On the Activities of Pharmacy Organizations in Russia

 

Anna Ivanova, Associate at BRACE Law Firm May 28, 2022

BRACE Law Firm ©

 

According to Article 4 of Federal Law No. 61-FZ dated April 12, 2010, On the Circulation of Medicinal Products (the "Law No. 61-FZ") or (the "Law on Circulation of Medicinal Products"), a pharmacy organization is an organization or a structural unit of a medical organization that carries out the retail trade of medicinal products, including via remote means, as well as the storage, transportation, manufacturing, and dispensing of medicinal products for medical use in accordance with the requirements of the Law on Circulation of Medicinal Products.

Thus, the key feature of a pharmacy organization's activity is the retail trade of medicinal products. Such activity has its own regulatory specifics. This article examines the main features of pharmacy operations.

Licensing of Pharmacy Organization Activities

The activities of pharmacy organizations are subject to mandatory licensing, with special requirements imposed on both license applicants and current licensees.

According to Paragraph 5 of the Regulation on Licensing of Pharmaceutical Activities, approved by Government Decree No. 1081 dated December 22, 2011, a licensee must meet the following licensing requirements to perform pharmaceutical activities:

• The availability of premises and equipment necessary to perform the work (services) that constitute pharmaceutical activity and meet established requirements (except for medical organizations and separate subdivisions of medical organizations);
• Compliance by pharmacy organizations and individual entrepreneurs holding a pharmaceutical license with the rules of good pharmacy practice for medicinal products for medical use, the rules of good practice for the storage and transportation of medicinal products for medical use, the rules for dispensing medicinal products, and the rules for dispensing narcotic drugs and psychotropic substances;
• The head of the pharmacy organization must have a higher pharmaceutical education and at least three years of work experience in the specialty, or a secondary pharmaceutical education and at least five years of work experience in the specialty, along with a specialist certificate.

Notably, on September 1, 2022, the Regulation on Licensing of Pharmaceutical Activities, approved by Government Decree No. 547 dated March 31, 2022, will take effect, and the previous Regulation will expire. A novel feature of this document is the removal of the requirement for the head of a pharmacy organization to have a specific education, qualification, or work experience. The new regulation also requires the staff to include a person responsible for implementing and ensuring the quality system (this requirement also applies to license applicants). Furthermore, when holding a pharmacy liable for a gross violation of licensing requirements, authorities will consider consequences such as the threat of harm to the life or health of citizens, industrial emergencies, or human casualties.

Under Paragraphs 2–4 of Article 14.1 of the Code of Administrative Offenses of the Russian Federation (the "CAO RF"), conducting entrepreneurial activity without a special permit (license) if such permit (license) is mandatory carries administrative fines: for individuals, from 2,000 to 2,500 rubles; for officials, from 4,000 to 5,000 rubles; and for legal entities, from 40,000 to 50,000 rubles, with or without confiscation of manufactured products, production tools, and raw materials.

Conducting activity in violation of license requirements entails a warning or an administrative fine: for individuals, from 1,500 to 2,000 rubles; for officials, from 3,000 to 4,000 rubles; and for legal entities, from 30,000 to 40,000 rubles.

A gross violation of licensing requirements carries an administrative fine: for individual entrepreneurs, from 4,000 to 8,000 rubles or administrative suspension of activity for up to 90 days; for officials, from 5,000 to 10,000 rubles; and for legal entities, from 100,000 to 200,000 rubles or administrative suspension of activity for up to 90 days.

The general statute of limitations for liability under this article is three months. However, disputes often arise regarding the application of a special statute of limitations in cases of gross licensing violations. For instance, the legislation on the health protection of citizens provides for a one-year statute of limitations.

The Constitutional Court of the Russian Federation provided the following answer to this disputed issue: “...liability for the offense provided for in Article 14.1 of the CAO RF aims to protect relations regulated by licensing legislation. Consequently, if a person is charged with violating licensing legislation, the current regulatory system excludes the possibility of applying the special (extraordinary) statute of limitations provided for in Part 1 of Article 4.5 of the CAO RF, including for violations of health protection legislation; thus, even when applying Part 4 of Article 14.1 of the CAO RF, the general (three-month) statute of limitations for liability must be observed”.[1]

The most frequent violation of licensing requirements is the breach of rules for dispensing medicinal products. Roszdravnadzor warns that such breaches constitute gross violations of licensing requirements.[2] Furthermore, judicial practice shows that actions related to violating storage conditions and requirements for the minimum assortment of medicinal products are also gross violations of licensing requirements and constitute an administrative offense under Part 4 of Article 14.1 of the CAO RF.[3]

Thus, the offenses under Article 14.1 of the CAO RF apply broadly to pharmacy organizations, as failure to comply with requirements for the storage, dispensing, or transportation of medicines also constitutes a violation of licensing requirements.

