Russia Pharmaceuticals Sector Update - September 2020

Government approves regulations on granting organisations subsidies to partially reimburse expenses incurred in connection with product certification and homologation in foreign markets

Resolution No 1007 of the Government of the Russian Federation “On Public Funding for Organisations to Partially Reimburse Expenses Incurred in connection with Product Certification and Homologation in Foreign Markets” of 8 July 2020 came into force on 26 July 2020.

Such subsidies can be claimed by pharmaceutical companies manufacturing products for export. This supportive measure covers reimbursement for (1) product certification (testing product samples, inspecting (audits, qualifications) manufacturing sites and processes for compliance with the regulations and laws of the potential importing country, product certification in foreign markets, etc.), and (2) bringing products into line with the requirements of a target market (homolagation) (R&D adjustments in design and technical documents, R&D product modifications (creation of new designs), testing prototypes, product certification in foreign markets, etc.).

Subsidies are granted provided that the value of the exported products specified in a relevant customs declaration or the value of products to be exported in accordance with obligations assumed by the company and within three years from the date of a relevant Agreement on Subsidies and Countervailing Measures is ten times the amount of the subsidy.

The regulation provides for refunding up to 80% of exporters’ costs incurred in connection with the certification of products to be commercialised in foreign markets and up to 50% of manufacturers’ homologation costs. The maximum subsidy for a financial year amounts to RUB50 million for certification and RUB100 million for homologation, with 7% of budgetary commitment limits allocated to the pharmaceutical and light industries.

A similar supportive measure was sought by exporters and proved to be efficient back in 2017 and 2018. This governmental support is believed to facilitate companies’ entry into foreign markets and to help Russian companies in connection with restrictions imposed in response to the pandemic.

Change in the procedure of including medicines in the list of essential medicines

On 12 August 2020 the head of the Russian Government signed off the resolution that modified the rules relating to the implementation and maintenance of the list of so called “essential medicines.” Now medicines intended for the treatment and prevention of diseases that present a danger to the public will be more quickly included on the list of essential medicines. Representatives of the government believe that the changes will make these medicines more accessible to the public, as the prices for essential medicines are state regulated and such medicines are provided to certain categories of patients free-of-charge.

From now on, the accelerated inclusion of medicines treating dangerous diseases on the list of essential medicines will be in place when an emergency situation regime is officially declared, or when the threat of the spread of dangerous diseases emerges. In those situations the Ministry of Health will be able to promptly introduce such medicines to the government commission for inclusion on the list of essential medicines without following the usual, more lengthy, procedure for approvals (which can take several months). Afterwards, the government commission will promptly move to agreeing the fixed price for essential medicine with the medicine’s manufacturer.