Launch of a Medicinal Product onto the Russian Pharmaceutical Market

 

December 28, 2023

 

The term "launch" refers to the process of introducing a medicinal product to the market. This is a highly prolonged, labor-intensive, and costly process.

In Russia, as in other countries, a large number of new medicinal products are registered and enter circulation annually. However, only a small fraction of products launched onto the market can be called truly successful from a financial perspective. Financial success is underpinned by a well-thought-out marketing strategy and the work of an entire team of specialists.

This article analyzes the legal aspects of a launch, the instruments manufacturers use when introducing a product to the market, and the restrictions imposed by legislation on their use.

Stages and Instruments of a Medicinal Product Launch

A launch typically takes between 1 and 3 years. Marketing specialists distinguish several launch stages:

• Forming a team of specialists, developing a marketing strategy, and formulating tasks for the upcoming campaign (pre-launch);
• Launching the product onto the market;
• A 6-month window during which sales of the product must increase significantly;
• Stabilization of sales levels and consolidation of results [1].

The ideal result of a drug launch is to become a "blockbuster" (from the English "block" + "buster"). In marketing terms, this means achieving annual sales exceeding $1 billion over 15 years. Of course, such goals are not always set for the team; in some cases, a product launch is carried out to expand the portfolio of sold medicines or generate additional revenue.

Various instruments are used during the launch process:

• Advertising;
• Engagement with the medical community (activities of medical representatives, exhibitions, trainings, seminars, etc.);
• Public relations (PR);
• Collaboration with pharmacy chains;
• Other various promotion tools.

Below, we review the requirements and restrictions established by legislation regarding their application.

Advertising and Promotion of Medicinal Products

Advertising is one of the most critical instruments for promoting medicinal products. Under Article 3 of Federal Law No. 38-FZ dated March 13, 2006, "On Advertising" (hereinafter – the "Advertising Law" or "Law No. 38-FZ"), advertising is recognized as information disseminated in any way, in any form, and using any means, addressed to an indefinite circle of persons and aimed at attracting attention to the object of advertising, generating or maintaining interest in it, and promoting it in the market.

Thus, the method and form of information dissemination generally do not carry legal significance; regarding the classification of informational materials as advertising, the presence of the following characteristics is paramount:

• Addressability to an indefinite circle of persons;
• Aiming to attract attention to the object of advertising, generating or maintaining interest in it, and promoting it in the market.

In practice, advertising channels and placement locations are significant. During a drug launch, advertising is disseminated in mass media, on websites, in specialized print publications, via the distribution of brochures and leaflets, on electronic displays, etc. We will examine the specifics of advertising depending on the type of medicinal products advertised and the methods of dissemination.

Pursuant to Part 8 of Article 24 of Law No. 38-FZ, advertising of medicinal products dispensed by prescription is permitted only at medical or pharmaceutical exhibitions, seminars, conferences, and similar events, and in specialized print publications intended for medical and pharmaceutical workers.

Consequently, the advertising of prescription medicinal products (Rx products) on any advertising platforms intended for general consumers (in mass media, via distribution of advertising materials in pharmacies, on websites, etc.) is prohibited by law. A similar prohibition is established for the advertising of medicinal products containing narcotic drugs or psychotropic substances (Part 9 of Article 24 of Law No. 38-FZ).

Understanding the effectiveness of online resources as a promotion channel, pharmaceutical organizations seek ways to navigate the legislative prohibition. In particular, they create "closed" web portals intended solely for medical and pharmaceutical specialists, requiring verification of this fact upon registration and access to materials posted there. Another common practice involves mentioning products in blogger videos, placing contextual advertising, and posting product reviews on specialized platforms and review sites. Undoubtedly, such activities carry specific legal risks and require a thorough legal assessment prior to implementation.

Unlike prescription drugs, information regarding over-the-counter medicinal products (OTC products) may be contained in publications and announcements in mass media, specialized and general print publications, instructions for use of medicinal products, and other editions (Part 2 of Article 67 of Federal Law No. 61-FZ dated April 12, 2010, "On the Circulation of Medicinal Products", hereinafter – the "Law on Medicinal Products" or "Law No. 61-FZ").

