T. Nizhegorodtsev: Possibilities of the pharmaceutical market depend on the national medical law

| By | FAS Russia, pharmaceutical market
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Head of FAS Department for Control over Social Sphere and Trade discussed competition development in the pharmaceutical markets in Russia and the CIS

Speaking at the workshop for staff of competition authorities – “Competition in the pharmaceutical markets” on 26 March 2019, Timophei Nizhegorodtsev informed that today competition on the pharmaceutical markets of the CIS member-states is underdeveloped. The difficulties of developing competition in the pharmaceutical markets of the CIS member-states to a considerable extent are explained by significant and not always efficient government regulation of the medicines market, a big share of the state as an economic subject on these markets. The conflict of interests in pharmaceutical market regulation creates discriminatory conditions for various market participants.

“Possibilities of the pharmaceutical market depend on the national medical law”, stated the speaker.

He discussed substitutability of medicines:

While in many countries in the world medicines with the same International Non-Proprietary Name are recognized as substitutes, the situation in Russia is different.

The concept of drug substitutability was introduced in the national law in medicine circulation and a regulatory framework is formed for establishing the institute of medicine substitutability in Russia. At the same time, the introduced substitutability institution for the medicine registered in Russia is maintained for the common drug market of the Eurasian Economic Union.

FAS representative said: “Nevertheless, the list of equivalent medicine presentations has not been compiled in Russia, which allows unfair public and municipal customers to specify requirements supplying particular medicine presentations, rejecting presentations with equivalent therapeutic effects”.

The speaker discussed relations between pharmaceutical companies and medical doctors, which supports demand for medicine and is one of the market entry barriers and a reason for eliminating competition at tenders, and infringes the patient rights who are imposed similar albeit more expensive medicine.

As one of the sectoral issues, Timophei Nizhegorodtsev mentioned non-transparent procedures and absence of clear criteria for including particular medicine in the national lists. He added that Russia had approved the Rules for compiling the list of medicines, required by the law of the Russian Federation that “set objective criteria and transparent procedures of compiling the lists, created conditions for preventing the conflict of interests of decision-makers, introduced a requirement to annually review the list of vital and essential medicines”.

Regarding government regulation of prices, Timophei Nizhegorodtsev informed that FAS had been involved in devising a new method of pricing on the medicine in the list of vital and essential medicine. It is based on comparison of prices for the reference medicine in Russia and the reference countries and reduction of generic prices depending on their costs and the registration status from the prices of reference medicine.

He emphasized: “The key change is a transition form the “costs” method of registering the ceiling ex-works prices to the “indicative” method”. Thanks to the new method we have been able to reduce prices for more than 1000 medicines on average by 43 %”.

Finally Timophei Nizhegorodtsev stated:

If competition authority is limited in discussing and applying the medical legislation, it will never be able to efficiently eliminate competition restriction in the pharmaceutical sector. The most important is to immerse in these issues, understand them and present an independent assessment for the governments of our countries with an analysis of an actual situation on the pharmaceutical markets of your countries.

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