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BRACE Law Firm presents its regular regulatory digest governing the Russian pharmaceutical and life sciences industry for April 2019.
The Russian Government has approved the Federal Scientific and Technical Program for the Development of Genetic Technologies for 2019–2027. The program primarily focuses on accelerating the advancement of genetic technologies, including genome editing techniques, as well as safeguarding the development of pharmaceuticals, immunobiological drugs, biomedical cell products, and medical devices to enhance the public healthcare infrastructure.
A critical compliance development introduces a new administrative offense penalizing the untimely submission of tracking data, or the submission of inaccurate data, into the mandatory pharmaceutical track-and-trace monitoring system for medical use.
While updated medical prescription forms for pharmaceuticals entered into force on April 7, 2019, the Ministry of Health of the Russian Federation has permitted healthcare facilities to utilize legacy forms until the end of the current calendar year.
Additionally, in April 2019, the Ministry of Health spearheaded numerous regulatory initiatives. The Ministry proposed essential frameworks, including the administrative procedure for submitting documentation and data on medicines introduced into commercial circulation within the Russian Federation, and operational guidelines for issuing compliance testing reports for newly manufactured non-immunobiological pharmaceuticals. We anticipate that these draft regulations, upon formal enactment, will provide clearer guidance on operational issues frequently encountered by pharmaceutical companies.
1. Legislative Acts, Administrative Regulations, and Legal Developments
1.1. New Administrative Sanctions Enacted for Untimely or Inaccurate Data Submissions to the Pharmaceutical Track-and-Trace System
Federal Law No. 58-FZ dated April 15, 2019, “On Amending the Code of the Russian Federation on Administrative Offenses”
This legislative act introduces Article 6.34 into the Code of Administrative Offenses of the Russian Federation (CoA O RF). The new provision imposes administrative fines on corporate officers ranging from 5,000 to 10,000 rubles, and on legal entities from 50,000 to 100,000 rubles for failing to timely submit tracking data or for reporting inaccurate information to the pharmaceutical track-and-trace monitoring system. Individual entrepreneurs bear the same liability thresholds as corporate entities for these compliance violations. Furthermore, the statute establishes that distributing pharmaceuticals without mandatory identification marks (QR codes) subjects corporate officers to fines of 5,000 to 10,000 rubles, and legal entities to 50,000 to 100,000 rubles. Alongside fiscal penalties, enforcement authorities may apply asset forfeiture and confiscate the non-compliant items from both corporate officers and legal entities.
The Federal Service for Surveillance in Healthcare (Roszdravnadzor) serves as the competent enforcement authority empowered to impose these sanctions. This Federal Law enters into force on January 1, 2020.
1.2. Launch of the Upgraded “Pharmacovigilance” Unified Database
Roszdravnadzor Letter No. 01I-841/19 dated March 29, 2019, and Information Letter No. 01I-945/19 dated April 8, 2019 (Supplementing Roszdravnadzor Letter No. 01I-841/19)
The administrative advisories announce that the updated database integrates the existing “Pharmacovigilance” and “MKILS” modules within Roszdravnadzor’s Automated Information System. The authority has designated a transitional period running until September 1, 2019, allowing market participants to concurrently use both the legacy and upgraded platforms. However, Roszdravnadzor strongly recommends that entities expedite their migration to the new system. User registration and re-registration protocols for the updated “Pharmacovigilance” resource are detailed under the “Automated System Pharmacovigilance” subsection within the “Services” portal on the official Roszdravnadzor website.
1.3. Enactment of Updated Medical Prescription Forms with Grace Period for Legacy Blanks
Letter of the Ministry of Health of the Russian Federation No. 25-4/I/2-2885 dated April 4, 2019, “On the New Prescription Forms for Pharmaceuticals, Approved by Order of the Ministry of Health of the Russian Federation No. 4n dated January 14, 2019”
The Ministry of Health notes that printing the updated prescription blanks requires a lead-time buffer. Consequently, healthcare providers may continue utilizing pre-printed legacy prescription forms through December 31, 2019.
1.4. Enhanced Anti-Terrorism Security Requirements for Medical Organizations and Healthcare Facilities
Decree of the Government of the Russian Federation No. 357 dated March 29, 2019, “On Amending the Anti-Terrorism Security Requirements for Facilities under or Associated with the Scope of the Ministry of Health of the Russian Federation”
Under the revised rules, medical organizations occupying portions of buildings and maintaining separate entrances must formalize anti-terrorism security compliance protocols. Furthermore, the regulation establishes a fourth risk category for healthcare facilities where the projected number of casualties is fewer than 50 individuals and the maximum estimated property damage is under 30 million rubles based on book value. For this specific category, the government prescribes a streamlined compliance framework. For instance, fourth-category medical centers do not need to implement strict access control points or formalize complex protocols to detect, prevent, and eliminate unauthorized entry.
