[co-authors: Natalia Spitsyna, Natalia Spiridonova]
The COVID-19 pandemic has impacted every industry, causing global economic changes and, consequently, extensive legislative amendments. There are no doubts that the pharmaceutical industry is the most affected. Since the spread of COVID-19 in Russia started later than its spread in most other European countries, the Russian Government has only recently started elaborating measures in response to the outbreak, and now the situation is developing swiftly. In this analysis, we describe the most important legislative amendments affecting the pharma industry to-date.
General governmental COVID-related restrictions and their impact
In Russia general governmental COVID-related restrictions introducing the quarantine regime have been implemented. The restrictions include closing land borders, cancellation of regular and charter international flights, which inevitably resulted in an increase of delivery periods of drugs and medical devices from the foreign countries.
The other measure is empowering local authorities to restrict freedom of movement and, consequently, freedom of trade if they consider necessary. In Moscow and some other regions of Russia high-alert regime was introduced. In addition, the Russian President has declared that five weeks (starting from the 28 March 2020 until the end of April 2020) to be non-working in Russia.
Once announced, it has created uncertainty whether drugs manufacturing and drug selling entities can continue operating. The issue was clarified once the production and sales of drugs were considered to be part of the life supporting activity. It means that, despite the introduced quarantine measures and declared non-working weeks, the pharma industry activity is not frozen. The drugstores are remained open as well.
Specific governmental measures targeting the pharma industry
The law granting the Russian Government the right to set maximum selling prices
On 26 March 2020, the law granting the Russian Government the right to set maximum selling prices, wholesale and retail increments for drugs and medical devices was adopted.
The Russian Government will regulate the prices in case:
- there is a threat of spread a disease that constitutes a threat to others,
- it has been revealed during prices monitoring that prices have increased unreasonably in several regions by more than 30 percent within 30 days,
- or in an emergency situation.
Such restrictions may last no longer than 90 days.
Earlier it was possible to set maximum selling prices, wholesale and retail increments only for drugs included in the List of Vital and Essential drugs and only for several types of medical devices.
The order of establishing such maximum selling prices, wholesale and retail increments shall be determined by the Russian Government.
The incentive for enacting this law was an increase of the prices to protective masks and respirators in several drugstores in March 2020. The amendments' aim is to limit the price increase for drugs and medical devices of first need in the pandemic situation.
Online sale of over-the-counter drugs
The Russian President's Order No. 187 of 17 March 2020 and Federal Law No. 105-FZ of 3 April 2020 were adopted with the aim to legalize online sale of over-the-counter drugs.
To sell over-the-counter drugs online, the pharmacy should have:
- license for pharmaceutical activity, and
- special permission of Roszdravnadzor (i.e., the Federal Service for Supervision in the Sphere of Healthcare).
The procedure of obtaining the mentioned permission of Roszdravnadzor has not been established yet.
However, due to the absence of detailed regulation many pharma industry's concerns regarding online sale of drugs remain unresolved, including (1) who can deliver the drugs to the customer (e.g., should it be a courier with a specialised medical education or any person), (2) should the delivery territory be limited to the territory where the licensed pharmacy operates, and (3) how should compliance with and protection of consumer rights and quality control be ensured with respect to the drugs sold online.
Tightening administrative and criminal liability for sale of counterfeit and substandard drugs
Administrative and criminal liability established for sales including online sales of 1) falsified, counterfeit, defective or unregistered drugs or 2) falsified, counterfeit or defective medical devices, or 3) falsified dietary supplements (biologically active additives containing pharmaceutical substances not declared during state registration) has been tighten by the Federal Law No. 89 of 1 April 2020 (paragraph Art. 6.33 (3) of the Code of Administrative Offenses of Russia, Art.238.1 (1.1) of the Criminal Code of Russia).
The tightened liability includes the administrative fine in the amount of up to Russian Ruble 6,000,000 (approx. USD _81k) or administrative suspension of activity for up to 90 days. Criminal liability is envisaged in the form of fine, imprisonment up to 6 years or compulsory labors of up to 5 years of with deprivation of the right to occupy certain positions or engage in certain activities for a period of up to 3 years.
Such more severe administrative and criminal liability is envisaged in order to mitigate the risks caused by the newly introduced permission of online sale of over-the-counter drugs.
