22 January 2023

Shortage or Risk of Shortage of Medicines: Features of Registration, Price Regulation, Import, and Release into Circulation

January 22, 2023

BRACE Law Firm ©

The imposition of restrictive economic measures against the Russian Federation led to problems with the supply of several medicinal products imported from foreign states.

In recent years, the Government of Russia pursued an import substitution policy by introducing various support measures for manufacturers of medicinal products and active pharmaceutical ingredients. Thus, in 2021, the Ministry of Industry and Trade of the Russian Federation developed the Action Plan for Import Substitution in the Pharmaceutical Industry of the Russian Federation until 2024, which envisaged increasing the share of medicines fully produced within Russia to 100% for certain items. However, this process cannot be completed quickly, as it requires significant financial resources, restructuring of logistics chains, and development of scientific technologies.

In the context of sanctions applied against Russia, urgent measures were required to prevent shortages of medicinal products. To this end, Federal Law No. 46-FZ dated March 8, 2022, On Amending Certain Legislative Acts of the Russian Federation, (the "Law No. 46-FZ"), was adopted. Article 6 of this Law granted the Government of Russia, in the event of a "shortage or risk of a shortage of medicinal products", the authority to determine:

specific features of medicinal product circulation;
specific features of amending the registration dossier for registered medicinal products;
specific features of state regulation of initial maximum selling prices for medicinal products included in the List of Vital and Essential Drugs.

To exercise the powers transferred under the Law No. 46-FZ, in March and April 2022, the Government of Russia:

Adopted Decree of the Government of the Russian Federation No. 593 dated April 5, 2022, On the Specific Features of the Circulation of Medicinal Products for Medical Use in the Event of a Shortage or Risk of a Shortage of Medicinal Products Due to the Imposition of Restrictive Economic Measures Against the Russian Federation (the "Decree No. 593"), which established:
- specific features of state registration of medicinal products;
- specific features of amending registration dossier documents for active pharmaceutical ingredients;
- specific features of the import and circulation of medicinal products not registered in Russia;
- specific features of the import and circulation of medicinal products registered in Russia in packaging intended for circulation in foreign states;
- rules for the release into civil circulation of medicinal products for medical use.
Adopted Decree of the Government of the Russian Federation No. 440 dated March 23, 2022, On Approval of the Specific Features of Amending Documents Contained in the Registration Dossier for a Registered Medicinal Product for Medical Use in the Event of a Shortage or Risk of a Shortage of Medicinal Products Due to the Imposition of Restrictive Economic Measures Against the Russian Federation (the "Decree No. 440");
Adjusted the features of state regulation of maximum selling prices of manufacturers for medicinal products included in the VED List, approved by Decree of the Government of the Russian Federation No. 1771 dated October 31, 2020, On Approval of the Specific Features of State Regulation of Manufacturers' Maximum Selling Prices for Medicinal Products Included in the List of Vital and Essential Drugs and Amending Certain Acts of the Government of the Russian Federation (the "Decree No. 1771").

As a general rule, these features will remain in effect until December 31, 2023. Let us consider them in more detail.

What is a "Medicinal Product Shortage"?

Before examining this topic, we must define the term "shortage". This concept is not explicitly defined in Federal Law No. 61-FZ dated April 12, 2010, On the Circulation of Medicinal Products (the "Law on Circulation of Medicinal Products"), nor in the Decrees of the Government of Russia.

In pharmaceutical industry practice, a shortage is understood as the absence of medicinal products. The Ministry of Health of Russia provides a similar understanding in its Letter No. 2591-VS dated June 3, 2005, On the Shortage of Medicinal Products in Pharmacy Organizations during Supplemental Drug Provision for Certain Categories of Citizens who Receive Social Services, namely: a medicinal product shortage in pharmacy organizations participating in the supplemental drug provision system for certain categories of citizens should be considered the absence of medicinal products (INN) required to provide patients with medicines based on prescriptions issued by doctors (paramedics) at the time the prescription is presented to the pharmacy organization.