Requirements for pharmacies can be categorized into (1) internal operational requirements (premises equipment, storage, etc.) and (2) customer interaction requirements (compliance with consumer rights and dispensing rules).

General Requirements for Documentation and Pharmacy Premises

The Ministry of Health of Russia Order No. 647n dated August 31, 2016, approved the Rules of Good Pharmacy Practice for Medicinal Products for Medical Use. This document establishes that the retail trade of pharmacy assortment goods involves implementing a set of measures (a quality system).

Quality system documentation includes:

• A document on the pharmacy’s policy and objectives, defining methods to ensure customer demand and minimize the risks of substandard, falsified, or counterfeit medicinal products, medical devices, and dietary supplements (the "DS") entering circulation;
• A quality manual defining the pharmacy’s development directions;
• Documents describing the procedure for providing pharmaceutical services;
• Orders and instructions from the pharmacy head regarding core activities;
• Personnel files for pharmacy employees;
• The license;
• Documents regarding the suspension (resumption) of the sale of pharmacy goods, the recall (withdrawal) of medicines from circulation, and the identification of unregistered medical devices;
• Pharmacy inspection reports;
• Documents for effective planning, implementation, and management of quality system processes.

The quality control system serves as an internal control tool. During inspections, authorities pay close attention to the presence of Standard Operating Procedures (the "SOPs").

The development of SOPs is necessary for the rational choice and application of adequate (effective, safe, and economically acceptable, evidence-based) medical technologies. SOPs are essential for assessing the quality of medical care and protecting the rights of patients and physicians in disputes. Each SOP must specify: the purpose of development, necessary resources and technologies, expected results (intermediate and final), and criteria for compliance.[4] Courts often favor pharmacy organizations that lack a quality system by issuing a warning instead of a fine.[5]

To comply with these Rules, a retail entity must have the necessary personnel based on the volume of pharmaceutical services provided. Every employee must sign an acknowledgment of their rights and duties as specified in job descriptions and professional standards. The head of the pharmacy is responsible for maintaining the infrastructure.

Pharmacy premises also require special attention. Premises and equipment must be located, equipped, and operated to suit their functions. All premises must be within a building (structure), functionally unified, isolated from other organizations, and secured against unauthorized access. Access to the retail entity through another organization's premises is permitted.

Premises must also comply with the Federal Law On Countering Terrorism. Specifically, pharmacies must categorize premises based on the threat level of a terrorist act and develop security passports. Prosecutors pay close attention to compliance with these rules.[6]

Pharmacies must also provide barrier-free access for persons with disabilities in accordance with legislation on the protection of disabled persons. If such modification is impossible, the pharmacy must arrange a call system for a pharmaceutical worker to serve these individuals. Violation of this requirement under Article 9.13 of the CAO RF (evading requirements to ensure accessibility for disabled persons) carries a fine: for officials, from 2,000 to 3,000 rubles; for legal entities, from 20,000 to 30,000 rubles. For example, due to the lack of a ramp and failure to follow a prosecutor’s order to install one, a court ordered a pharmacy to install a ramp despite the presence of a call button, as there was no evidence that installation was impossible.[7]

Additionally, a pharmacy must display a sign indicating the type of organization in Russian and the local national language (e.g., pharmacy, pharmacy point, or pharmacy kiosk), its full and abbreviated name, legal form, and operating hours. The sign must be illuminated at night.

Pharmacy names are also scrutinized. For example, the Arbitration Court of the Kursk Region supported the FAS Russia's regional office, ruling that using the words "pharmacy warehouse" on premises misleads consumers regarding sales conditions and aims to gain an unfair competitive advantage. The word "warehouse" may incorrectly suggest wholesale trade or lower prices compared to retail networks.[8]

Premises must be zoned for the following:

• Trade of pharmacy goods with storage areas that prevent customer access to medicines, including prescription drugs;
• Receipt of goods and a quarantine storage zone, including separate areas for medicinal products;
• Separate storage for employee clothing.

Violating zoning can be a gross licensing violation. The Arbitration Court of the Krasnoyarsk Territory ruled that a pharmacy acted unlawfully by lacking zones for receiving medicines, storing identified falsified or substandard drugs, and storing expired medicines.[9]

Pharmacy premises must also meet sanitary and hygienic standards. Since January 1, 2022, sanitary rules apply to the operation of premises, buildings, and equipment. Section V of these rules defines requirements for pharmacy placement, functionality, and anti-epidemic regimes. Pharmacies must be located in an isolated block within a residential building, public building, or a standalone building. Pharmacies in residential buildings must have a separate entrance. Manufacturing areas must ensure the technological flow for sterile and non-sterile forms. If a pharmacy manufactures medicines, ventilation is mandatory.[10]

Premises must be designed to prevent the entry of insects, rodents, or other animals.

