Export of Medicinal Products and Medical Devices

 

March 29, 2022

BRACE Law Firm ©

 

Medicinal products and medical devices are essential elements for providing high-quality medical care to patients. The export of medicinal products and medical devices allows consumers (patients) in foreign countries to have access to various drugs and medical devices, while enabling the pharmaceutical business to develop foreign trade activities.

The Strategy for the Development of the Pharmaceutical Industry of the Russian Federation [1] was aimed at transitioning the pharmaceutical market to an innovative development model. The approved State Program Development of the Pharmaceutical and Medical Industry [2] and the Strategy for Drug Provision of the Population of the Russian Federation for the Period until 2025 [3] contemplate the development of the Russian pharmaceutical industry, which ensures the supply of effective, high-quality, and safe medicinal products to the pharmaceutical market. This contributes to meeting the needs of the Russian healthcare system and addresses import substitution issues.

By adopting this development model, the Russian pharmaceutical industry began to satisfy domestic market needs, creating opportunities to enter foreign pharmaceutical markets. The primary importers of Russian pharmaceutical products became the EAEU countries and other former Soviet republics. This is due to the fact that most of these consumers are familiar with Russian pharmaceutical goods, which creates opportunities for their export.

Despite the fact that medicinal products and medical devices manufactured for export are not subject to state registration within the territory of the Russian Federation, these goods cannot be exported to the territory of another state without appropriate customs clearance.

Order of Export for Medicinal Products

To form a common pharmaceutical market among the member states of the Eurasian Economic Union, the Agreement on Unified Principles and Rules for the Circulation of Medicinal Products within the Framework of the Eurasian Economic Union was signed [4]. At the same time, the rules for the registration and examination of medicinal products for medical use were approved by Decision of the Council of the Eurasian Economic Commission No. 78 dated November 3, 2016.

As a rule, the import and export of goods are carried out without quantitative restrictions. However, Clause 8 of Article 47 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") provides that the export of medicinal products from the Russian Federation shall be carried out without the application of restrictions established by the customs legislation of the Customs Union and (or) the legislation of the Russian Federation on the state regulation of foreign trade activities. In accordance with Clause 2 of Article 21 of Federal Law No. 164-FZ dated December 8, 2003, On the Fundamentals of State Regulation of Foreign Trade Activity, the import and export of goods are carried out without quantitative restrictions, except for cases established by regulatory acts. Such cases include situations where, for a period of no more than six months, the Government may establish temporary restrictions or export bans to prevent or reduce a critical shortage in the domestic market of the Russian Federation of food or other goods that are essential for the domestic market of the Russian Federation. The list of such goods is determined by the Government [5]. The establishment of export restrictions may be applied regardless of the country of origin of the goods.

Medicinal products manufactured for export, in accordance with Clause 7 of Part 5 of Article 13 of the Law No. 61-FZ, are not subject to state registration. Notwithstanding this, medicinal products imported into another country are subject to registration within the territory of the importing country. This process abroad requires time and effort from pharmaceutical companies.

Considering that medicinal products have a direct effect on the human body and health status, the manufacturer must produce medicinal products in a manner that guarantees their compliance with their intended purpose, the requirements of the registration dossier and (or) the clinical trial protocol, and minimizes the risk to patients associated with safety, quality, and efficacy, as well as Good Manufacturing Practice ("GMP") standards. In this regard, the manufacturer of medicinal products must comply with the requirements of Good Manufacturing Practice—the GMP certificate. For the countries of the Eurasian Economic Union, the rules of Good Manufacturing Practice are reflected in Decision of the Council of the Eurasian Economic Commission No. 77 dated November 3, 2016, On Approval of the Rules of Good Manufacturing Practice of the Eurasian Economic Union. In Russia, the Rules of Good Manufacturing Practice are established by the Rules of Good Manufacturing Practice approved by Order of the Ministry of Industry and Trade of Russia No. 916 dated June 14, 2013, and GOST R 52249-2009 [6].

For a clearer understanding of the quantity of medicinal products exported from Russia, the Federal Customs Service provides information on the export of medicinal products from the Russian Federation to the Ministry of Health on a monthly basis, no later than the 30th day of the month [7]. Furthermore, based on the data received, statistics on medicinal products exported to other countries can be formed; such figures allow for determining the growth of the pharmaceutical market. However, this procedure does not apply to the following cases: the import into the Russian Federation of medicinal products with the status of Customs Union goods within the EurAsEC and the export from the Russian Federation to the territory of member states of the Customs Union within the EurAsEC of medicinal products with the status of Customs Union goods within the EurAsEC; the import into the Russian Federation and the export from the Russian Federation of medicinal products for personal use and other non-commercial use.