The reasons for a shortage may vary:

re-registration of a medicinal product;
identification of a defective batch of the product;
stoppage of production;
imposition of restrictions on the import of the product;
surge in buyer demand, etc.

Note that in this context, we refer only to shortages associated with the imposition of economic sanctions against Russia.

A shortage or the risk of its occurrence is determined by an interdepartmental commission established under the Ministry of Health of Russia. The composition, formation procedure, and activities of the commission are defined by Order of the Ministry of Health of Russia No. 339n dated May 19, 2022 (the "Order No. 339n"). The interdepartmental commission includes representatives of federal executive bodies: the Ministry of Health of Russia, the Ministry of Industry and Trade of Russia, Roszdravnadzor, the Ministry of Finance of Russia, the Federal Antimonopoly Service, the Federal Customs Service, and authorized federal institutions. Thus, the composition includes at least 15 people.

The commission is vested with the following powers:

issuing conclusions on the establishment of a fact of shortage or the risk of its occurrence;
issuing conclusions on the possibility (impossibility) of issuing a permit for the temporary circulation of a batch (lot) of an unregistered medicinal product;
issuing a conclusion on the possibility of circulation in the Russian Federation of a medicinal product in packaging intended for circulation in the territory of foreign states.

To determine a shortage, executive bodies and medicinal product circulation entities submit a proposal with supporting materials, including information on the excess of predicted medicinal product consumption volumes compared to the predicted volumes of its import or production in the Russian Federation. The list of medicinal products for which the interdepartmental commission has determined a shortage or the risk of its occurrence (the "List of Medicinal Products for which a Shortage or Risk of its Occurrence has been Determined"), is posted in the State Register of Medicinal Products (in the "Journal" section) for authorized users.

Following the adoption of the Order No. 339n, the pharmaceutical community pointed out certain regulatory deficiencies, leading the Ministry of Health to prepare amendments to this order. Specifically, a sample proposal for establishing a shortage or the risk of its occurrence was developed, and the list of documents attached to it was clarified. Medicinal product circulation entities will be able to participate in commission meetings without voting rights.

Specific Features of State Registration of Medicinal Products

A simplified registration procedure is established for medicinal products included in the List of Medicinal Products for which a Shortage or Risk of its Occurrence has been Determined.

The state registration of such products is carried out by the Ministry of Health of Russia within 60 business days from the date of receipt of the application and documents. This period includes the time for conducting the necessary expert examinations (quality expertise and expertise of the benefit-risk balance of the medicinal product). The list of documents required for registration is defined in paragraph 4 of the Decree No. 593.

If registration was carried out under the simplified procedure, registration certificates for the products are issued with a limited validity period until December 31, 2023. Information on the state registration of medicinal products is entered into the State Register of Medicinal Products in the usual manner.

Registration may be canceled early at the request of the holder / owner of the registration certificate or upon receipt by the Ministry of Health of Russia of information regarding non-compliance with the conditions provided for by the registration certificate.

Specific Features of Amending the Registration Dossier for a Medicinal Product and an Active Pharmaceutical Ingredient

Recall that a registration dossier is understood as a set of documents submitted for state registration or the introduction of amendments to such documents, as well as copies of decisions adopted by the registration authority regarding a medicinal product or an active pharmaceutical ingredient.

