Protection of Consumer Rights for Medicinal Products

Anna Ivanova, Lawyer at BRACE Law Firm January 19, 2022

BRACE Law Firm ©

According to the Law of the Russian Federation No. 2300-1 dated February 7, 1992, On Protection of Consumer Rights (the "Law on Protection of Consumer Rights"), a consumer is a citizen who intends to order or purchase, or who orders, purchases, or uses goods (works, services) exclusively for personal, family, household, or other needs not related to entrepreneurial activity.

The Law on Protection of Consumer Rights protects the rights of all consumers purchasing goods, works, or services. However, protecting consumers who purchase medicinal products has its own specific features. Let us examine these features in more detail.

Medicinal products are medicinal products in the form of dosage forms used for the prevention, diagnosis, and treatment of diseases, rehabilitation, or for the preservation, prevention, or termination of pregnancy (Item 4, Article 4 of Federal Law No. 61-FZ dated April 12, 2010, On the Circulation of Medicinal Products).

It is important to note that the legal protection of buyers of medicines is required not only for in-person purchases but also for remote sales, which imposes additional responsibility on the seller. Currently, the remote sale of non-prescription medicinal products is permitted. According to Decree of the Government of the Russian Federation No. 827 dated May 31, 2021, pharmacy organizations that have entered into a contract with other persons for the delivery of an order bear responsibility to the buyer if these persons violate the storage conditions of medicinal products during delivery or cause damage to the products. Pharmacy organizations and persons delivering the order are responsible for the sale of falsified, counterfeit, substandard, and non-registered medicinal products in the Russian Federation. The pharmacy organization also accepts returned unpaid orders from the persons delivering the order. Thus, when ordering medicines remotely, the consumer may file a claim directly with the pharmacy for any violations in the delivery procedure, even if a different legal entity carried out the delivery.

Under the general rules of Article 502 of the Civil Code and Article 25 of the Law on Protection of Consumer Rights, a consumer may exchange a non-food product of proper quality for a similar product from the seller if the product does not fit in terms of shape, dimensions, style, color, size, or configuration.

However, medicinal products are included in the List of Goods Not Subject to Exchange, approved by Decree of the Government of the Russian Federation No. 2463 dated December 31, 2020. Therefore, purchased medicines of proper quality cannot be exchanged or returned.

Nevertheless, there are exceptions to this rule. Under Articles 10 and 12 of the Law on Protection of Consumer Rights, the manufacturer (performer, seller) must provide the consumer with necessary and reliable information about the goods (works, services) in a timely manner to ensure the possibility of a correct choice. For certain types of goods, the Government of the Russian Federation establishes the list and methods of providing information to the consumer. If the seller does not provide the consumer with the opportunity to receive immediate information about the product upon concluding the contract, the consumer may demand compensation for damages caused by the unreasonable evasion of the contract. If the contract is already concluded, the consumer may refuse to perform it within a reasonable time and demand a refund and compensation for other losses.

Additionally, according to Item 25 of the Rules for issuing permits for the remote retail trade of medicinal products for medical use, the implementation of such trade, and the delivery of said medicinal products to citizens, approved by Decree of the Government of the Russian Federation No. 697 dated May 16, 2020, when ordering non-prescription medicinal products, the buyer may refuse a delivered medicinal product of proper quality before paying for the order. In this case, the buyer only pays for the delivery service. The pharmacy organization accepts returned unpaid orders from the persons delivering the order.

Thus, a return of medicinal products is possible in two cases:

• The seller fails to provide full information about the medicine;
• Refusal of a remote order before payment.

In the first case, difficulties arise in proving the failure to provide necessary information. It is quite difficult to prove the unreliability of information when a pharmacy employee gives incorrect verbal information about a medicinal product. In such cases, one might suggest using audio or video recordings, witness statements, or identifying a clear discrepancy between the characteristics of the sold product and the medicine prescribed to the patient (if the pharmacy employee positioned the sold product as matching the prescription). However, since there is no established judicial practice for such precedents, it is impossible to determine with certainty how a court would evaluate such evidence.

The situation is entirely different when a consumer is sold a substandard medicinal product. The main defects (substandard quality) of a medicinal product include:

• Expiration of the shelf life or a discrepancy between the shelf life on the primary and secondary packaging;
• Absence of mandatory information about the product (including the instructions for the medicinal product);
• Marking defects;
• Discrepancy between the description of the medicinal product in the instructions and the actual product (possible differences in color, consistency, smell, shape, etc.);
• Damage to either the primary or secondary packaging.

Often, difficulties arise in proving defects such as the absence of instructions or damage to the secondary packaging. The buyer had the opportunity to check these defects at the exact moment of purchase, whereas packaging damage could have occurred after the purchase, and the buyer could have lost the instructions. Therefore, we recommend checking for these defects immediately upon purchasing the medicine.

