On September 28, 2020, new rules for determining the maximum size of wholesale and retail markups to the actual selling prices of manufacturers of medicines included in the vital and essential drugs list came into force.
Decree of the Government of Russia of September 24, 2020 No. 1541 “On Amendments to Certain Acts of the Government of Russia” amended the Decree of the Government No. 865 of October 29, 2010 “On State Regulation of Prices for Medicines Included in the List of Vital and essential drugs”.
The new rules in many respects repeat the provisions of the procedure for setting the maximum markups to the selling prices of vital and essential drugs for manufacturers, which were previously used by both regional authorities and market participants (distributors, pharmacies and medical organizations).
The executive authorities of the constituent entities of the Russian Federation make decisions on establishing and (or) changing the maximum size of wholesale markups and the maximum size of retail mark-ups to actual selling prices (excluding VAT) set by manufacturers for medicines included in the VED list, after agreeing on draft decisions with FAS Russia.
The maximum size of wholesale markups and the maximum size of retail markups to the actual selling prices of manufacturers, expressed as a percentage and differentiated depending on the cost of drugs, are established for wholesale organizations, pharmacy organizations, individual entrepreneurs licensed to carry out pharmaceutical activities, medical organizations holding licenses for the implementation of pharmaceutical activities, and their separate divisions located in rural settlements in which there are no pharmacy organizations.
Regional authorities set the maximum size of the wholesale markups and the maximum size of the retail markups in accordance with the methodology approved by the FAS Russia:
- reimbursement of economically justified costs associated with the purchase, storage and sale of drugs;
- accounting for the amount of profit required to provide organizations with funds for servicing attracted capital and financing other justified expenses;
- accounting in the structure of surcharges of all taxes and other mandatory payments.
The procedure for considering and approving markups includes the following stages:
1. The executive authority of the constituent entity of the Russian Federation shall send the draft decision to the FAS Russia with calculations and an explanatory note.
2. FAS Russia, within 30 working days from the date of registration of the draft decision, sends to the executive authority of the constituent entity of the Russian Federation its decision to approve the draft decision or refuse to approve it.
3. If it is necessary to clarify and (or) supplement the information contained in the documents, the executive authority of the constituent entity of the Russian Federation shall submit, at the request of FAS Russia, the corresponding documented information.
The term for the submission of the requested information by the executive authority of a constituent entity of the Russian Federation may not exceed 15 working days from the date of receipt of the request from the Federal Antimonopoly Service.
If the requested documentary information is not received from the executive authority of the constituent entity of the Russian Federation within the specified timeframe, the FAS Russia within 5 working days from the date of the expiration of the general deadline makes a decision to refuse to approve the draft decision.
The grounds for refusal to approve the draft decision are:
- inconsistency between calculations of the maximum markups to the actual selling prices of manufacturers and the calculations;
- submission of false information to the FAS Russia;
- absence in the submitted documents of the information required in accordance with the methodology;
- submission of an incomplete set of documents;
- failure to receive the requested documentary information from the executive authority of the constituent entity of the Russian Federation on time.
4. Further, the executive body of the constituent entity of the Russian Federation makes a decision within a period not exceeding 10 working days from the date of the decision by FAS Russia to approve the draft decision, submit within 3 days a copy of the decision to the FAS Russia, and at least 10 working days before the day the entry into force of the decision posts information about the decision taken on its official website.
Distributors have the right to sell medicinal products included in the VED list at prices the level of which (excluding VAT) should not exceed the amount of the manufacturer's actual selling price, not exceeding the registered or re-registered manufacturer's maximum selling price (as of the date the medicinal product is sold by the manufacturer), and the size of the wholesale markup not exceeding the size of the maximum wholesale markup established in the constituent entity of the Russian Federation. At the same time, distributors take VAT into account in the selling price of the medicinal product.
The total amount of wholesale markups to be applied by all wholesalers involved in the sale of a medicinal product, calculated on the basis of the manufacturer's actual selling price, should not exceed the corresponding limit size of the wholesale markup established by the executive authority of the constituent entity of Russia to whose territory the medicinal product is supplied.