Specific features of amending the registration dossier for a registered medicinal product are established by the Decree No. 440. It provides for two options for amending the dossier under a simplified procedure — without conducting a quality expertise and with conducting a quality expertise:

1. Amendments without conducting a quality expertise are carried out in the following cases:

replacement and (or) addition of manufacturers and (or) suppliers of raw and auxiliary materials (reagents, intermediate products, culture media and their components, filters, sorbents, consumables, bags, hoses, etc.);
replacement and (or) addition of manufacturers and (or) suppliers of equipment used in the production process of an active pharmaceutical ingredient or a medicinal product, as well as changes in the production process related to the use of equipment;
replacement and (or) addition of manufacturers and (or) suppliers of standard samples, reagents, materials, and equipment used in analytical control processes, as well as changes in analytical methods;
replacement and (or) addition of manufacturers of the primary packaging of an active pharmaceutical ingredient;
change in the batch size (including batch size ranges) of a medicinal product or an active pharmaceutical ingredient;
change in any component of the packaging (packaging material);
replacement and (or) addition of a manufacturer of an active pharmaceutical ingredient (including a change in the site of a production stage of the active pharmaceutical ingredient) provided that such an active pharmaceutical ingredient is included in the state register of medicinal products.

2. Amendments involving a quality expertise, which is carried out under an expedited procedure (within 15 business days from the date the Ministry of Health issues the task), are carried out in the following cases:

replacement and (or) addition of manufacturers of excipients included in an active pharmaceutical ingredient or a medicinal product;
replacement and (or) addition of manufacturers of the primary packaging of a medicinal product;
replacement and (or) addition of a manufacturer of an active pharmaceutical ingredient (including a change in the place of production of the active pharmaceutical ingredient) provided that information on such an active pharmaceutical ingredient is not contained in the state register of medicinal products;
replacement and (or) addition of one or more participants in the medicinal product production process (places of production);
change and (or) addition of quality indicators, methods for determining quality indicators, and (or) addition (deletion) of an alternative method for determining quality.

To initiate amendments, an application must be submitted to the Ministry of Health of Russia, along with proposals for amendments with a reasoned justification, information on the conclusion of the interdepartmental commission on the existence of a shortage, and the details of documents confirming the payment of the state fee.

A decision to introduce amendments or a refusal is made within 10 business days from the date of receipt, or, if an expertise is required, within a period not exceeding 25 business days.

Similar norms are also provided for by the Decree No. 593, which regulates the specific features of amending the registration dossier for active pharmaceutical ingredients.

Specific Features of the Import and Circulation of Unregistered Medicinal Products

Until December 31, 2023, the Decree No. 593 permits the temporary circulation of medicinal products not registered in the territory, provided that:

there are analogues registered in the Russian Federation by International Nonproprietary Name;
the product is authorized for medical use in foreign states by the relevant authorized bodies.

For this purpose, a permit for temporary circulation from the Ministry of Health of Russia is required, which is issued based on the conclusion of the interdepartmental commission on the existence of a shortage. The permit is issued for a batch (lot) of the medicinal product. To obtain it, the applicant must provide the package of documents listed in paragraph 24 of the Decree No. 593 to the Ministry of Health of the Russian Federation.

Within 10 business days from the date of receipt of the documents, the Ministry of Health of the Russian Federation makes a decision to issue or refuse to issue the permit. This period includes the time for obtaining the conclusion of the interdepartmental commission. The register of issued permits is posted on the official website of the Ministry of Health of Russia.

Each package of a batch (lot) of such a medicinal product must be accompanied by instructions for medical use translated into Russian. The use of primary and secondary (consumer) packaging in the language of the manufacturer's country is permitted provided there is a self-adhesive label on the packaging containing the relevant information about the medicinal product in Russian. Identification means in the form of a two-dimensional barcode (labeling) are applied to the packaging of medicinal products.

Specific Features of the Import of Medicinal Products Registered in the Russian Federation in Packaging Intended for Circulation in Foreign States

Under part 3.2 of Article 47 of the Law on Circulation of Medicinal Products, the import of medicinal products registered in the Russian Federation in packaging intended for circulation in foreign states was permitted until December 31, 2022, without a special permit. Federal Law No. 519-FZ dated December 19, 2022, On Amending Certain Legislative Acts of the Russian Federation and Suspending Certain Provisions of Legislative Acts of the Russian Federation, introduced amendments to the Law on Circulation of Medicinal Products, extending the import period until December 31, 2024. Despite the fact that amendments to the Decree No. 593 have not yet been introduced, the circulation features continue to apply.

