During the first two months of 2016 (January and February) amendments to the legislation became effective regulating circulation of pharmaceuticals – a set of regulatory acts was approved providing new state support measures for Russian manufacturers of pharmaceuticals, including production of analogs of innovative pharmaceuticals, and additional control measures were applied in relation to pharmaceuticals imported into Russia. 

These legislative acts, first of all, provide Russian manufacturers of pharmaceuticals an opportunity to compensate up to 50% of costs from the federal budget, and secondly, they establish control measures which foreign manufacturers must undergo in the course of state registration of pharmaceuticals in Russia. 

1.             Russian manufacturers of pharmaceuticals can compensate up to 50% of their costs from the federal budget 

On January 16, 2016, pursuant to Government Decree No.1518 dated December 30, 2015 amendments to the state program “Development of pharmaceutical and medical industry” approved in Russia for the period from 2013 until 2020 became effective. 

Pursuant to this decree, Russian companies can compensate part of the costs (50%) incurred when implementing projects on producing pharmaceuticals and medical products, in particular, in connection with implementation of the following measures: 

-                 Arranging manufacture of medical products and performing clinical trials of medical implants;

-                 Arranging manufacture and performing clinical trials of pharmaceuticals and/or pharmaceutical substances;

-                 Developing better analogs of innovative pharmaceuticals. 

The procedure and terms for compensating the abovementioned types of costs are established by relevant Russian Government decrees (Decree No.1503 dated December 30, 2015, Decrees No.No.1045-1048 dated October 1, 2015). 

Compensation of costs is received by filing an application and is provided only to companies registered in Russia, while no compensation is granted if pharmaceuticals or medical products are produced outside Russia. 

2.             Pharmaceuticals can be registered in Russia only after a foreign manufacturer and its products are examined for compliance with Russian quality standards 

On January 1, 2016, amendments to Federal Law No.61-FZ “On circulation of pharmaceuticals” dated April 12, 2010 became effective, establishing for foreign manufacturers of pharmaceuticals imported into Russia a requirement to undergo a series of control measures to examine their rules of production and quality control of pharmaceuticals imported into Russia as to compliance with Russian standards (Order No.916 of the Ministry for Industry and Trade (‘Minpromtorg’) dated June 14, 2013). 

Starting from the date these changes became effective, the state registration of a pharmaceutical product produced outside Russia can be performed only after an examination for compliance of production with Russian quality standards is passed. 

Thus, lawmakers continue to apply measures to stimulate development of national pharmaceutical companies and to motivate foreign companies to arrange production of pharmaceuticals in Russia. It is worth noting that the mentioned regulatory acts and changes that they introduce are not aimed at restricting access to the Russian market for foreign manufacturers, but instead at ensuring production of pharmaceuticals on Russian territory.

Pavel Karpunin   Partner   St. Petersburg    pkarpunin@cls.ru    Tel.: +7 (812) 346 79 90

Anastasia Fomicheva   Principal Associate    St. Petersburg    afomicheva@cls.ru    Tel.: +7 (812) 346 79 90

Additional notes

Should any questions arise in connection with the above or if you need any additional materials, please contact Pavel Karpunin or Anastasia Fomicheva, St. Petersburg Office of Capital Legal Services.

This Information letter keeps the clients of Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this information letter shall not be deemed as legal opinions and do not cancel the need to obtain legal advice or legal opinion on separate issues.