New rules to boost pharmaceutical clarity for consumers and producers

The Russian government has set new regulations to control the price of crucial medicines approving a list of 500 drugs. By April 1st manufacturers will have to register their maximum sale price.

There's a cure coming to the market, with the government preparing new legislation to regulate pharmaceuticals. It’s designed to crack down on illegal price hikes by fixing maximum costs for vital drugs. Last year prices went up by almost 11% – exceeding the inflation rate – and Health Minister, Tatyana Golikova wants better information for consumers.

“All decisions on trade margins will be taken by March 1. After all the procedures on registering prices and setting trade margins are completed, information on initial and sale prices will be available to the people. “

The government wants to boost the market share of domestic manufacturers. Currently only a quarter of all drugs bought in the country are produced in Russia. The rest is imported.

Experts say joint ventures are a better approach than for Russian companies to modernize or produce innovative products on their own. Investors are willing to come, but say the new rules are not transparent, according to Vladimir Shipkov Executive Director at AIPM.

“We want to invest one billion dollars to begin with. But current legislation doesn’t go in line with the political will. The draft law on circulation of medicines so far is failing to meet our expectations. Some of its aspects don’t do any good for improving Russia’s investment climate.”

Local producers, including Maksim Uvarov from Binopharm, welcome the initiative to substitute imports.

“The Russian government must make pharmaceutical clusters so not only Russian manufacturers will exist. Foreign companies will be able to transfer their technology and start making products in Russia. Then, contracts can be made not for one year, but for 3-5 years. But for this to happen, the law has to be changed.”

The legislation has already passed a first reading. But companies have asked to hold off on its adoption. They claim that since it doesn’t clearly spell out the rules, the law designed to make the market equally accessible for everyone could have some critical side effects.