The import and circulation of such medicinal products are permitted based on a permit from the interdepartmental commission on shortage, provided they comply with the requirements established during registration, except for requirements for primary and secondary (consumer) packaging.

To obtain it, an application and the documents listed in paragraph 36 of the Decree No. 593 must be submitted to the Ministry of Health. The interdepartmental commission makes a decision to issue or refuse the documents within 10 business days from the date of receipt.

The Decree No. 593 establishes the following rules for the release into circulation of such medicinal products:

a label containing information about the product in Russian must be affixed to the consumer and primary (if applicable) packaging;
each package of a batch (lot) of the medicinal product must be accompanied by instructions for medical use translated into Russian, approved by the authorized body of the manufacturer's country or the registration certificate holder;
labeling (a two-dimensional barcode) is applied to the secondary packaging (or the primary packaging, if the secondary is absent).

Specific Features of State Price Regulation in Conditions of Shortage and Risk of Shortage of Medicinal Products

Under part 9 of Article 61 of the Law on Circulation of Medicinal Products, the Government of Russia is vested with the right to establish specific features of the state regulation of manufacturers' maximum selling prices for medicinal products included in the VED List, depending on economic and (or) social criteria, including changes in the foreign currency exchange rate. These features were established by the Decree of the Government of Russia No. 1771 dated October 31, 2020. In order to prevent a shortage, Decree of the Government of Russia No. 444 dated March 23, 2022, clarified the procedure and shortened the deadlines for the re-registration of prices.

To re-register a price for the VED List upwards, it is no longer necessary to wait a year from the date of the previous price registration. In accordance with the new rules, the Ministry of Health of Russia, no later than 2 business days from the date of receipt of information on a shortage from medicinal product circulation entities, forwards it to Roszdravnadzor for monitoring. Roszdravnadzor requests the necessary information from registration certificate holders and authorized bodies and institutions, then within 7 business days forms a conclusion on a shortage or on the absence of medicinal products in circulation due to their pricing and submits the conclusion to the Ministry of Health of Russia. After receiving the conclusion, the Ministry of Health, within 2 business days, posts a proposal for the re-registration of the maximum selling price in the personal account of the holder (owner) of the registration certificate.

Changes also affected the index of deviation of medicine entry into circulation. If it exceeds 10%, this indicates a risk of a shortage of the product. Previously, the index was 30%.

In practice, questions arise regarding the pricing procedure for unregistered medicinal products and registered medicinal products in packaging intended for circulation in foreign states. According to FAS Russia, in order to prevent price gouging, general pricing principles established in the Russian Federation should be applied. The letter provides two approaches to pricing depending on the category of the imported product.

In the event that a medicinal product is planned for import and circulation that has analogues registered in Russia by INN, the manufacturer's actual selling price cannot exceed:

the maximum selling prices of manufacturers for analogues registered in Russia by INN and dosage form (including based on the cost of 1 dosage form and/or unit of the active substance);
the price fixed based on the results of the interdepartmental commission meeting (at the meetings, manufacturers confirm information on the import of such medicinal products at the relevant prices).

The maximum amounts of wholesale and retail markups to the manufacturer's actual selling price must not exceed the maximum markup amounts established in the relevant constituent entities of the Russian Federation.

In the event that a medicinal product is registered in Russia, but is planned for import and circulation in packaging intended for circulation in foreign states, including under a different trade name and produced at a manufacturing site not present in the Russian registration certificate.

The manufacturer's actual selling price cannot exceed the manufacturer's maximum selling price directly for this medicinal product registered in Russia (in the absence of registered prices for packaging that coincides with the imported one by the number of dosage forms in the consumer package — based on the cost of 1 dosage form).