In 2021, Article 1360.1, Use of an Invention for the Manufacture of a Medicinal Product for the Purpose of Its Export in Accordance with an International Treaty of the Russian Federation, was introduced into the Civil Code of the Russian Federation [8]. According to this article, the Government of the Russian Federation is now entitled to decide on the use of an invention for the manufacture of a medicinal product within the territory of the Russian Federation for the purpose of its export without the consent of the patent holder, notifying the holder as soon as possible and paying them proportionate compensation. Compulsory licensing allows for the manufacture of medicinal products using patents for inventions within the territory of the Russian Federation to provide assistance to other states without the consent of the patent holders. The volume of the intended manufacture of the medicinal product must be determined by the needs of the foreign state to whose territory it will be exported.

Customs Clearance of Medicinal Products and Documents Required for Their Export

From the perspective of foreign trade activity, customs clearance is a complex of measures performed for the movement of goods, cargo, and other items across the state border. Incorrectly completed documents, declarations, forms, and certificates may lead to undesirable consequences. All measures necessary for the cargo to cross the state border may be conducted by the manufacturer or exporter of the medicinal products themselves, or by a qualified specialist in this field.

In accordance with the Customs Code of the Eurasian Economic Union, customs-tariff regulation measures are applied for the movement of goods across the Union border during customs operations and customs control. For the movement of goods, a customs declaration must be filed—a customs document containing information about the goods and other information necessary for the release of goods. At the same time, the export customs procedure is a customs procedure applied to EAEU goods, in accordance with which such goods are exported from the EAEU customs territory for permanent stay outside its borders. The conditions for placing goods under the export customs procedure are:

• Payment of export customs duties;
• Compliance with prohibitions and restrictions;
• Compliance with other conditions provided for by international treaties within the EAEU framework, bilateral international treaties between member states, and international treaties of member states with a third party.

The obligation to pay export customs duties in respect of goods placed under the export customs procedure arises for the declarant from the moment the customs authority registers the declaration for the goods.

To export medicinal products, it is necessary to go through customs clearance, for which the following documents are required:

• A foreign trade contract specifying the contract number and date, name and assortment, delivery terms, total contract amount, payment terms, term of validity, and other conditions;
• Payment documents if advance payment was provided;
• An invoice (bill for payment);
• A full description of the goods to determine the Commodity Nomenclature of Foreign Economic Activity ("TN VED") codes;
• Other documents that may be required to confirm the foreign trade transaction and customs declaration.

Export of Narcotic Medicinal Products and Psychotropic Substances

The export of medicinal products containing narcotic and psychotropic substances is carried out in accordance with Federal Law No. 3-FZ dated January 8, 1998, On Narcotic Drugs and Psychotropic Substances. At the same time, in the case of export from the Russian Federation of narcotic drugs and psychotropic substances intended for providing humanitarian aid (assistance) or aid in emergency situations, the norms of the relevant Decree of the Government of the Russian Federation apply [9].

Given that medicinal products may include narcotic and psychotropic substances, the export of such medicinal products intended for humanitarian aid (assistance) or aid in emergency situations is carried out on the basis of Decree of the Government of the Russian Federation No. 1577 dated September 18, 2021, On Approval of the Rules for the Export of Narcotic Drugs and Psychotropic Substances Intended for Providing Humanitarian Aid (Assistance) or Aid in Emergency Situations, and Recognizing Certain Acts of the Government of the Russian Federation as No Longer in Force. In accordance with this decree, the export of narcotic medicinal products within the framework of emergency aid and for humanitarian purposes is carried out by legal entities under the jurisdiction of the Ministry of Health of Russia and the Ministry of Emergency Situations of Russia, provided they hold a license. A confirmation of the targeted purpose of the narcotic medicinal products, issued by the Ministry of Health of Russia, is also required.

In the case of the export of narcotic drugs, psychotropic substances, and their precursors, if they are medicinal products, it is necessary to obtain a certificate for the right to import (export) narcotic drugs, psychotropic substances, and their precursors, if they are medicinal products, in accordance with the Administrative Regulation of the Federal Service for Surveillance in Healthcare for the provision of the state service for issuing certificates for the right to import (export) narcotic drugs, psychotropic substances, and their precursors, if they are medicinal products, approved by Order of Roszdravnadzor No. 3588 dated May 15, 2019.