1.5. Adoption of the Strategic Federal Program for Genetic Technology and Advanced Gene-Therapy Development
Decree No. 479 dated April 22, 2019, “On Approving the Federal Scientific and Technical Program for the Development of Genetic Technologies for 2019–2027”
The program aims to accelerate the growth of the genetic technology sector, prioritizing genome editing tools, the development of targeted therapeutics, immunobiological drugs, biomedical cell products, diagnostic medical devices, and environmental pathogen identification mechanisms for public health.
The decree highlights that various recombinant monoclonal and single-domain antibodies, therapeutic oncological vaccines, and gene-therapy products targeting cardiovascular and hereditary diseases are currently advancing through preclinical and clinical trial pipelines. A critical milestone under this initiative requires the completion of preclinical validation stages for at least 20 gene-therapy drugs and genetically modified cell line products.
1.6. Streamlining of Regulatory Compliance: Reductions in Mandatory Product Certification and Conformity Declaration Lists
Decree of the Government of the Russian Federation No. 489 dated April 24, 2019, “On Amending Decree of the Government of the Russian Federation No. 982 dated December 1, 2009”
This decree removes several sections from the mandatory product certification registry, including “Sera, immuno- and gamma-globulins, blood products, and other bio-substrates derived via genetic engineering for medical applications,” “Medical vaccines and toxoids,” and “Veterinary vaccines and toxoids.”
Furthermore, the government stripped several categories from the simplified conformity declaration framework. These include legally registered pharmaceuticals listed in the state register, whether combined or uncombined, packaged for retail or in metered doses for therapeutic or prophylactic purposes, as well as vitamins, coenzymes, enzymes, amino acids, endocrine organ preparations, bacteriophages, allergens, and other medical diagnostic reagents. This regulatory adjustment takes effect on November 29, 2019.
1.7. Ministry of Finance Clarifies Value Added Tax (VAT) Exemptions for Pharmaceutical Clinical Trials
Letter of the Ministry of Finance of the Russian Federation No. 03-07-11/25268 dated April 10, 2019
The Ministry issued a formal tax guidance addressing whether pharmaceutical clinical trials qualify as scientific research and development (R&D) activities eligible for VAT exemptions. Specifically, the Ministry of Finance clarifies that clinical trial services fall within the scope of eligible R&D work. Consequently, these operations qualify for the statutory VAT exemption pursuant to Subparagraph 16.1 of Paragraph 3 of Article 149 of the Tax Code of the Russian Federation.
2. Draft Legislative and Regulatory Initiatives
2.1. Proposed Revisions to Public Procurement Pricing: Incorporating Reference Prices to Calculate Initial Maximum Contract Prices
Draft Order of the Ministry of Health of the Russian Federation “On Amending the Procedure for Determining the Initial (Maximum) Contract Price, and the Price of a Contract Concluded with a Sole Supplier (Contractor, Performer), in Public Procurements of Pharmaceuticals for Medical Use, Approved by Order of the Ministry of Health of the Russian Federation No. 871n dated October 26, 2017”
The Ministry of Health proposes that state contracting authorities utilize standardized reference prices provided that the relevant pricing metrics are published within the Unified Information System (EIS). This adjustment facilitates the phased transition throughout 2019 to mandatory reference-price calculations in public health procurements.
2.2. Federal Subsidy Incentives Proposed to Offset Costs for Competitive Pharmaceutical Development and Manufacturing
Draft Decree of the Government of the Russian Federation “On Approving the Rules for Providing Federal Budget Subsidies to Russian Organizations to Compensate Portions of Expenditures Incurred During the Execution of Projects for the Development and Manufacturing of Competitive Pharmaceuticals”
The draft decree defines eligible competitive pharmaceutical development initiatives as time-bound, resource-limited, interconnected undertakings aimed at executing preclinical and clinical trials. Eligible projects also encompass the establishment, expansion, or modernization of high-tech production infrastructure—including active pharmaceutical ingredient (API) or antigen synthesis—as well as regulatory registration and commercial launch in domestic and foreign markets.
Subsidized expenditures incurred by project developers include: labor costs for personnel directly engaged in the project (reimbursable up to 70 percent); direct material expenses, including laboratory setup, R&D facility expansion, and the procurement of testing, measurement, and ancillary equipment (reimbursable up to 70 percent); acquisition costs for laboratory animals used in in vitro and in vivo preclinical validation (reimbursable up to 70 percent); and mandatory life and health insurance premiums for patients participating in clinical trials (reimbursable up to 70 percent). The government intends to allocate these federal subsidies via a competitive bidding process.
