A meeting of the Healthcare committee with participation of the ARPM and pharmaceutical and law companies took place in the office of the Franco-Russian Chamber of Commerce. ARPM Director general, Victor Dmitriev gave a speech on new state regulations and main trends of the pharmaceutical market in 2017.
“Improvement in relations between Russian and the U.S. seems to be a possible future, and therefore, this will positively affect the Russian pharmaceutical market as well. Pharmaceutical company Abbott which has allocated some of its production in Russia us the first evidence of the new trend. The volume of U.S. investment will only increase and will become a serious competition for European investors,” suggested Mr. Dmitriev.
Mr. Dmitirev also mentioned the recently launched pilot project on labeling medicines, with respect to Governments act №62. “It is hard to say how the pilot will evolve, however, there are certain deadlines by when Health Ministry and Ministry of Industry and Trade must report on the results, risks and benefits, and cost. Pharmaceutical companies estimate the cost of implementing the labeling technology differently. Stada projects increase the cost of the single package by 20 kopeks. Other companies announced 20% increase, however, this number is wrong because the cost of placing a label on a package does not vary depending on the cost of the drug production. The main concern is the profitability of production of drugs from the lowest price segment. For these drugs, the price of labeling can indeed reach 20% of production cost. Secondly, we should keep in mind that a lot of producers of medicines from the lowest price segment are companies that have its history from the Soviet Union, and implementation of modern labeling technologies is quite difficult due to limit of space,” said Mr. Dmitriev.
ARPM Director General also spoke about other initiatives of the Federal Executive Bodies. According to Mr. Dmitirev, the compulsory licensing, a law proposed by the Federal Antimonopoly Service, is a necessary measure, but it requires a strictly regulated application. “It is important to clearly define in the law when the mechanisms of compulsory licensing are to be used, what compensation will be given to a patent holder, and what criteria is used to chose a company to produce products based on the compulsory licensing. These questions should be answered in a timely manner.”
Another topic mentioned by Mr. Dmitirev was the meeting at the Ministry of Industry and Trade where the agenda of special investment contracts was discussed. “The special investment contract is a measure to bring investments to the industry. The only aspect that is fully guaranteed by the contract is a preferential tax exception for a particular time period. However, many companies that come to Russia are interested in getting a status of a local producer. ARPM is ready to support granting the status of a local producer to a company that brings a medicine that is not produced in Russia starting from signing a contract. However, if a company want to produce a generic that is already produced in the country, we are against granting the status in this case.”
Head of the pharmaceutical, medical and biotechnological practices of the Moscow office of Dentos, Anna McDonald and Mr. Dmitriev also discussed future of online sales of pharmaceutical goods. According to Mrs. McDonald, the amendments to Federal law 61, which aimed to legalize distant sales of pharmaceutics is already at the state of negations in the Russian President’s Office. The estimated date for approval is October 2017. Mr. Dmitirev said that the steps to Internet sales should be taken very seriously. Otherwise, Russia could make the same mistake the U.S. did when all counterfeit were sold online.
In conclusion, Mr. Dmitriev invited all to participate a joint conference of ARPM and AIPM “State regulation and the Russian pharmaceutical industry” where issues of the Eurasian Economic Union market, as well as other current topics of the industry, will be discussed.