Export of Medicinal Products for Personal Purposes

Medicinal products manufactured in the Russian Federation may also be exported by individuals for personal needs. Individuals may export registered and unregistered medicinal products that do not contain narcotic or psychotropic substances from the Russian Federation without submitting any permit documents to the customs authorities. As a rule, it is not difficult for an average person to export medicinal products for personal use, with the exception of narcotic and psychotropic drugs, as well as drugs subject to subject-to-quantitative accounting; however, it is recommended to have a doctor's prescription when crossing the border.

However, if a medicinal product contains narcotic or psychotropic substances, an individual may export them from the Russian Federation for personal use for medical reasons if they possess supporting medical documents. Such products are subject to mandatory written customs declaration using a passenger customs declaration in accordance with Decision of the Board of the Eurasian Economic Commission No. 124 dated July 23, 2019, On Customs Declaration of Goods for Personal Use.

Packaging and Labeling of Exported Medicinal Products

An important element of exporting medicinal products is their packaging. The packaging of medicinal products and transport containers play a vital role in preserving therapeutic properties, as they protect the medicinal products from the harmful effects of external adverse environmental factors. Within the territory of the Eurasian Economic Union, the requirements for the labeling of medicinal products are established by Decision of the Council of the Eurasian Economic Commission No. 76 dated November 3, 2016, On Approval of the Requirements for the Labeling of Medicinal Products for Medical Use and Veterinary Medicinal Products. The labeling of medicinal products must be applied to the packaging in the Russian language and, if there are relevant requirements in the legislation of the EAEU member states, in the state language of the member state in whose territory the medicinal products are sold. The additional use of other languages is allowed provided the information is completely identical. At the same time, the labeling of medicinal products must not contradict or distort the information contained in the registration dossier documents and must not be of an advertising nature.

The Federal Law On Medicinal Products [10], which was in force until the Law on Circulation of Medicinal Products took effect, provided a norm stating that medicinal products intended exclusively for export bore the inscription "For export only". In the 2010 Law on Medicinal Products, medicinal products, like any goods, must have appropriate packaging and labeling for each type. The packaging of medicinal products intended exclusively for export is labeled in accordance with the requirements of the importing country [11].

Export of Falsified, Substandard, and Counterfeit Medicinal Products

Another case of exporting medicinal products from the Russian Federation is the export of falsified, substandard, and counterfeit medicinal products. The export of such medicinal products is carried out on the basis of Decree of the Government of the Russian Federation No. 1447 dated September 15, 2020 [12]. In accordance with Clause 3 of the Rules approved by this decree, if facts of import into the territory of the Russian Federation or facts of circulation within the territory of the Russian Federation of falsified medicinal products and (or) substandard medicinal products are identified, Roszdravnadzor adopts a decision obliging the owner of said medicinal products to carry out their seizure and destruction or export in full from the territory of the Russian Federation.

Within the EAEU framework, the rules of Good Distribution Practice within the Eurasian Economic Union have been approved [13], which also regulate the rules for exporting medicinal products. For example, an organization exporting medicinal products must hold a license or other legal grounds in accordance with the legislation of the member states to carry out medicinal product distribution activities or a license to manufacture medicinal products. When exporting medicinal products, the exporting organization must ensure that the supply is made to persons who have legal grounds to receive the medicinal products in accordance with the legislation of the relevant state for the distribution of these medicinal products.

Export of Medical Devices

Medical devices, like medicinal products, may also be exported from the territory of the Russian Federation. Medical devices manufactured in the Russian Federation for export outside the territory of the Eurasian Economic Union and not intended for use within the territory of the Eurasian Economic Union, as well as those manufactured in the Russian Federation for conducting research and development, and studies (tests), are not registered within the territory of the Russian Federation [14]. This norm shall lose force as of January 2, 2027, in accordance with Federal Law No. 128-FZ dated April 30, 2021 [15].

Similar to medicinal products, falsified medical devices and substandard medical devices are subject to seizure and subsequent destruction or export from the territory of the Russian Federation, while counterfeit medical devices are subject to seizure and subsequent destruction. The export from the territory of the Russian Federation of falsified medical devices and substandard medical devices is carried out at the expense of the person who imported them into the territory of the Russian Federation [16].

Medical devices that are in circulation within the territory of the Russian Federation and have series, batch, or lot numbers, or other identification features corresponding to identified falsified or substandard medical devices, are subject to export from the territory of the Russian Federation at the expense of the person who imported them into the territory of the Russian Federation, or to destruction [17].

