“Percentage” preferences will provide incentives to localize manufacturing

| By | Drug Procurement, FAS Russia, Full-cycle Production

Speaking at the meeting with the representatives of the German Federal Ministry for Economics Affairs and Energy, and the Russian-German Chamber of Foreign Trade, Rachik Petrosyan, the Deputy Head of the Russian Antimonopoly Service (FAS), said that his agency views the presence of foreign suppliers as a tremendous benefit for the Russian market. He mentioned the case of a project to implement a three-stage competitive procedure in the procurement of drugs for public needs. According to the initial plan received by FAS from the Ministry of Industry and Trade of Russia, the admission to procurement will be restricted only to the bids from suppliers with a full-cycle production in Russia (manufacturing of substances, finished dosage forms, primary and outer packaging, and release testing). Under the draft procedure, all other bids, even those providing for a substantially lower price of drugs, must be rejected by the customer.

“FAS supports the idea of granting preferences to domestic manufacturers of pharmaceutical substances for drugs, but the agency does not quite agree with the proposed approach. In the procurement of drugs, one cannot ignore the potential budget savings provided by selection of specific supplier. If the benefit of concluding a contract with a supplier, that does not have a full-cycle production cycle in Russia, exceeds, let’s say, 20-25 percent, such budget savings should not be rejected. Granting “percentage” preferences to Russian manufacturers of drugs will provide incentives to localize the manufacturing in our country and preserve the competition in the market,” said Rachik Petrosyan.