2.3. Standardization of Emergency Medical Kits for Adult Primary Healthcare Delivery
Draft Order of the Ministry of Health of the Russian Federation “On Approving the Standardization Requirements for Pharmaceuticals and Medical Devices in Emergency Medical Kits Utilized for the Provision of Primary Healthcare to Adults”
The draft directive establishes the baseline inventory of mandatory pharmaceuticals and medical devices designated for urgent care. The kit assembly requirements mandate the inclusion of at least one vasodilating nitrate agent and one non-steroidal anti-inflammatory drug (NSAID). Furthermore, operators must stock the emergency kits exclusively with pharmaceuticals registered within the Russian Federation, preserved in their original primary or secondary (retail) packaging, complete with the manufacturer’s instructions for use.
2.4. Public Comment Period Opens for Proposed Stringent Requirements on Alcohol-Containing Pharmaceutical Production
Draft Law “On Amending Certain Legislative Acts of the Russian Federation”
The Ministry of Industry and Trade initiated this legislative proposal. The bill introduces a strict prohibition barring licensed pharmacies, veterinary pharmacies, and individual entrepreneurs from compounding alcohol-containing pharmaceuticals using ethyl alcohol derived from food-grade raw materials or alcohol-based food products. Additionally, the draft legislation empowers regulators to ban the manufacture of pharmaceutical-grade ethyl alcohol (ethanol) via extraction or dilution from chemical raw materials.
Lawmakers justify these stringent restrictions by pointing to the critical need for heightened oversight regarding the commercial circulation and processing of ethanol and food-grade alcohol within the pharmaceutical and medical device manufacturing supply chains.
2.5. Proposed Regulatory Revisions to GMP Inspection Protocols for Foreign Pharmaceutical Manufacturers
Draft Decree of the Government of the Russian Federation “On Amending the Rules for Organizing and Conducting Inspections of Pharmaceutical Manufacturers for Compliance with Good Manufacturing Practice (GMP) Requirements, and for Issuing Certificates of Compliance”
Under the proposed framework, if inspectors identify non-compliance during an audit, the foreign manufacturer must formulate a comprehensive Corrective and Preventive Action (CAPA) plan and submit an implementation report within 30 calendar days from the issuance of the initial inspection report. The competent institution will review the submitted CAPA documentation within 30 calendar days, subsequently dispatching the final inspection report reflecting the CAPA review to both the regulatory authority and the foreign manufacturer.
Additionally, the draft shortens the administrative deadline for issuing a GMP Certificate of Compliance to 30 calendar days from the formal execution of the final inspection report.
The Ministry drafted this measure to harmonize domestic administrative regulations with EAEU legal standards, specifically Decision of the Council of the Eurasian Economic Commission No. 83 dated November 3, 2016, “On Approving the Rules for Conducting Pharmaceutical Inspections.”
2.6. New Fee Calculation Methodology and Price Caps Proposed for Immunobiological Drug Quality Testing
Draft Order of the Ministry of Health of the Russian Federation “On Approving the Methodology for Pricing Quality Testing Services and Compliance Certification for Batches (Lots) of Immunobiological Pharmaceuticals Relative to State Registration Parameters for Commercial Circulation Approval, and Establishing Maximum Price Caps Therefor”
The proposed financial model factors in cost metrics such as master protocol analysis, quality control expertise, consumable procurement, and labor expenditure. Specific formulas dictate the final itemized calculation. Crucially, the draft establishes an absolute price cap for these testing services at 467,629.50 rubles (excluding VAT).
2.7. Proposed Enforcement Protocol to Halt Commercial Circulation of Non-Reported and Unapproved Pharmaceuticals
Draft Decree of the Government of the Russian Federation “On Approving the Procedure for Issuing Decisions to Suspend the Commercial Circulation of Batches or Lots of Medical Pharmaceuticals Failing Data Submission Requirements, or Batches or Lots of Immunobiological Drugs Lacking Validation from the Federal Healthcare Oversight Authority”
The draft introduces the following enforcement rule: if regulators detect a pharmaceutical in commercial circulation for which the legally required documentation and data have not been submitted to Roszdravnadzor, or an immunobiological product lacking commercial entry validation, Roszdravnadzor shall issue a mandatory order halting its circulation. This suspension remains active until the manufacturer submits all required records or obtains the necessary regulatory authorization. To ensure transparency, Roszdravnadzor must publish all suspension orders on its official website, subject to statutory protections governing trade secrets and confidential commercial data.
