On August 31, 2020, Order No. 450n of the Ministry of Health of the Russian Federation, dated May 15, 2020, "On Approval of the Procedure for Determining the Initial (Maximum) Contract Price, the Price of a Contract Concluded with a Sole Source Supplier (Contractor, Performer), and the Initial Unit Price of Goods, Works, or Services for Public Procurement of Medical Devices" entered into force.

The Order sets forth the formula for calculating the Initial (Maximum) Contract Price (IMCP), including cases involving procurement from a sole source supplier (contractor, performer):

where:

n – the number of line items of the procured medical devices;

IUPi – the initial unit price of the i-th medical device line item, determined pursuant to this procedure (as applicable);

VAT – value-added tax (if applicable to the procured medical device);

Vi – the quantity (volume) of the i-th medical device line item.

As a general rule, the regulation establishes that contracting authorities must determine the initial unit price of a medical device as the weighted average value (or no higher than the weighted average price) of the prices collected by the contracting authority, excluding VAT, based on one or a combination of the following methods:

• The comparable market price method (market analysis);

• Information contained in the public procurement contract register confirming that the participant (excluding legal succession) has successfully executed three contracts within three years prior to the application submission date without the application of liquidated damages (fines, penalties). When applying the latter method, the contracting authority must consider at least three prices from contracts executed within the constituent entity of the Russian Federation where the contracting authority is located, provided these contracts were awarded through competitive procurement processes within the preceding three years. If no comparable contracts exist within the given constituent entity of the Russian Federation, the contracting authority shall review contracts executed in adjacent regions of the Russian Federation.

This regulatory legal act establishes distinct formulas for calculating the initial unit price of a medical device, depending on the requirements for technical maintenance and the necessity of procuring consumables for its operation.

Contracting authorities shall apply the comparable market price method to determine:

• The initial unit price of a medical device, consumable, and/or technical maintenance services during the medical device's warranty period;

• The IMCP for sole source procurement of technical rehabilitation means categorized as medical devices under the federal register of rehabilitation measures, technical rehabilitation means, and services provided to disabled individuals.

Contracting authorities may calculate the initial unit price of a state-regulated medical device included in the State Register of Maximum Manufacturer Selling Prices for Medical Devices using either the comparable market price method or the tariff method. However, the price specified in the procurement documentation must not exceed the price calculated via the tariff method.

In certain scenarios, sole source procurements permit the exclusive application of the market analysis method (for instance, procurements for mobilization preparation tasks in the Russian Federation, urgent medical care requirements, or specific procurements conducted by institutions of the federal penitentiary system, among others).

Notably, the new procedure for calculating the IMCP of medical devices mandates that to determine the cost of consumables and technical maintenance during the warranty period, the contracting authority must establish a warranty period in compliance with the operational documentation of the medical device, which must span at least 12 months. Should the operational documentation lack warranty period information, such period is deemed to be 24 months from the date of delivery to the contracting authority. Furthermore, the procedure clarifies the term "consumables," defining them as products and components that ensure the proper use and operation of the medical device, provided that relevant details appear in its operational documentation.

It is critical to note that the newly adopted IMCP calculation procedure applies exclusively to procurements for which notices were published after its effective date, i.e., from August 31, 2020.

Additionally, this regulation does not apply to:

• Procurements of single-use medical devices manufactured from polyvinyl chloride (PVC) plastics originating from foreign states, which are subject to public procurement admission restrictions under Russian Government Resolution No. 102 dated February 5, 2015;

• Procurements of medical devices classified as radio-electronic products, where admission restrictions are imposed on such foreign-sourced goods pursuant to Russian Government Resolution No. 878 dated July 10, 2019;

• Procurements executed within the framework of the State Defense Order.