Wholesale trade organizations that have retail business units can formulate retail prices for medicinal products using simultaneously wholesale and retail markups to the manufacturer's actual selling price (excluding VAT), the total amount of which should not exceed the maximum wholesale and retail markups, respectively, established in subject of the Russia, subject to separate accounting of wholesale and retail trade.
Wholesale trade organizations that sell medicinal products to consumers under a commission agreement (committees) on behalf of retail trade organizations (commission agents) can form the selling price for a drug using both wholesale and retail markups to the manufacturer's actual selling price, the total amount of which should not exceed the maximum the size of the wholesale and retail markups, respectively, established in the subject of the Russian Federation.
Pharmacy organizations, individual entrepreneurs licensed for pharmaceutical activities, medical organizations licensed for pharmaceutical activities, and their separate subdivisions (outpatient clinics, paramedic station and paramedic-obstetric station, centers of general medical (family) practice) located in rural settlements, in which there are no pharmacy organizations, carry out the sale of medicinal products at prices, the level of which (excluding value added tax) should not exceed the amount of the actual selling price of the manufacturer, not exceeding the registered or re-registered maximum selling price of the manufacturer (as of the date of sale of the medicinal product by the manufacturer), and the amount of the wholesale markup and (or) the amount of the retail markup not exceeding, respectively, the size of the maximum wholesale markup and the amount of the maximum retail markup established in the constituent entity of the Russian Federation. Pharmacy organizations, individual entrepreneurs and medical organizations take into account value added tax in the selling price of a medicinal product in the manner prescribed by the legislation of Russia.
The size of the retail mark-up, calculated on the basis of the actual selling price of the manufacturer, to be applied by pharmacy organizations, individual entrepreneurs and medical organizations selling medicinal products, should not exceed the corresponding maximum retail mark-up set by the executive authority of this constituent entity of Russia.
When wholesale organizations, pharmacy organizations, individual entrepreneurs and medical organizations form selling prices for medicines using the maximum wholesale markups and (or) the maximum retail markups, such selling prices are rounded off according to the mathematical rules of rounding to hundredths of a ruble. When calculating the allowances applied by such organizations and individual entrepreneurs, an error is allowed that does not exceed the rounding amount.
The actual manufacturer's selling price for a medicinal product of an EAEU member state is understood as the price (excluding VAT) indicated by the manufacturer in the accompanying documentation for the product and not exceeding the registered or re-registered manufacturer's maximum selling price for the medicinal product as of the date of transfer to the Russian buyer (his authorized person). In this case, the manufacturer's actual selling price indicated in foreign currency is recalculated into rubles at the exchange rate of the Central Bank of the Russian Federation on the date of the transfer of the medicinal product by the manufacturer of a member state of the Eurasian Economic Union to the Russian buyer (person authorized by him) under a transfer deed or other similar document.
The actual selling price of a foreign manufacturer (with the exception of manufacturers of the EAEU member states) for medicinal products is understood as the price (excluding value added tax) indicated by the foreign manufacturer in the accompanying documentation for the goods, on the basis of which the customs declaration is drawn up, taking into account the costs associated with customs clearance of cargo (payment of customs duties and fees for customs clearance), not exceeding the registered or re-registered maximum selling price of the manufacturer for this medicinal product on the date of release of the goods specified in the customs declaration. At the same time, the manufacturer's actual selling price, declared in foreign currency, is converted into rubles at the exchange rate of the Central Bank of Russia on the date of the customs declaration.
The sale of medicinal products by wholesale organizations, pharmacy organizations, individual entrepreneurs and medical organizations is carried out if there is a protocol for coordinating the prices for the supply of medicinal products compiled in the form according to the appendix, with the exception of medicinal products that were not included in the list of vital and essential medicinal products at the date of their purchase the specified organizations and individual entrepreneurs.
The protocol for negotiating prices for the supply of medicinal products can be created in the form of an electronic document signed by an enhanced qualified electronic signature of the authorized persons of the supplier and the buyer.
October 7, 2020
Lawyers of the practice “Healthcare and Pharmaceuticals” of
BRACE Law Firm ©