Finishing materials must comply with fire safety requirements. The fire inspectorate may initiate an inspection and impose liability under Article 20.4 of the CAO RF, ranging from warnings to fines (up to 200,000 rubles for legal entities). Negligent violation of fire safety rules resulting in serious health harm can lead to criminal liability under Article 219 of the Criminal Code of the Russian Federation, including fines or imprisonment for up to three years.

In summary, pharmacy premises must comply with Good Pharmacy Practice, anti-terrorism laws, sanitary norms, and fire safety rules. Signage is also subject to antitrust and advertising law compliance.

Requirements for the Transportation and Storage of Medicinal Products

A primary requirement for licensees is compliance with the rules of good practice for the storage and transportation of medicinal products for medical use, approved by Ministry of Health Order No. 646n dated August 31, 2016. Like the Rules of Good Pharmacy Practice, this document establishes quality system requirements for storage and transportation.

The main storage requirements include:

• Storage premises must have sufficient capacity and ensure the safe, separate storage and movement of medicinal products.
• The storage of food, tobacco, and drinks (except drinking water) or medicinal products for personal use by employees is prohibited in storage areas.
• Premises must maintain the temperature and humidity levels specified in the registration dossier, instructions for use, and packaging. Temperature control equipment must be placed based on temperature mapping and risk analysis. Mapping must be repeated following risk analysis or structural changes. Results are recorded daily in a special log.

Notably, violating storage temperature can be qualified under two different offenses: Part 4 of Article 14.1 of the CAO RF (gross violation of licensing requirements) or Part 1 of Article 14.43 of the CAO RF (violation of technical regulations). The Supreme Court of the Russian Federation clarified that the same act may be qualified under different articles based on the objective side of the offense and the authority of the administrative body.[11]

Roszdravnadzor recommends that heads of pharmacy and medical organizations strengthen internal control over temperature regimes, ensure air conditioning, and follow storage rules, especially for thermolabile medicinal products.[12]

Shelves and cabinets must be marked and have visible shelf cards (or an electronic data processing system using codes). Medicines awaiting a decision or those whose circulation is suspended must be kept in a separate room.

Medicinal products subject to subject-quantitative accounting must be stored in metal or wooden cabinets that are sealed or lead-sealed at the end of the day. Failure to comply is a gross licensing violation. For example, a court held a pharmacy liable under Part 4 of Article 14.1 of the CAO RF for unrecorded storage of such drugs and missing entries in the accounting log.[13]

Medicines containing narcotic or psychotropic substances must be stored according to Russian legislation. Since March 1, 2022, Ministry of Health Order No. 1103n requires refrigerators and safes containing narcotic and psychotropic substances to be sealed, with lists of medicines and their maximum single and daily doses kept inside each safe. These doses are updated with each issuance.

All storage and transportation activities must ensure that the identity and quality of medicines are not lost. For thermolabile medicinal products, specialized equipment must maintain the required temperature. Transportation containers must protect quality and safety from external factors. These requirements are especially relevant for remote sales.

Under the Regulation on the MDLP System, approved by Government Decree No. 1556, pharmacies must register with the MDLP System, prepare their information systems, and, since July 1, 2020, enter data on all medicinal product operations. Moving medicines between entities requires reporting to the MDLP System.

Pharmacies are equipped with withdrawal registrars based on applications to the operator, "Operator-CRPT". Responsible employees must enter data on received goods. Liability for failing to enter data or late entry is provided under Article 6.34 of the CAO RF. Selling medicines without labeling carries fines and confiscation. Courts generally support Roszdravnadzor, rejecting claims that data transfer was technically impossible.[14]

Requirements for Dispensing Medicinal Products and Interaction with Customers

Selling medicines involves many nuances, from consumer protection to specific dispensing requirements.

While Government Decree No. 2463 excludes medicinal products from the requirement to replace goods of good quality, consumers may return substandard medicines. Clear grounds for return include expired shelf life, damaged packaging (at the time of receipt), or non-compliance with the instructions (e.g., color, smell, or appearance).

Good Pharmacy Practice prohibits pharmaceutical workers from hiding information about available medicinal products that have the same International Nonproprietary Name (the "INN") and their prices.

The retail area must display:

• A copy of the pharmacy license;
• A copy of the license for the circulation of narcotic drugs and psychotropic substances (if applicable);
• Information on the inability to return or exchange pharmacy goods of good quality;
• Other required documents.

Upon request, a customer must be allowed to review supporting documentation. Every pharmacy must have a book of reviews and suggestions.