However, when disseminating materials, it is also necessary to consider the requirements established by the Advertising Law. We review these in detail below:

• Advertising must be fair and truthful, complying with the content requirements provided by Articles 5–7 and 24 of the Advertising Law. Detailed requirements for advertising content can be found in our separate article on this topic [2].
• Statements in advertising regarding the properties and characteristics of medicinal products, including methods of use and application, are permitted only within the limits of the indications contained in the instructions for use.
• Advertising of medicinal products, regardless of the dissemination method, must be accompanied by a warning regarding the presence of contraindications for their use and application, the need to review the instructions for use, or the need to obtain a specialist consultation.

If advertising is disseminated in television programs, as well as during cinema and video services, the duration of such a warning must be at least 5 seconds, and it must occupy no less than 7% of the frame area.

In its Recommendations on Compliance with Legislation on Advertising of Over-the-Counter Medicinal Products, FAS Russia [3] also indicates: "the corresponding inscription must be executed in a readable font, using a contrasting color, and its reading must be possible without the use of additional optical means, and in the case of advertising videos – without pausing the frame. The indicated warning should also be included in other advertising on the 'Internet' regardless of the form of its presentation."

The warning requirements do not apply to advertising disseminated at medical or pharmaceutical exhibitions, seminars, conferences, and similar events, or to advertising consumed exclusively by medical and pharmaceutical workers.

Violators of requirements for medicinal product advertising may be held administratively liable under Part 5 of Article 14.3 of the Code of Administrative Offenses of the Russian Federation (CAO RF). The fine for officials ranges from 10,000 to 20,000 rubles; for legal entities – from 200,000 to 500,000 rubles.

At the same time, we note that despite strict regulation, a significant number of violations of the advertising law can be encountered during a launch. This is often due to the fact that businesses do not always understand when a particular activity carries risks of improper advertising. In this regard, we believe involving legal specialists to assess advertising materials and activities is crucial.

Interaction with the Medical Community during the Launch of a Pharmaceutical Product

The pharmaceutical market differs from others due to specific characteristics. In particular, for the promotion of a medicinal product, the interaction between the pharmaceutical worker (seller) and the patient (buyer) is not the only important factor. The physician is also a key figure, whose prescriptions and recommendations largely influence the choice of the product. Therefore, interaction with the medical community — conducting informational work in various forms — is vital for successful sales. However, when using this instrument, one must consider the restrictions imposed by current legislation on relationships with medical workers.

In accordance with Part 1 of Article 67.1 of Law No. 61-FZ, organizations engaged in the development, production, and (or) sale of medicinal products for medical use, organizations holding rights to the trade name of a medicinal product, wholesale trade organizations, and pharmacy organizations (their representatives, and other individuals and legal entities acting on behalf of these organizations) are not entitled to perform the following actions regarding medical workers and heads of medical organizations:

• Give gifts, pay monetary funds (except for remuneration under contracts for conducting clinical trials, and remuneration related to the medical worker's pedagogical and (or) scientific activities), including paying for entertainment, leisure, travel to a place of leisure, as well as inviting them to participate in entertainment events conducted at the organization's expense;
• Conclude agreements on the prescription or recommendation of medicinal products for medical use to patients (except for contracts on conducting clinical trials of medicinal products);
• Provide samples of medicinal products for medical use for the purpose of handing them over to patients (except for cases related to conducting clinical trials of medicinal products);
• Provide false and (or) incomplete information regarding medicinal products for medical use;
• Visit them at their workplaces during working hours, except for cases related to conducting clinical trials of medicinal products, participation in meetings of medical workers, and other events aimed at improving their professional level or providing information related to monitoring the safety of medicinal products;
• Induce the prescribing of medicinal products for medical use on forms containing advertising information, as well as on prescription forms with the pre-printed trade name of the medicinal product.

Let us comment on these norms. As a general rule, the Law on Medicinal Products prohibits visiting medical workers at their workplaces. One exception is participation in meetings and other events aimed at improving their professional level. The procedure for participation in such meetings and other events is regulated by the local act of the medical organization, which is usually posted on the medical organization's official website.