Customs Clearance of Exported Medical Devices

Despite the absence of state registration for exported medical devices within the territory of the Russian Federation, it is necessary to conduct customs clearance to export a medical device. The Federal Customs Service is responsible for compliance with customs procedures.

The following documents are required for export customs clearance:

• A foreign trade contract;
• An invoice (bill for payment) and confirmation of payment if payment was made;
• A packing list;
• Technical documents for the equipment.

Depending on the type of transport used to export the medical devices, other regulatory documents governing the export of medical devices may be added.

Restrictions on the Export of Medical Devices Due to COVID-19 and Sanctions Imposed Against Russia by Foreign States

Taking into account the sanitary and epidemiological situation in the country or region, a temporary ban on the export of certain items of medical devices outside the territory of the Russian Federation may be established.

Thus, in March 2020, personal protective equipment ("PPE") (masks, respirators, goggles, etc.) was temporarily prohibited for export [18]. In addition to the established ban on exporting the aforementioned goods from Russia, a ban was established for the export from the customs territory of the Eurasian Economic Union of personal protective equipment, protective and disinfecting agents, medical products, and materials [19]. The restrictions imposed on the export of certain groups of medical devices were related to the spreading new coronavirus infection COVID-19, the shortage of personal protective equipment, and the need to provide them to the country's residents and the medical personnel of medical organizations.

The Government of the Russian Federation is entitled to adopt restrictions on the export of medical devices. Amendments introduced on March 8, 2022, consolidated this norm in Clause 24 of Article 38 of Federal Law No. 323-FZ dated November 21, 2011, On the Fundamentals of Health Protection of Citizens in the Russian Federation (the "Law No. 323-FZ"): "Under conditions of the introduction of restrictive measures of an economic nature against the Russian Federation, the Government of the Russian Federation is entitled to adopt a decision to establish restrictions on the export from the Russian Federation of medical devices previously imported into the Russian Federation from the territories of foreign states that have adopted a decision to introduce restrictive measures of an economic nature against the Russian Federation".

Taking into account Federal Law No. 164-FZ dated December 8, 2003, On the Fundamentals of State Regulation of Foreign Trade Activity, the Government of the Russian Federation issued Decree No. 312 dated March 9, 2022, On Introducing on a Temporary Basis a Permit Procedure for the Export of Certain Types of Goods Outside the Territory of the Russian Federation, which, up until December 31, 2022, established a permit procedure for the export outside the territory of the Russian Federation to the territories of member states of the Eurasian Economic Union of certain types of medical products. Permits for the export of goods specified in the decree are issued by the Federal Service for Surveillance in Healthcare. The permit procedure does not apply to exports to the Donetsk People's Republic, the Luhansk People's Republic, Abkhazia, South Ossetia, and the Republic of Belarus within the framework of the Union State.

Also, as part of the introduction of anti-crisis measures, Decree of the Government of the Russian Federation No. 302 dated March 6, 2022, On Introducing a Temporary Ban on the Export Outside the Russian Federation of Medical Devices Previously Imported into the Russian Federation from the Territory of Foreign States that Adopted a Decision to Introduce Restrictive Measures of an Economic Nature Against the Russian Federation, established a temporary ban on the export from the Russian Federation of medical devices manufactured in the territory of foreign states that adopted a decision to introduce restrictive measures of an economic nature against the Russian Federation and previously imported into the Russian Federation from the territory of such foreign states, except for the export of such products for providing international humanitarian aid to foreign states based on decisions of the Government of the Russian Federation, as well as the export of said products by individuals for personal use. The term of the temporary ban was set until December 31, 2022; however, this decree is currently repealed on the basis of Decree of the Government of the Russian Federation No. 390 dated March 17, 2022, On Amending and Recognizing Certain Acts of the Government of the Russian Federation as No Longer in Force.

The list of goods for which an export ban was introduced was approved by Decree of the Government of the Russian Federation No. 311 dated March 9, 2022, On Measures to Implement the Decree of the President of the Russian Federation No. 100 dated March 8, 2022. The list included various medical products, for example, disposable sheets or wipes used during surgical operations, microscopes, breathing equipment, X-ray apparatus, instruments and devices used in surgery and dentistry, etc. At the same time, the conditions must be met that these must be medical devices delivered from states that have introduced restrictive measures of an economic nature against Russia and are currently in importers' warehouses or undergoing customs procedures.

