Russia. Pharmaceutical Market Access and Regulations 2014

PhRMA and its member companies operating in Russia face numerous market access barriers in Russia, especially in government procurement and discriminatory price registration. PhRMA‘s members are also concerned that the Russian Government is implementing policies that do not adequately protect intellectual property or reward the value of innovation and the benefits it brings to Russian patients.

Key Issues of Concern:

Regulatory data protection: On August 22, 2012, Russia officially acceded to the World Trade Organization (WTO). Russia‘s commitments on regulatory data protection embedded in the ―Law on the Circulation of Medicines‖ are an integral part of Russia‘s WTO obligations and came into force on the date of Russia‘s WTO accession. PhRMA and its member companies welcome this, but are concerned that the ―Law on the Circulation of Medicines‖ and other applicable regulations still contain mechanisms that are contrary to, or do not effectively implement, regulatory data protection consistent with Russia‘s WTO obligations.

Effective patent enforcement: Currently, there is no mechanism in place to ensure that the patent status of a drug is taken into consideration by marketing or other regulatory authorities in Russia when considering the approval of a generic substitute to a patented drug. This in turn has led to the approval and marketing of a generic product, despite the fact that a patent for the original drug is still in force. In addition, pharmaceutical innovators in Russia continue to face significant legal and practical challenges that limit their ability to effectively protect their innovative products against infringement, including the ability to secure remedies and injunctions that would reduce the risk of premature entry of infringing generic products to the Russian market.

Government pricing: The Russian Government controls prices of drugs on the Essential Drugs List (EDL). Unfortunately, local and foreign manufacturers are treated differently in that respect, according to Russia‘s Law on the Circulation of Medicines. Generally speaking, local companies (including those who package their drugs in Russia) are able to adjust prices on an annual basis, while foreign firms are not. Furthermore, the EDL was not updated in 2012 or 2013. In fact, according to the Russian Government‘s Decree no. 2199-r (December 19, 2013) the EDL effective in 2012 and 2013 shall continue to be effective in 2014. This will impede Russian patient access to innovative medicines.

Government procurement: In 2013, Russia‘s Industry and Trade Ministry drafted government regulations, which, if implemented, would severely limit access of foreign pharmaceutical manufacturers to public procurement of drugs and medical equipment.

Local clinical trial requirements: According to the ―Law on the Circulation of Medicines‖ governing, inter alia, clinical trials, pre-registration clinical trials must be conducted in Russia (with some exceptions). The corresponding practice has caused significant delays in the registration of new products, thus limiting patient access to innovative medicines.

For these reasons, PhRMA requests that Russia be placed on the Watch List for the 2014 Special 301 Report, and that the U.S. Government continue to seek assurances that the problems described herein are quickly and effectively resolved.

Intellectual Property Protections

Regulatory Data Protection

As part of its accession to the WTO in August 2012, Russia committed to provide a six-year period of regulatory data protection (RDP) for undisclosed information submitted to obtain marketing approval for pharmaceuticals in accordance with Article 39.3 of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS):

The representative of the Russian Federation confirmed that the Russian Federation had enacted legislation and would adopt regulations on the protection of undisclosed information and test data, in compliance with Article 39.3 of the WTO TRIPS Agreement, providing that undisclosed information submitted to obtain marketing approval, i.e., registration of pharmaceutical products, would provide for a period of at least six years of protection against unfair commercial use starting from the date of grant of marketing approval in the Russian Federation. During this period of protection against unfair commercial use, no person or entity (public or private), other than the person or entity who submitted such undisclosed data, could without the explicit consent of the person or entity who submitted such undisclosed data rely, directly or indirectly, on such data in support of an application for product approval/registration. Notice of subsequent applications for registration would be provided in accord with established procedures. During the six year period, any subsequent application for marketing approval or registration would not be granted, unless the subsequent applicant submitted his own data (or data used with the authorization of the right-holder) meeting the same requirements as the first applicant, and products registered without submission of such data would be removed from the market until requirements were met. Further, he confirmed that the Russian Federation would protect such data against any disclosure, except where necessary to protect the public or unless steps were taken to ensure that the data were protected against unfair commercial use. (1) 

(1) Source: Report of the Working Party on the Accession of the Russian Federation to the World Trade Organization, WT/ACC/RUS/70, WT/MIN(11)/2 (Nov. 17, 2011), at para. 1295, incorporated in Protocol on the Accession of the Russian Federation, WT/MIN(11)/24, WT/L/839 (Dec. 17, 2011), at para. 2

Russia‘s commitment to six years of RDP is embedded in Article 18.6 of the Law on the Circulation of Medicines:

The results of the nonclinical trials of medicinal products and clinical trials of medicinal products submitted by the applicant for state registration of the medicinal products shall not be obtained, disclosed, used for commercial purposes and for purposes of state registration without applicant's permission within six years from the date of the state registration of the medicinal product. 

Violation of the prohibition specified by this Clause shall entail the responsibility in accordance with the legislation of the Russian Federation. 

The circulation of medicines in the Russian Federation registered with violation of this Clause shall be prohibited. (2)

(2) Source: Federal Law No. 61-FZ, ―Law on the Circulation of Medicines‖ (Apr. 12, 2010).

A mechanism is needed in Russia to ensure that patent issues can be resolved before infringing pharmaceutical products are launched on the market. Currently, there is no effective mechanism for otherwise enforcing an innovator‘s patent rights vis-à-vis regulatory approval of generic substitutes or biosimilars. Generic drug manufacturers can apply for and receive marketing approval for a generic product despite the fact that a patent for the original drug is still in force.

Further, pharmaceutical innovators face significant legal challenges that limit their ability to effectively protect their innovative products against infringement, including the ability to secure remedies, such as injunctions, that would reduce the risk of premature market entry by infringing generic products. Innovators face significant barriers to obtaining preliminary injunctions to prevent infringing products from entering the market because the Arbitration Procedural Court does not, in practice, grant preliminary injunctions to patentees in pharmaceutical patent infringement cases. Unreasonable court delays also deprive patent holders of relief in a timely manner even if injunctions were practicably available. As a result, PhRMA member companies have not been able to resolve patent disputes prior to marketing approval being granted to infringing generic products, leading to injury that is rarely compensable.

To avoid the unnecessary costs and time of litigating damages claims in patent litigation, and to increase market predictability, Russia should enable patent holder companies to file patent infringement suits before marketing authorization is granted for follow-on products and afford sufficient time for such disputes to be resolved before marketing occurs. This might include a form of automatic postponement of drug registration approval pending resolution of the patent dispute, or for a set period of time.

Mislabeled Herbal Supplements

Medicinal products marketed as herbal supplements containing only natural ingredients have been found in testing to contain one or more active pharmaceutical ingredients, some of which are still patent protected in Russia. These falsely labeled and marketed products can be purchased without a physician‘s prescription, endangering public health but also violating the patent holders‘ intellectual property rights. Russian authorities have been informed of the situation, yet fail to appropriately regulate such products, and allow them to remain in the market and available to consumers.

Source: PHARMACEUTICAL RESEARCH ANDMANUFACTURERS OF AMERICA(PhRMA)SPECIAL 301 SUBMISSION 2014