New price controls for life-saving and essential medicines have been introduced by the government.

Most of the key changes become effective from the 01 January 2010.

The key changes include:

  • a significant increase in overall controls over pricing
  • the introduction of new procedures and requirements
  • a requirement for manufacturers to register or re-register by 1 March 2010 their maximum sale price for each of the life-saving and essential medicines on the official list under a new procedure
  • a requirement for maximum retail and wholesale margins to be imposed by the Russian Regions under a new procedure
  • compliance with these requirements will form part of the necessary conditions for obtaining and renewing manufacturing and pharmaceutical licences

Manufacturers' maximum prices

Manufacturers must follow a new registration process, with sanction for non-compliance or submitting false information. Prices must be registered in Russian roubles from 1 January 2011. A commission to resolve price registration disputes is being set up from 1 October 2009, with a right of appeal to the commission and/or court.

The price-setting methodology is to be developed and approved within 4 months by the Ministry for Public Health and Social Development (MoH) in cooperation with other related ministries. Further details will be released by the ministry in due course.

Wholesale and retail margins

A new procedure is being developed for adopting maximum retail and wholesale margins, which the Russian Regions must follow within 30 days of its approval. Both retail and wholesale margins must be calculated on the basis of the manufacturer's price and must take into account location, transport accessibility and other region-specific factors.

There is also a detailed procedure for wholesalers and retailers to apply the maximum margins, and a requirement for them to hold a 'price protocol' document in the prescribed form.

Controls

In two months' time, the MoH will start monitoring actual prices and volumes for all drugs on the list of life-saving and essential medicines.

Prices are subject to monthly monitoring, for Russian manufacturers by the bodies in charge of state statistics and for foreign manufacturers by the Federal Customs Service. An electronic database will also be created to facilitate monitoring by the Federal Service of Supervision in Public Health and Social Development (Roszdravnadzor).

Importers seeking import licences customs clearance for drugs on the list must also provide information on the actual foreign manufacturer's price, as well as documents confirming that it has been registered.

The MoH has also produced draft legislation (draft Law On Medicines Turnover) containing significant strengthening of pricing controls which, after any Government amendments have been made, is expected to be introduced to the State Duma in autumn 2009.

This is broadly in line with the measures introduced by the Resolution but also proposes the introduction of a complete ban on the sale of the drugs on the list whose manufacturer's prices has not been registered. It also proposes the cancellation of any manufacturer's price registrations and maximum margin approvals if they are not in line with the approved methodologies.

Law: Resolution No 654 of the RF Government dated 08 August 2009 "On development of the government control over the prices on life-saving and essential medicine"

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

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The original publication date for this article was 16/09/2009.