2.8. New Validation Protocols for Launching Immunobiological Drugs into Commercial Circulation
Draft Decree of the Government of the Russian Federation “On Approving the Procedure for Issuing Commercial Circulation Authorizations for Batches or Lots of Immunobiological Pharmaceuticals, and the Procedure for Federal State Budgetary Institutions to Issue Registration Compliance Reports and the Associated Fees”
The proposed framework mandates comprehensive batch-by-batch oversight, requiring the evaluation of the manufacturer's master summary protocols and rigorous sample quality control testing. The testing scope depends on risk metrics identified by competent authorities during data analysis and expert assessments of the immunobiological samples.
To secure a compliance certificate verifying that a batch or lot aligns with its state registration specifications, applicants must submit the following items to the Ministry of Health or Roszdravnadzor: a manufacturer summary protocol detailing all production and quality control phases; a manufacturer certificate of quality compliance; a formal declaration from the manufacturer's Authorized Person confirming alignment with the registration dossier; and a certified copy of the product's regulatory specifications. Furthermore, applicants must provide requested pharmaceutical samples, reference standards, and validation materials. The laboratory testing of these samples must conclude within 60 business days from receipt.
2.9. Proposed Testing Protocols and Fee Frameworks for the Market Debut of Newly Manufactured Non-Immunobiological Pharmaceuticals
Draft Decree of the Government of the Russian Federation “On Approving the Procedure for Subordinate Federal State Budgetary Institutions to Issue Quality Testing Reports for the First Three Batches or Lots of Medical Pharmaceuticals Newly Manufactured in or Imported into the Russian Federation (Excluding Immunobiological Products), and Establishing Fee Schedules Therefor”
Under the draft regulation, applicants must supply the federal testing facility with the required product samples, reference standards, operational materials, a manufacturer-issued certificate of conformity for the specific batch, and a certified copy of the regulatory specifications. The framework also outlines a rigorous cost-accounting methodology to determine service fees. Specifically, the government will calculate the final testing and reporting fees based on the technical scope of the required verification work, aligned with economic models for material and labor expenditures.
2.10. Administrative Guidelines for Reporting Documentation and Data on Pharmaceuticals Entering the Russian Market
Draft Decree of the Government of the Russian Federation “On Approving the Procedure for Submitting Documentation and Data on Medical Pharmaceuticals Introduced into Commercial Circulation within the Russian Federation”
This regulatory proposal codifies and details the structural provisions of Federal Law No. 449-FZ dated November 28, 2018, “On Amending Certain Legislative Acts of the Russian Federation Regarding the Introduction of Medical Pharmaceuticals into Commercial Circulation.”
To comply with the primary reporting requirements, market participants must upload comprehensive product datasets into Roszdravnadzor's Automated Information System (AIS). This data suite includes: precise pharmaceutical specifications (trade name, INN, dosage form, manufacturer identity, active pharmaceutical ingredient details, batch number and volume, manufacturing facility name, and storage facility address); the manufacturer's official certificate of conformity; an endorsement from the manufacturer's Authorized Person certifying compliance with the state registration dossier; and a formal sample testing report.
2.11. State Duma Considers Raising Thresholds for Non-Competitive Urgent Medical Procurements via Medical Commissions
Lawmakers propose raising the maximum financial threshold for sole-source pharmaceutical procurement via medical commission mandates from 200,000 rubles to 1,000,000 rubles. Proponents justify this procurement expansion by highlighting that the existing 200,000-ruble cap frequently fails to cover the actual costs of advanced pharmaceuticals required to deliver high-quality urgent medical care. We expect legislative committees to draft formal statutory amendments reflecting this change shortly, allowing for a more detailed analysis of the bill.
3. Judicial and Enforcement Landscape
3.1. Criminal Antitrust Proceedings Initiated against Novosibirsk Pharmaceutical Cartel
The Federal Antimonopoly Service (FAS Russia) announced that criminal investigators have initiated proceedings following an administrative ruling against LLC "Company "FITO" and LLC "Terra" on March 7, 2018, in Case No. 33. The initial antitrust investigation uncovered an unlawful bid-rigging conspiracy concerning tenders organized by the Academician E.N. Meshalkin National Medical Research Center. This collusive agreement stifled market competition and engineered anticompetitive advantages for the co-conspirators. Based on the evidentiary record compiled during the FAS audit, law enforcement agencies initiated a criminal case under Article 178 of the Criminal Code of the Russian Federation (Restriction of Competition). The current scope of the criminal prosecution targets the organizations' collusive participation across 437 public auctions where they secured unlawful victories, yielding an aggregate illicit revenue of 576 million rubles.