Provision of information on medicinal products may also be carried out within the framework of scientific events, trainings, master classes, and exhibitions. Russian legislation contains no prohibition on medical workers participating in such events. Article 67.2 of the Law on Medicinal Products establishes requirements for the organization and holding of scientific and other events aimed at improving the professional level of medical workers, which manufacturers of medicinal products must observe, specifically:

1. It is prohibited to impede the participation in said events of other organizations that manufacture or sell medicinal products with a similar mechanism of pharmacological action, or to create discriminatory conditions for some participants compared to others, namely:

1) provide different amounts of time for participants' speeches, or different sizes of space for demonstrating samples of medicinal products or advertising materials at expositions and stands, unless such conditions are enshrined in agreements between these organizations regarding the financing of said events and are conditioned by the participants' varying costs for their organization;

2) establish a participation fee that exceeds the costs of organizing said events and leads to an unjustified restriction on the number of participants.

2. Organizations arranging and (or) financing said events are obligated to ensure access to information regarding the date, place, and time of said events, plans, programs, and topics planned for consideration, and the composition of participants. Information is communicated by posting on their official websites on the Internet no later than two months prior to the start of said events. Furthermore, it must be sent to Roszdravnadzor no later than two months prior to the event for subsequent posting on its official website.

We also draw attention to the fact that the Law on Medicinal Products prohibits sampling (free distribution of medicinal products for the purpose of subsequent handover to the patient). However, legally, current legislation does not prohibit transferring samples of medicinal products, as well as methodological literature and models, to medical workers for demonstration to patients and explanation of treatment methods, provided there is no subsequent transfer to patients. An exception is conducting advertising campaigns accompanied by the distribution of samples of medicinal products containing narcotic drugs and psychotropic substances (Part 10 of Article 24 of Law No. 38-FZ).

The procedure for interaction with healthcare specialists is detailed in the Code of Practice of the Association of International Pharmaceutical Manufacturers (AIPM) (hereinafter – the "AIPM Code of Practice"), which is mandatory for Association members.

According to Clause 3.1.1 of the AIPM Code of Practice, interaction between pharmaceutical companies and healthcare specialists must be aimed at benefiting patients and improving medical practice. The goal of such interaction should be to provide healthcare specialists with new information about pharmaceutical products, ensure they have scientific and educational information, and support scientific and clinical research.

It is not permitted to offer, promise, provide, or transfer remuneration in any form to healthcare specialists for prescribing or recommending a specific pharmaceutical product to patients, or to conclude agreements with them regarding the prescription or recommendation of any pharmaceutical product to patients (except for contracts on conducting clinical trials of pharmaceutical products).

Companies must not organize or finance events held outside the country of residence and practice of the healthcare specialists, unless appropriate for logistical and security reasons.

Pharmaceutical companies may provide samples of pharmaceutical products exclusively to non-profit medical organizations for the purpose of familiarization with the use of pharmaceutical products and gaining experience in working with them according to the approved instructions for use. In this case, the company is obliged to inform the recipient of the samples about the remaining shelf life of the pharmaceutical product offered for transfer. Samples may be provided only within two years from the moment of the pharmaceutical product's launch onto the Russian market. The quantity of samples transferred to a medical organization must be reasonable and must not exceed 4 (four) packs (samples) per year per one medical worker of the relevant profile in the given medical organization. The transfer of samples to a medical organization must be documented in writing. The documentation must state that the samples are not intended for sale.

Observance of these restrictions is extremely important to avoid accusations of corruption violations, as in practice there have been attempts to initiate criminal cases against representatives of pharmaceutical companies for bribing physicians at medical institutions to prescribe medicines manufactured by a specific pharmaceutical company [4].

Charity and Public Relations during the Launch of Pharmaceutical Products

To gain experience in working with a medicinal product in a professional environment, pharmaceutical companies often offer to transfer it gratuitously to medical organizations as charitable aid.

Pursuant to Article 2 of Federal Law No. 135-FZ dated August 11, 1995 "On Charitable Activities and Volunteering" charitable activities are carried out, inter alia, to facilitate activities in the sphere of prevention and protection of citizens' health. When providing charitable aid, one should also consider the provisions of Article 575 of the Civil Code of the Russian Federation, which prohibits gifts between commercial organizations.

Thus, if a medical organization is established in the form of a non-profit organization, it is not prohibited to accept medicinal products gratuitously for use in its activities. The transfer is carried out based on a donation agreement.

