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Cultural considerations: Good Distribution Practices in Russia

14. december 2015 at 8:00 | Veronika Valdova, ARETE-ZOE
Until recently, Russia was one of very few markets were Good Manufacturing Practice certificates were not part of Good Distribution Practices.

In 2013, Russia was still one of the emerging markets where pharmaceutical companies were lining up with investments. Russian pharmaceutical sector was, and still is, highly dependent on medicine imports.[i]

Almost 80% of drugs sold in Russian pharmacies are imported as medicinal products; the remaining 20% are manufactured from imported active pharmaceutical ingredients. Additionally, Russian government regulates the prices for essential 608 drugs. The lists differ from one region to another.[ii]

After the annexation of Crimea, undeclared invasion of Ukraine, and imposition of Western sanctions, Russian economy contracted substantially. Ruble devaluated steeply, and growing inflation undercut the purchasing power of Russians. Contrary to general perception, study conducted by Ernst &Young in late 2014 revealed that pharma executives do not see serious threats to their operations and investment plans in Russia and most of them have not been affected by the situation.[iii]

Russia, at that time a fast growing, emerging market with strong demand for investment, had its own rules for entry. The global pharmaceutical industry approached Russia with two distinct market strategies: they opted either for building local manufacturing capabilities or for partnership with domestic companies.[iv]

Apparent imbalance[v] of regulatory requirements for foreign producers as opposed to domestic, restrictions on interaction between healthcare workers and pharma representatives[vi], and lack of clear understanding of current legislation makes operations in the region difficult[vii]. According to the EY report, 77% of pharmaceutical companies in Russia struggle with excessive bureaucracy and corruption.[viii]

Russia is also a major market for counterfeit pharmaceuticals. Russia remains on the Priority Watch List in 2015 as a result of continued copyright infringement and trademark counterfeiting. The lack of enforcement of trademarks has resulted in the continued problem of counterfeit goods in Russia.[ix]

Russia accessed to the WTO in November 2011 and made commitments in the World Trade Organization Working Party Report to implement protections against "unauthorized disclosure of, or reliance on, undisclosed test or other data generated to obtain marketing approval for pharmaceutical products".[x]

Counterfeit pharmaceuticals manufactured in Russia are available through online pharmacies. In 2014 Russia's State Duma adopted new legislation aimed at criminalizing pharmaceutical counterfeiting as well as the distribution of fake and adulterated medicines. The new Federal Law "On amendment of the Federal Law On circulation of pharmaceuticals" No. 429-FZ was signed into law on 22 December 2014. This act introduced significant amendments into the existing law No. 61-FZ of 2010.[xi]



The amendment introduced new definitions, separated clinical trials from registrations; established new grounds for cancellation of registration; enacted good practices rules; established procedure for interchangeability of pharmaceuticals; imposed registration obligation an Marketing Authorization Holder; amended rules on pricing and reimbursement for essential and vitally important medicines; and established cease and desist order for illegal pharmacies.[xii]

New terms and definitions include biological medicinal products, immune-biological medicinal products, biotech medicinal products, gene-therapy medicinal products, orphan drugs, and homeopathic products.
The term "original medicine" was replaced with "reference medicinal product". This definition stands for a product, which has been registered in Russia for the first time, including generics. "Generic medicinal product" then refers to a drug that is biologically equivalent to "reference medicinal product".

The new law somewhat clarified powers of federal executive authorities and procedure for fast track procedure for "first three" medicines registered in Russia and for pediatric medicines.

The new act introduced procedure for determining interchangeability of medicinal products and, in particular, parameters for comparison. The requirement to demonstrate bioequivalence does not apply to reference medicinal products, herbal medicines, homoeopathic products and medicinal products, which have been approved in Russia for over 20 years.

State-authorized and financed Expert committee shall determine interchangeability of products registered before 1 July 2015. Applications for determining interchangeability shall be submitted by end of 2016. From January 2018 this information shall be included in Russian national Register of medicinal products.

Manufacturers and wholesalers shall comply with Good distribution practice and Good practices of storage and transportation as approved by authorized bodies.

