufactured at a new production site;
    (b) when changes are made to the composition of a biotech pharmaceutical drug for medical use (addition of a preservative);
  • the set of documents when submitting medicinal product samples;
  • the scope of the stability testing results when registering a pharmaceutical drug or including a pharmaceutical substance in the state register of medicinal products;
  • the possibility of using a "quick aging" method to determine the expiration date of a medicinal product;
  • the scope of the information required to confirm the storage capabilities of reconstituted and diluted sterile pharmaceutical drugs;
  • the scope of trials on the quality characteristics required to make changes for the purpose of replacement of the seasonal strain of a flu vaccine;
  • the parameters by which, when studying the immunological potency of a biotech drug, the antibodies produced in response to the introduction thereof are to be distinguished.

Also set forth were the basic requirements imposed on pharmaceutical drugs for medical use / pharmaceutical substances and samples of substances used for drug quality control by comparing with the test drug.

FAS clarifications on drug interchangeability by form of presentation (in Russian, forma vypuska)

In its letter No. AK/77356/15 of December 23, 2015, FAS, using the customer requirements for the purchase of the drug Moxifloxacin as an example, pointed out the difference between the concepts of

  • pharmaceutical form (in Russian, lekarstvennaya forma) – the form in which a pharmaceutical is produced and which determines the means of introduction and use of such pharmaceutical and causes the desired therapeutic benefit to be achieved (drops, solution for injection, etc.); and
  • form of presentation (in Russian, forma vypuska) – packaging (vials, containers, etc.).

Since the form of presentation does not affect the therapeutic effect of a drug, drugs that are similar in terms of INN, pharmaceutical form, and dosage must be viewed as interchangeable, regardless of the form of their presentation. FAS has specifically drawn attention to the fact that imposing requirements as to technical features not affecting the therapeutic qualities of a pharmaceutical without the possibility for supply of an equivalent could lead to restraint of competition and an unwarranted reduction in the number of procurement participants.

FAS on using the word "fast" in advertising for medicinal products15

The expert panels on advertising and healthcare at FAS have adopted a decision prohibiting the use of the word "fast" (bystry) in advertising of medicines if there is no documented evidence to that effect. Such advertising may be recognized as false and misleading. The corresponding administrative sanctions are stipulated under part 1 of Article 14.3 (Violation of the laws on advertising) of the Code of Administrative Offenses of the Russian Federation, in the form of a fine on officials from 4,000 to 20,000 rubles, and on legal entities – from 100,000 to 500,000 rubles.

Miscellaneous

Chamber of Commerce and Industry is planning to extend the period of validity of ST-1 certificates16

The Chamber of Commerce and Industry of the Russian Federation (the "RF CCI") is drafting amendments to the documentation governing the procedure for the issuance of ST-1 certificates. For pharmaceutical drugs, the primary such document is the "Regulation on the procedure for the issuance of certificates of origin of goods on form ST-1 for the purposes of central and local government procurement (for pharmaceutical drugs included on the list of vital and essential drugs)," approved by RF CCI Order No. 93 of December 21, 2015. The certificate on form ST-1 is the certificate of origin of goods; it is planned to extend the period of validity thereof from the current six months to one year.

It is expected that the planned changes will also touch upon other difficulties pertaining to obtaining an ST-1 certificate, including the mandatory production site inspection issue and the issue of RF CCI's ad valorem share calculation.

Concept adopted for the state information system to monitor the movement of pharmaceuticals (the "System")

The concept was approved by MOH Order No. 866 of November 30, 2015.

The System is being created with the aim of setting up continuous monitoring of the movement of pharmaceutical drugs from the manufacturer to the end consumer using individual and batch encoded labeling. The System must provide all market participants with the ability to record operations for the movement of pharmaceutical drugs at all stages of their circulation (manufacturer – wholesaler – pharmacy or medical organization – sale to the end consumer). It is expected that the System will be used to monitor the expiration dates of pharmaceutical drugs in circulation, to monitor the withdrawal from circulation of poor-quality, adulterated, and unregistered pharmaceutical drugs, and for other informational and oversight functions.

It is expected that development of the minimum required System functionality and pilot launch thereof will be carried out by October 31, 2016. The System is expected to be fully operational as from January 1, 2019.

Footnotes

1. As from January 1, 2017, the corresponding articles of the Federal Law on Amending the Federal Law on the Circulation of Medicines (No. 429-FZ of Dec. 22, 2014) come into effect, according to which confirmation of the registration of foreign medicinal products again requires a statement of conformity to GMP issued by a Russian authority.

2. http://www.kommersant.ru/doc/2902728

3. The Federal Law on Fundamental Principles of Public Health Protection in the Russian Federation (No. 323-FZ of Nov. 21, 2011)

4. Introduced by RF Government Resolution No. 58 of February 3, 2016

5. The Federal Law on Narcotic Drugs and Psychotropic Substances (No. 3-FZ of Jan. 8, 1998)

6. http://www.pharmvestnik.ru/publs/lenta/v-rossii/ekspert-edinyj-rynok-lekarstv-ne-zarabotaet-poka-ne-budut-snjaty-vse-raznoglasija-mezhdu-stranami.html#.VwpoS1hf0dU
http://www.pharmvestnik.ru/publs/lenta/v-rossii/timofej-nizhegorodtsev-fas-stoit-nasmertj-v-voprose-vzaimozamenjaemosti-lekarstv.html#.VwpoWFhf0dU

7. http://fas.gov.ru/press-center/news/detail.html?id=45160

8. http://gmpnews.ru/2016/03/vozbuzhdeno-delo-o-kartele-pri-provedenii-aukcionov-na-postavku-ls/

9. Press release on the FAS website – http://fas.gov.ru/press-center/news/detail.html?id=44996

10. http://www.rosbalt.ru/federal/2016/02/04/1486605.html

11. Circulation of adulterated, poor-quality, and unregistered medicinal products and medical goods and the circulation of adulterated bioactive supplements

12. Rospotrebnadzor Order No. 631 of July 29, 2015, "On state registration certificates for bioactive supplements"

13. FAS Russia Letter No. IA/10439/16 of Feb. 19, 2016; Letter of the Economic Development Ministry of Russia No. 6723-EE/D28i, Industry and Trade Ministry of Russia No. TsS-14384/19, MOH No. 25-0/10/2-1416, and FAS Russia No. ATs/15615/16 of Mar. 14, 2016

14. https://www.vedomosti.ru/business/articles/2016/02/09/627903-farmproizvoditeli-reestr

15. http://fas.gov.ru/press-center/news/detail.html?id=44675

16. http://www.pharmvestnik.ru/publs/lenta/v-rossii/srok-dejstvija-sertifikata-st-1-budet-uvelichen.html#.VwuRPlhf1ol

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