In accordance with Decree of the Government of the Russian Federation No. 430 dated April 3, 2020, On the Features of the Circulation of Medical Devices, Including State Registration of a Series (Batch) of a Medical Device, reusable medical devices imported into the Russian Federation that are not registered after January 1, 2025, are subject to destruction or export from the territory of the Russian Federation [20]. In the original version of this decree, its term of validity was limited to January 1, 2021, then it was changed to January 1, 2022, and in the current version, the term is set "after January 1, 2025".

The restrictions imposed on the export of medical devices and medicinal products become a forced measure each time. Each time such a restriction is introduced, the legislator makes a responsible decision; all possible further risks must be weighed, but often the principle of legal regulation is directly related to the safety, quality, and efficacy of medicinal products and medical devices, and the possibility of providing them to medical organizations and domestic consumers.

Given the dynamically changing situation in the market for medicinal products and medical devices, the rules for exporting medical devices and medicinal products must be checked each time for the presence or absence of bans and restrictions on the part of the state.

_______________

References

[1] Order of the Ministry of Industry and Trade of Russia No. 965 dated October 23, 2009, On Approval of the Strategy for the Development of the Pharmaceutical Industry of the Russian Federation for the Period until 2020.

[2] Decree of the Government of the Russian Federation No. 305 dated April 15, 2014, On Approval of the State Program of the Russian Federation "Development of the Pharmaceutical and Medical Industry".

[3] Order of the Ministry of Health of Russia No. 66 dated February 13, 2013, On Approval of the Strategy for Drug Provision of the Population of the Russian Federation for the Period until 2025 and Its Implementation Plan.

[4] Agreement on Unified Principles and Rules for the Circulation of Medicinal Products within the Framework of the Eurasian Economic Union. (Concluded in Moscow on December 23, 2014).

[5] Federal Law No. 164-FZ dated December 8, 2003, On the Fundamentals of State Regulation of Foreign Trade Activity.

[6] GOST R 52249-2009. National Standard of the Russian Federation. Rules for the Manufacture and Quality Control of Medicinal Products. (Approved and enacted by Order of Rostekhregulirovanie No. 159-st dated May 20, 2009).

[7] Decree of the Government of the Russian Federation No. 59 dated February 7, 2011, On Providing Information on the Import of Medicinal Products into the Russian Federation and the Export of Medicinal Products from the Russian Federation.

[8] Civil Code of the Russian Federation (Part Four) No. 230-FZ dated December 18, 2006.

[9] Decree of the Government of the Russian Federation No. 1577 dated September 18, 2021, On Approval of the Rules for the Export of Narcotic Drugs and Psychotropic Substances Intended for Providing Humanitarian Aid (Assistance) or Aid in Emergency Situations, and Recognizing Certain Acts of the Government of the Russian Federation as No Longer in Force.

[10] Federal Law No. 86-FZ dated June 22, 1998, On Medicinal Products.

[11] Clause 9 of Article 46 of the Law No. 61-FZ.

[12] Decree of the Government of the Russian Federation No. 1447 dated September 15, 2020, On Approval of the Rules for the Destruction of Seized Falsified Medicinal Products, Substandard Medicinal Products, and Counterfeit Medicinal Products.

[13] Decision of the Council of the Eurasian Economic Commission No. 80 dated November 3, 2016, On Approval of the Rules of Good Distribution Practice within the Framework of the Eurasian Economic Union.

[14] Clause 3 of Part 5 of Article 38 of the Law No. 323-FZ.

[15] Federal Law No. 128-FZ dated April 30, 2021, On Amending the Federal Law "On the Fundamentals of Health Protection of Citizens in the Russian Federation" and Articles 12 and 22 of the Federal Law "On Licensing Certain Types of Activities".

[16] Clause 18 of Article 38 of the Law No. 323-FZ.

[17] Decree of the Government of the Russian Federation No. 1440 dated September 15, 2020, On Approval of the Rules for the Destruction of Seized Falsified Medical Devices, Substandard Medical Devices, and Counterfeit Medical Devices. The document lost force as of September 1, 2022.

[18] Decree of the Government of the Russian Federation No. 223 dated March 2, 2020, On Introducing a Temporary Ban on the Export of Certain Types of Products from the Russian Federation. The document lost force on April 30, 2020.

[19] Decision of the Board of the EEC No. 41 dated March 24, 2020, On Amending the Decision of the Board of the Eurasian Economic Commission No. 30 dated April 21, 2015 "On Non-Tariff Regulation Measures".