The need to conform the manufacturing of medicines to the GMP (Good Manufacturing Practices) standards has been a mandatory licensing requirement in Russia since January 2014. In reality, however, this requirement has not worked properly. Russia does not yet have a formal procedure to confirm GMP compliance, and in the difference from other countries, it does not issue GMP certificates to compliant manufacturers. This made definition and detection of counterfeit and adulterated pharmaceuticals effectively impossible.



This has changed with the new law. After 1 July 2015, Russian Ministry of Public Health will be authorized to issue a GMP certificate based on the results of a manufacturing inspection by authorized experts.

Many of the new amendments must be specified by government decrees or orders of the Ministry of Healthcare and other authorities. The rules on Good manufacturing practice, Good distribution practices, and Good practices of storage and transportation of medicinal products, as well as good pharmacy practice are yet to be approved.[xiii]
Let's see if the dire situation in distribution of pharmaceuticals in Russia gets any better now.

[i] Patricia Van Arnum: Gauging the Potential of Russia's Pharmaceutical Market. DCAT Connect (May 27, 2014). Available at http://connect.dcat.org/blogs/patricia-van-arnum/2014/05/27/gauging-the-potential-of-russias-pharmaceutical-market#.vr6vzrpf8yc (accessed December 3, 2015)

[ii] Deloitte: Trends and practical aspects of development of the Russian pharmaceutical market - 2013. Available at: http://www2.deloitte.com/content/dam/Deloitte/ru/Documents/life-sciences-health-care/EN_Trends_and_practical_aspects_2013.pdf (accessed December 3, 2015).

[iii] EY: Russia's Pharmaceutical Industry: Setting a Course for Localization (October 2014). Available at: http://www.ey.com/RU/en/Issues/Business-environment/EY-russia-insights-october-2014 (accessed December 3, 2015).

[iv] Max Rubin and Julie Blackbeard: Putin - pharma's friend or foe in Russia? (October 29, 2013). Available at: http://www.pmlive.com/pharma_intelligence/putin_-_pharmas_friend_or_foe_in_russia_512893 (accessed December 3, 2015).

[v] Vladislav Shayman: Pharma 2020 and Import Substitution (October 8, 2014). Available at: http://www.themoscowtimes.com/guides/eng/pharmaceutical-business-health-care-2014/508482/pharma-2020-and-import-substitution-/508626.html (accessed December 3, 2015).

[vi] RG.ru: Федеральный закон Российской Федерации от 21 ноября 2011 г. N 323-ФЗ (November 23, 2011) Mhttp://www.rg.ru/2011/11/23/zdorovie-dok.html (accessed December 3, 2015).

[vii] EY: Pharmaceutical Industry in Russia Operation under the new conditions. Survey 2010 (2010). Available at http://www.ey.com/RU/en/Industries/Life-Sciences/Pharma-industry-survey-2010 (accessed December 3, 2015).

[viii] Michael Volkov: Challenges for Pharmaceutical Companies in Russia. Available at: http://blog.volkovlaw.com/2014/06/challenges-for-pharmaceutical-companies-in-russia/ (accessed December 3, 2015).

[ix] USTR: 2015 Special 301 Report. Available at: https://ustr.gov/sites/default/files/2015-Special-301-Report-FINAL.pdf (accessed December 3, 2015).

[x] WTO: Working Party on the Accession of the Russian Federation (2011). https://www.wto.org/english/thewto_e/acc_e/a1_russie_e.htm (accessed December 3, 2015).

[xi] PWC: Amendments to the Federal Law "On Circulation of Pharmaceuticals. (March 2015). Available at: https://www.pwc.ru/en/legal-services/news/assets/pharma_eng.pdf (accessed December 3, 2015).

[xii] Federal Law on Circulation of medicines of December 22, 2014 No. 429-FZ: Available at: acto-russia.org/files/zakon_ob_obr_ls_en.docx (accessed December 3, 2015).

[xiii] Vsevolod Tyupa: Russian Law on Circulation of Medicines - Significant amendments to come into force on 1 July 2015. Lexology (December 15, 2015). Available at: http://www.lexology.com/library/detail.aspx?g=710ebbe9-cca5-40eb-ba8b-e429d53b6c8f (accessed December 3, 2015).
 

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