Under the general rule of Article 18 of the Law on Protection of Consumer Rights, if a consumer discovers defects in a product that the seller did not disclose, the consumer may, at their choice:

• Demand replacement with a product of the same brand (model or article);
• Demand replacement with the same product of a different brand (model, article) with a corresponding recalculation of the purchase price;
• Demand a proportional reduction of the purchase price;
• Demand the immediate gratuitous elimination of the product's defects or reimbursement of expenses for their correction by the consumer or a third party;
• Refuse to perform the sales contract and demand a refund. At the seller's request and expense, the consumer must return the defective product.

In some cases, a proportional price reduction is practically unacceptable, such as if the shelf life of the medicinal product has expired or if the product does not match the declared characteristics (color, smell, consistency, etc.). Furthermore, demanding the elimination of defects or reimbursement for repairs by third parties is not a practically applicable method of protecting rights when purchasing a substandard medicine.

The consumer may present the requirements listed above to the seller (manufacturer, authorized organization, authorized individual entrepreneur, or importer) regarding product defects discovered during the warranty period or shelf life. The absence of a cash or sales receipt or any other document certifying the fact and conditions of purchase is not a ground for refusing the consumer's demands.

In practice, a situation where a pharmacy incorrectly provides information regarding the prices of medicinal products is quite common. In one case, a regulatory body recognized the discrepancy between medicine prices listed in an advertising campaign and the actual retail prices as a violation. Specifically, the applicant stated that on February 11, 2021, at 10:59 AM, he received an SMS from the sender "Bud_zdorov" with the following content: "We are crediting 5000 bonuses to your Pharmacy Wallet card on February 12! Pay 10% of the purchase amount on February 12 in Volgograd and the region..."

However, the applicant stated that on February 12, 2021, at the pharmacy located at 25 Lenin Ave., Volgograd, he was sold goods without the declared 10% discount. The total purchase amounted to 2,014 rubles, of which the applicant paid 1,986 rubles, although with a 10% discount, he should have paid 1,812.6 rubles (a copy of the receipt was attached).

The applicant also stated that the pharmacy explained that there is a list of excluded goods to which the discount does not apply. The applicant pointed out that the advertisement contained no caveats regarding exclusions.

As the FAS branch noted: "The advertising campaign in question, with an offer to pay 10% of the purchase amount (rather than up to 10%, as actually provided for by the Rules of the campaign and the representative's explanations), while attracting the consumer's attention with the possibility of saving on medicinal products, does not contain information that there are restrictions on the campaign, specifically regarding excluded goods and other cases where a discount is not provided."

"This information, as confirmed by the applicant's arguments, is material; its absence misleads consumers regarding the conditions for purchasing goods. The phrase 'pay 10%' used in the advertisement leads the potential buyer to expect exactly a 10% discount and nothing less (within the range of 10%, where 10% is the maximum limit of the discount and the minimum limit is not defined)".

We also note that under Part 1, Article 18 of the Law on Advertising, the distribution of advertising over telecommunications networks, including via telephone, facsimile, and mobile radiotelephone communications, is permitted only with the prior consent of the subscriber or addressee. Advertising is considered distributed without prior consent unless the advertiser proves that such consent was obtained. The advertiser must immediately stop distributing advertisements to a person who makes such a demand. Thus, a pharmacy may send promotional materials to its customers via telecommunications only if it has obtained the customer's consent.

If a pharmacy sells a substandard medicinal product to a buyer, the buyer should contact the pharmacy with a demand for a product return and a refund.

If the pharmacy unreasonably refuses to return a substandard medicinal product or a product of proper quality (in cases where such a return is possible), the consumer may file a written claim with the pharmacy. If the pharmacy employee refuses to provide an incoming number or accept the claim, it should be sent by registered mail with acknowledgment of receipt and an inventory of the attachment. Under Articles 21 and 22 of the Law on Protection of Consumer Rights, the seller must satisfy demands for a refund within 10 days of the date the demand is presented. If a demand for replacement is made, the pharmacy must carry out the replacement within 7 days. If an additional quality check is required, the period is 20 days.

After this period, if the claim is not satisfied, the consumer may contact the regional branch of Rospotrebnadzor where the seller is located and/or file a lawsuit. When contacting Rospotrebnadzor, the pharmacy faces administrative liability under Article 14.8 of the CAO RF.

The consumer may also seek judicial protection. In this case, it is possible to recover legal costs and compensation for moral harm from the pharmacy. According to Article 15 of the Law on Protection of Consumer Rights, moral harm is subject to compensation if the party causing the harm is at fault, regardless of the amount of property damage.

In practice, conflicts with pharmacy organizations are most often resolved through negotiation. However, if the seller refuses to satisfy the consumer's fair demands, the current legislation provides a substantial range of protection methods, including judicial protection for consumers of medicinal products.

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References

1. Decision of the FAS branch for the Volgograd Region dated June 25, 2021, in case No. 034/05/5-592/2021.

January 19, 2022