Note that, in our view, the procedure for pricing medicinal products imported under the Decree No. 593 should be regulated in normative legal acts.

Release into Civil Circulation of Medicinal Products for Medical Use

Until the end of 2023, the release into civil circulation of medicinal products, except for immunobiological ones, as well as those authorized for circulation but not registered in the territory of the RF or registered in packaging for foreign states, takes place in accordance with the general procedure, subject to the following exceptions.

First, regarding the first three batches or lots of medicinal products produced in the Russian Federation for the first time or imported into the Russian Federation for the first time, release is carried out with testing for compliance with quality indicators provided for by the regulatory documentation for the product. In this case, testing is permitted using remote interaction tools, including via audio or video communication, in real time via video link.

Roszdravnadzor developed a Guide concerning the specific features of the release into civil circulation of medicinal products for medical use, which provides clarifications on the most frequently asked questions. In particular, the agency explained that to conduct testing using remote interaction tools, it is necessary to send a request to the authorized FSBI for remote testing with a justification for its necessity in such a manner. The Guide also provides detailed requirements for video files provided during remote testing, as well as a list of documents submitted together with the video files.

Roszdravnadzor Letter No. 02I-899/22 dated August 19, 2022, further clarifies that conducting tests using remote interaction tools is permitted upon a reasoned and confirmed impossibility of conducting such tests in FSBI laboratories (lack of technical feasibility; impossibility of supplying commercially unavailable samples).

Second, until February 1, 2024, for medicinal products released into civil circulation in 2022 and 2023, the submission of test protocols to the Roszdravnadzor AIS is not required. According to Roszdravnadzor Letter No. 02I-899/22 dated August 19, 2022, such an exemption is provided for all medicinal products, and not only those for which a shortage or the risk of its occurrence has been established.

Judicial Methods of Rights Protection in Case of Medicine Shortage

Although judicial practice on contentious issues of medicinal product circulation during a shortage has not yet developed, let us note the methods for protecting the rights of participants in this market.

Refusal to conduct expert examinations and (or) to issue authorization documents may be appealed in court. Challenging is carried out according to the rules of Chapter 24 of the APC RF, Challenging Non-normative Legal Acts, Decisions, and Actions (Inaction) of State Authorities. For the court to grant the application, it will be necessary to prove the following circumstances in combination:

non-compliance of the challenged decision, action (inaction) with the law or another legal act;
violation of the applicant's rights and legitimate interests in the sphere of business and other economic activity or the illegal imposition of any duties on them, creating other obstacles for the conduct of business and other economic activity.

State control over the circulation of medicinal products is carried out in the usual manner. In the event of bringing a medicinal product circulation entity to administrative liability, the consideration of cases on bringing to administrative liability and challenging decisions on bringing to administrative liability is carried out in accordance with Chapter 25 of the APC RF, Consideration of Cases on Administrative Offenses.

In conclusion, the measures adopted by the Russian Government were aimed at preventing a shortage of medicinal products and certainly helped improve the situation. However, it is worth noting that the problem cannot be completely solved without changing the production process and transferring manufacturing sites to the territory of the Russian Federation.

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References

[1] Approved by Order of the Ministry of Industry and Trade of Russia No. 2681 dated July 20, 2021.

[2] Order of the Ministry of Health of Russia No. 339n dated May 19, 2022, On the interdepartmental commission for determining a shortage or the risk of its occurrence...

[3] Decree of the Government of Russia No. 444 dated March 23, 2022, On Amending the Specific Features of State Regulation of Manufacturers' Maximum Selling Prices for Medicinal Products Included in the List of Vital and Essential Drugs.

[4] Letter of FAS Russia No. TN /114854/22 dated December 20, 2022.

[5] Guide on compliance with mandatory legislative requirements in the sphere of medicinal product circulation, concerning the specific features of release into civil circulation of medicinal products for medical use... approved by Roszdravnadzor on November 14, 2022.