Clauses 6.1.3 – 6.1.6 of the AIPM Code of Practice establish the following additional rules for making donations:

• The provision of a donation may under no circumstances be directly or indirectly made conditional upon the prescription or purchase of the company's pharmaceutical products;
• Providing donations in the form of cash is prohibited;
• Provision of pharmaceutical products as donations to non-profit medical organizations is permitted provided that such donations do not pursue commercial goals. The company is obliged to inform the donation recipient of the remaining shelf life of the pharmaceutical product;
• Donations may be provided only based on a written request from the non-profit organization and a written donation agreement.

To avoid negative consequences, we recommend providing for the following in the donation agreement:

• The targeted nature of the medicinal product transfer (assistance in the sphere of health protection, provision of medical care, etc.) without the right of transfer or other commercial use;
• A condition that the agreement is not concluded as a reward for the medical organization's past, present, or future willingness to prescribe, appoint, recommend, purchase, or pay for medicinal products.

Regarding other methods of sales stimulation, we draw attention to the following restrictions established in the AIPM Code of Practice:

• The use of pharmaceutical products as prizes and incentives is not permitted;
• Direct distribution of free samples of pharmaceutical products to the public for advertising purposes, including conducting tastings and trials of pharmaceutical products, is not permitted.

Thus, current legislation does not impose significant restrictions on public relations activities. However, it is necessary to assess legal risks for the absence of signs of unfair competition.

Agreements with pharmacies

Given the presence of a large number of products on the pharmaceutical market, including generics, even the prescription or recommendation of a medicinal product by a physician does not guarantee its purchase by the patient. Therefore, during the launch of pharmaceutical products, it is necessary to work not only with medical workers but also with pharmacy employees.

In practice, pharmaceutical companies conclude marketing agreements with pharmacies aimed at promoting the medicinal product. These may provide for the implementation of activities such as:

• Placement of advertising information materials and advertising equipment in the pharmacy premises;
• Implementation by the pharmacy of priority display of the medicinal product in the checkout zone and on showcases;
• Conducting advertising events and campaigns in the sales area;
• Giving gifts to buyers upon purchase of a specific product, which may contain the logo of the company or medicinal product, etc.

However, as with medical workers, legislation also establishes a number of restrictions on relationships with pharmacy workers. Pursuant to Part 2 of Article 67.1 of Law No. 61-FZ, organizations engaged in the development, production, and (or) sale of medicinal products for medical use, organizations holding rights to use the trade name of a medicinal product for medical use, wholesale trade organizations dealing in medicinal products, and their representatives are not entitled to perform the following actions regarding pharmaceutical workers and heads of pharmacy organizations:

• Give gifts, pay monetary funds, including paying for entertainment, leisure, travel to a place of leisure, and invite them to participate in entertainment events conducted at the organization's expense;
• Provide samples of medicinal products for medical use for handing over to the public;
• Conclude agreements on offering specific medicinal products for medical use to the public;
• Provide false and (or) incomplete information regarding medicinal products for medical use, including those having the same International Nonproprietary Name (INN).

Thus, conducting a marketing campaign in a pharmacy that involves gifting medicinal products to buyers, or the possession by a pharmacy worker of souvenir products from manufacturers or distributors of medicinal products, may be interpreted by control authorities as a violation of the aforementioned legal norm. Also, to avoid negative consequences, we recommend carefully formulating the terms of marketing agreements, avoiding obligations to offer the pharmaceutical company's products to consumers or to issue samples.

The AIPM Code of Practice provides for additional restrictions that Association members should consider:

• Programs aimed at reducing the cost of a pharmaceutical product for the end consumer are permitted. In the event such programs are conducted regarding a pharmaceutical product dispensed by prescription, pharmaceutical companies are obliged to ensure that the total number of units of the pharmaceutical product under no circumstances exceeds the amount prescribed by the healthcare specialist to the specific patient.
• Pharmaceutical companies are not entitled to organize programs under which they provide material prizes to pharmaceutical workers, heads of pharmacy organizations, and pharmacy organizations for achieving certain sales results.

There is no direct rule of law establishing liability for violating these prohibitions and restrictions. Typically, liability for such violations arises under Article 6.29 of the CAO RF "Failure to perform duties to provide information regarding a conflict of interest when carrying out medical activity and pharmaceutical activity". The fine for a pharmaceutical or medical worker ranges from 3,000 to 5,000 rubles. In practice, there are also cases of liability under Part 3 of Article 14.1 of the CAO RF "Implementation of entrepreneurial activity in violation of requirements and conditions provided by a special permit (license)", for which the fine amount is more significant.