Zero rate of import duty for goods preventing the spread of COVID-19
The decision of the Eurasian Economic Union (EAEU) Commission's Council exempting from import customs duties the goods imported to prevent the spreading of COVID-19 was adopted on 16 March 2020.
This decision applies first of all to personal protective equipment, disinfectants, diagnostic reagents, certain types of medical equipment and materials. The goods for controlling COVID-19, protecting and treating the population will be imported with exemption from import customs duties based on the intended purpose confirmed by national competent public health authorities.
The decision applies to the goods imported into the customs territory of the EAEU during the period from 16 March 2020, and will be valid until 30 September 2020.
A simplified procedure of marketing authorization for medical devices
A simplified procedure of obtaining marketing authorization (i.e., state registration) has been established for several medical devices by Order of the Russian Government No. 299 of 18 March 2020.
The simplified procedure applies to marketing authorization of different types of medical uniform (protective clothes, coats), masks, gloves, shoe covers, and respirators. The simplified procedure allows obtaining marketing authorization without provision results of any trials and tests. If no request is issued by Roszdravnadzor (i.e., a state authority issuing marketing authorization for medical devices), the marketing authorization will be issued within 5 business days after the receipt of required documents.
At the same time, an applicant for marketing authorization should complete technical tests, toxicological studies and clinical trials of the medical devices regarding which marketing authorizations have been obtained under the simplified procedure after receipt of the marketing authorization. Thus, the results of the mentioned tests and trials are to be provided to Roszdravnadzor within 150 business days after receipt of marketing authorization. Roszdravnadzor conducts examination of quality, effectiveness and safety of the medical device based on received results and confirms or cancels the respective marketing authorization.
A simplified procedure of marketing authorization (state registration) has been established for 36 types of medical devices, including medical masks and respirators.
A simplified procedure of marketing authorization for drugs
The Russian Government by Decree No. 441 of 3 April 2020 established the specific procedure for obtaining marketing authorization (i.e., state registration) of drugs that is intended for use in conditions of war, emergency situations, prevention and treatment of diseases that pose a danger to others, diseases and injuries resulting from exposure to adverse chemical, biological, and radiation factors, and that are developed among other things based on the instructions of certain state authorities.
The marketing authorisation application and supplementing documents may be provided in the electronic form to the Russian Ministry of Healthcare. Moreover, the risk-benefit assessment studies for a drug may be conducted in a simplified procedure.
The Decree of the Russian Government will be in force until 31 December 2020.
No VAT for essential medical devices
Essential medical devices (e.g., personal protective equipment) imported to the territory of the Russian Federation as part of the fight against the spread of COVID-19 are exempted from value-added tax (Link).
Changes in state procurements
Until 31 December 2020 inclusive, the Russian Government may establish additional cases of state procurement from a single supplier as well as determine the respective procedure (Link).
Telemedicine-related legislative initiatives
Since self-isolation is being practicing in many regions of Russia, currently there is strong demand for online health care services.
It is worth noting that officially telemedicine services started to develop in Russia in 2018, when Federal Law No. 242 of 29 July 2017 ("The Law on Telemedicine") came in force. The Law on Telemedicine granted medical organizations (who obtained license for pharmaceutical activity) the right to provide several medical services online, in particular, to conduct consultations and monitor the patient's health status. However, the Law on Telemedicine does not allow diagnosing patients based on online communication only.
COVID-19 spread has caused some initiatives to expand the area of telemedicine. First of all, providing a medical organization with an opportunity to diagnose patients and prescribe treatment. The respective bill was filed with the State Duma in March 2020 and has already passed the 1st reading. Also, many organizational measures are taken to promote telemedicine in Russia. In particular, the authorities of Moscow city launched a pilot project on the use of telemedicine in 2 health clinics in 2018 and organized a telemedicine service for patients who are treated with coronavirus infection at home. Also, several days ago, the authorities of the Khanty-Mansi Autonomous Region of Russia have launched a pilot project on the use of telemedicine for the treatment of patients with chronic diseases.
However, the concerns regarding telemedicine (e.g., personal data security) are remained and the practice will show how they will be addressed.
Since the situation in Russia is rapidly developing and new laws and regulations are enacted almost every day, we strongly recommend closely monitoring the situation. Upon your request, we will be glad to provide a more detailed update regarding measures taken by the Russian Federation in response to COVID-19 outbreak and respond to the specific questions.
[View source.]