Ministry of Health Order No. 1093n dated November 24, 2021, sets the rules for dispensing medicines and prescription forms. For incurable patients, prescriptions may be filled by proxy. Selling medicines with expired prescriptions is prohibited, and doctors must reissue incorrectly drafted prescriptions.

Selling prescription drugs without a prescription is a common violation. Courts usually reject "insignificance" arguments and uphold fines under Article 14.1 of the CAO RF.[15] In 2021, a high-profile case resulted in a 1,000,000 ruble fine for a pharmacy selling medicines such as Lyrica, Zaldiar, and Mydriacyl without prescriptions, which also showed signs of being counterfeit.[16]

If a medicine is out of stock, the prescription must be accepted for service within the following timeframes:

• Prescriptions marked "statim" (immediately): within 1 business day;
• Prescriptions marked "cito" (urgently): within 2 business days;
• Medicines in the minimum assortment: within 5 business days (or 2 business days if dispensed for free or at a discount);
• Medicines not in the minimum assortment: within 10 business days (or 7 business days if free or at a discount);
• Medicines prescribed by a medical commission: within 10 business days.

Patients who do not receive free medicines often seek compensation for purchasing them independently. Even if the pharmacy had objective reasons (e.g., contract expiration), courts often side with the patient. The Supreme Court ruled that if a person spent money because the pharmacy failed to provide a free medicine, they are entitled to reimbursement. The pharmacy should have used a generic substitute if possible and informed the supplier of the shortage.[17]

Pharmacies may now sell medicines remotely with proper authorization. Under Government Decree No. 697, the pharmacy must have its own website or a contract with an aggregator, a courier service ensuring proper transport conditions, storage space for orders, and an electronic payment system. Authorization is revoked if the pharmacy is held liable twice in one year under Article 6.33 (circulation of falsified or counterfeit medicines) or Article 14.4.2 of the CAO RF (violation of legislation on the circulation of medicinal products).

Conclusion

Pharmacy regulations are extensive and subject to frequent changes. To prevent violations and increase efficiency, organizations should appoint authorized persons for internal control and seek legal assistance to structure processes and stay informed of legislative changes.

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References

[1] Resolution of the Constitutional Court of the Russian Federation No. 3-P dated January 15, 2019.

[2] Letter of Roszdravnadzor No. 04I-1270/15 dated August 6, 2015, On Compliance with Legislation in the Activities of Pharmacy Organizations.

[3] Review of Judicial Practice "On Certain Issues Arising during the Consideration by Arbitration Courts of Cases on Administrative Offenses Provided for in Chapter 14 of the Code of Administrative Offenses of the Russian Federation", approved by the Presidium of the Supreme Court of the Russian Federation on December 6, 2017.

[4] Dolgopolov P.S., Standard Operating Procedures: Pharmacy and Medical Organizations // SPS ConsultantPlus. 2022.

[5] Review of Judicial Decisions on Administrative Cases against Pharmacies for January 2020 // KatrenStyle. Online magazine for pharmacists and medical workers.

[6] Decision of the Mikhailovsky District Court of the Volgograd Region dated January 28, 2020, in Case No. 2-144/2020 (2-2472/2019).

[7] Appellate Ruling of the Penza Regional Court dated November 9, 2021, in Case No. 33-3344/2021.

[8] Decision of the Arbitration Court of the Kursk Region dated July 17, 2019, in Case No. A35-3714/2019.

[9] Decision of the Arbitration Court of the Krasnoyarsk Territory dated January 13, 2020, in Case No. A33-35159/2019.

[10] SP 2.1.3678-20 Resolution of the Chief State Sanitary Doctor of the Russian Federation No. 44 dated December 24, 2020, On Approval of Sanitary Rules SP 2.1.3678-20 "Sanitary and Epidemiological Requirements for the Operation of Premises, Buildings, Structures, Equipment, and Transport, as well as the Conditions of Activity of Economic Entities Engaged in the Sale of Goods, Performance of Work, or Provision of Services".

[11] Ruling of the Supreme Court of the Russian Federation dated February 1, 2018, in Case No. 309-AD17-19255.

[12] Letter of Roszdravnadzor No. 01i-1193/20 dated June 25, 2020, On Compliance with the Temperature Regime.

[13] Decision of the Arbitration Court of the City of Moscow dated April 14, 2017, in Case No. A40-41132/2017.

[14] Decision of the Arbitration Court of the Amur Region dated July 21, 2021, in Case No. A04-3688/2021.

[15] Ruling of the Supreme Court of the Russian Federation No. 308-ES19-28141 dated February 11, 2020.

[16] Ruling of the Supreme Court of the Russian Federation No. 308-ES21-672 dated March 11, 2021.

[17] Ruling of the Judicial Chamber for Civil Cases of the Supreme Court of the Russian Federation No. 53-KG17-32 dated February 19, 2018.