Specifics of Launching Foreign-Made Medicinal Products onto the Russian Market

We will provide an overview of the specifics of introducing a foreign product to the Russian market.

Prior to market launch, a medicinal product registered in foreign states must pass at least several stages:

1. Clinical trials – for original drugs; confirmation of bioequivalence – for generics involving Russian volunteers.

2. Registration of the medicinal product with the authorized body – the Ministry of Health of the Russian Federation, under the rules of the Eurasian Economic Union (EAEU).[5] On average, registration takes at least 1 year.

3. Obtaining permission for introduction into civil circulation in accordance with the rules established by the Government of the Russian Federation [6].

On average, due to the changing global situation, obtaining permission in recent years has taken foreign pharmaceutical manufacturers more than nine months.

Due to the imposition of economic sanctions against the Russian Federation and to prevent the risk of shortage (defectura) of foreign medicinal products, there are also alternative options for introduction into circulation:

• Importation of medicinal products not registered in Russia or products in packaging intended for circulation in foreign states by permission of the Ministry of Health of the Russian Federation [7];
• Inclusion in the List of medicinal products purchased by the "Circle of Kindness" Foundation.

However, this path is not suitable for all products; it is a temporary solution and relates more to exceptions to general rules.

It may also require in the event of the medicinal product's inclusion in the List of Vital and Essential Drugs (VED List) approved by the order of the Russian Government [8] registration of the maximum selling price for the product in accordance with the rules established by the Russian Government [9]. This stage is critical, especially for expensive medicinal products, because without inclusion in the VED List, mass procurement of the medicinal product for providing medical care within the framework of the Program of State Guarantees of Free Medical Care is impossible. We note that according to "Pharmaceutical Bulletin" data, in 2022, the Russian Ministry of Health recommended 19 drugs for inclusion in the VED List for 2023, but only five were included [10].

Thus, medicinal products not registered within the EAEU must undergo lengthy and labor-intensive work before launching onto the Russian market.

Summarizing the above, we note that a launch is a complex project requiring the development of a sophisticated strategy and the application of diverse promotion instruments. Its success clearly requires an entire team of qualified specialists: marketers, HR specialists, financiers, medical representatives, and others. Furthermore, in our opinion, during the launch of a medicinal product, it is equally important to involve legal profile specialists who will help implement a compliance system and minimize legal risks when conducting the launch.

___________________________

[1] Pavel Feldman. Launch of a product on the pharmaceutical market as a startup // Izdatelskie Resheniya, 2022.

[2] R. Shabrov, A. Ivanova. Promotion and advertising of medicinal products: legal aspect. June 1, 2021 // Source: https://brace-lf.com/informaciya/farmatsevticheskoe-i-meditsinskoe-pravo/1521-prodvizhenie-i-reklama-lekarstvennykh-sredstv-yuridicheskij-aspekt

[3] Published on the FAS Russia website as of 11/09/2018.

[4] STADA: Our employee received no instructions contradicting current legislation. 05/30/2014. // Pharmaceutical Bulletin.

[5] Decision of the Council of the Eurasian Economic Commission dated 11/03/2016 "On the Rules for Registration and Examination of Medicinal Products for Medical Use".

[6] Decree of the Government of the Russian Federation dated 11/26/2019 No. 1510 "On the Procedure for Introduction into Civil Circulation of Medicinal Products for Medical Use".

[7] Decree of the Government of the Russian Federation No. 593 dated 04/05/2022 "On the Specifics of Circulation of Medicinal Products for Medical Use in Case of Shortage or Risk of Shortage of Medicinal Products Due to the Introduction of Restrictive Economic Measures Against the Russian Federation".

[8] Order of the Government of the Russian Federation dated 10/12/2019 No. 2406-r "On Approval of the List of Vital and Essential Drugs, as well as Lists of Medicinal Products for Medical Use and the Minimum Assortment of Medicinal Products Necessary for Providing Medical Care".

[9] Decree of the Government of the Russian Federation dated 10/29/2010 No. 865 "On State Regulation of Prices for Medicinal Products Included in the List of Vital and Essential Drugs".

[10] E. Voronina, V. Doguzova. UPD. Don't touch, it's for New Year! How innovative medicines enter the Russian market after February 2022. 12/26/2023. // 2020, No. 30 (1129).