Method of Price Registration in Russia

| By | FAS Russia, Pricing, Russian Pharma

The state policy on medicine and medical products circulation was discussed at the XI All-Russian Congress of the Pharmaceutical and Medical Industries.

Unfortunately, current trend is to tie all issues in the pharmaceutical industry with regulating medical prices”, started her speech Deputy Head of FAS Department for Control over Social Sphere and Trade, Nadezhda Sharavskaya. She pointed out that “competences of the pharmaceutical companies are formed today based on the artificial media hype rather than the valid and the RIA projects”.

As an example, Nadezhda Sharavskaya gave a recent publication that “Takeda” allegedly refused to supply three medicines from the list of vital and essential ones due to unprofitability associated with new price registration rules. The pharmaceutical manufacturer, though, officially notified FAS that the “decision to terminate supplies of these medicine is determined by a global review of company’s product portfolio and the need to reequip production to produce other medicine” rather than state regulation of prices.

As pointed out by the speaker, companies that complain about the new method resulting in unprofitable supplies of medicine to the Russian market, voluntarily register medicine prices at the level 20 times lower than the new method allows. It confirms that companies have considerable margin in terms of domestic investments.

Discussing the current method of price registration, Nadezhda Sharavskaya said that it does not increase the pressure upon pharmaceutical companies and on the contrary simplified price registration and application filing, which reduced considerably the number of FAS enquiries and practically nullified refusals to approve draft prices. The decreasing factor is reduced significantly for the medicine that cost under 20,000 RUB. Preferences were introduced for the medicine in the cheap price segment, domestic medicine, first generics and bioanalogues. The system of price registration for cheap medicines up to 500 RUB and domestic reference medicines practically became declarative. The list of reference countries is reduced nearly twofold. With introduction of the new method, possibilities of price indexation for domestic medicine are expanded.

Regarding a proposal to consider the average price in three reference countries rather than the lowest price across the reference countries, Deputy Head of FAS Department for Control over Social Sphere and Trade explained: “Under the new method the list of reference countries is reduced twofold. The countries with the lowest prices are excluded. Thus, it is not the lowest prices that are the guidance for us. Also, we see in practice, that medicines are not sold in all reference countries but often in only 2-3 countries from the list. Taking into account prices form three countries rather than the minimum price will overrate prices for imported drugs, which will discriminate Russia in comparison with other countries, complicate price estimating and increase the registration timeline. Currently prices can be reviewed if the minimum price reduced event more in the reference countries. The proposed scheme to consider three countries will mean ongoing reconsideration, which will increase the burden both on companies and the regulators”.

Answering the question why the draft law does not set the frequency of price reduction by producers once per year, Nadezhda Sharavskaya explained that “price reduction in the reference countries is made by manufacturers at their own initiative. There are adequate timeframes to file applications for price reduction in Russia, they are comfortable for manufacturers. The draft law also allows upselling of medicine that are in circulation at the earlier registered prices. If the norm is formalized to reduce medicine prices no frequently than once per year, the population and the budget system will be forced to incur unreasonable losses during 1-2 years, while in other reference countries for Russia the same medicine will be sold at a lower price. Our position is that the people of Russia should be able to get medicine at the prices no higher than in the reference countries”.

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