Russia. Pricing Regulation on Medicines and Medical Devices Has Changed

On 8 March 2015 the President signed two federal laws to strengthen the government role in regulation of prices for medicines and medical devices.

Federal Law No. 33-FZ amends Article 80 of the Federal Law on Fundamentals of Citizens’ Health Protection in the Russian Federation. Federal Law No. 34-FZ amends Article 61 of the Federal Law on Circulation of Medicines.

In general, the amendments are as follows:

Medical devices

1. For the first time, maximum supply producer prices for medical devices to be implanted into the human body during provision of free medical care under the state free medical care guarantee program and the maximum volume of wholesale and retail markups for such medical devices shall be determined (a list of such devices has been approved by Government Decree No. 2762-р dated 29 December 2014). 
2. Roszdravnadzor (the Federal Service for the Supervision of Public Health and Social Development) will exercise state registration of maximum supply producer prices for such medical devices, information on which will be included in a special register.
3. Prices for such medical devices shall be calculated using a special methodology that the Government of the RF will develop and approve. 
4. The methodology is supposed to balance the interests of medical device consumers and producers, the actual supply prices for medical devices in the Russian Federation, importation prices, prices for similar medical devices in Russia, medical device producers’ expenses for manufacturing and sale of medical devices and these devices’ required profitability. As for prices for foreign medical devices, the methodology should balance what they cost in their countries of origin, in the countries where they are registered and (or) the countries where they are supplied.
5. These amendments shall take effect within 60 days from the date the Law is published. 

Government regulation of medical device prices will apply only to medical devices covered by Government Decree No. 2762-р dated 29 December 2014 and exclusively when providing free medical care under the state free medical care guarantee program. This list includes 205 types of medical devices which, according to some reports, comprises 22.7% of all medical devices that are implanted into the human body.

Medicines
The power of the Government of the RF to determine peculiarities of regulation of maximum supply producer prices for drugs on the Essential Drug List (“EDL”) will be granted on 16 March 2015, a few months earlier than originally planned. The Government will be entitled to change pricing regulation on a relevant market depending on economic or social criteria. It is expected that in accordance with high priority measures to ensure sustainable development of the economy and social stability in 2015 the Government will index lower segment prices for medicines on the EDL. Afterwards, the Government will probably prepare amendments to the pricing methodology.

Source: EY Russia