BRACE Law Firm presents its regular regulatory digest of the Russian pharmaceutical industry covering October 2019. The month of October 2019 witnessed the adoption of a substantial number of legal acts impacting the pharmaceutical market, high legislative activity, and noteworthy judicial practice:

• The Board of the Eurasian Economic Commission approved the passport of the Classifier of Medicinal Product Components, alongside the information classification and coding methodology and the Classifier management procedure. The Board also issued guidance regarding the classification of a drug derived from cell-free aqueous substrates of microorganism metabolic products.

• The Government of the Russian Federation approved the 2020 List of Vital and Essential Drugs (VED), the list of medicinal products prescribed by decision of medical commission boards, the high-cost drug list, and the minimum assortment of medicinal products required for the provision of medical care.

• Roszdravnadzor issued recommendations for participants in the pilot project for track-and-trace identification marking and monitoring the turnover of specific types of medicinal products for medical use. The agency also outlined the most frequent compliance violations occurring when transmitting mandatory data to Roszdravnadzor.

• The Ministry of Health put forward legislative initiatives, including the establishment of a Metrological Service under the ministry and the introduction of a maximum allowable cap on citizen expenditures for vital and essential drugs. Furthermore, the Ministry finalized the draft rules for the mandatory 2019–2020 reregistration of maximum manufacturer selling prices for VED-listed drugs (previously registered under varying methodologies), as well as rules requiring marketing authorization holders to reduce previously registered prices for VED-listed medicinal products.

• The Intellectual Property Rights Court upheld the compulsory license granted to LLC Nativa for the drug Sunitinib-nativ.

• An commercial arbitration court ruled that the slogan "Cheap Pharmacy. We Will Sell Cheaper If You Name a Competitor's Price" on a pharmacy storefront constitutes advertising under applicable law.

This digest provides a detailed review of the above-mentioned regulatory updates, statutory enactments, and legislative initiatives.

1. Statutes, Administrative Regulations, and Legal News

1.1. Eurasian Economic Commission Approves Classifier for Medicinal Product Components and Issues Guidance on EAEU HS Coding for Microorganism Metabolite-Based Drugs

Decision of the Board of the Eurasian Economic Commission No. 171 dated October 8, 2019 "On the Classifier of Medicinal Product Components"

Decision of the Board of the Eurasian Economic Commission No. 173 dated October 8, 2019 "On the Classification of a Drug Based on Cell-Free Aqueous Substrates of Microorganism Metabolic Products in Accordance with the Unified Commodity Nomenclature of Foreign Economic Activity of the Eurasian Economic Union"

The Board of the Eurasian Economic Commission approved the passport of the Classifier of Medicinal Product Components, including the data classification and coding methodology and the Classifier maintenance rules.

The classification system categorizes information on the types of medicinal product packaging components using a hierarchical method.

The primary level of the hierarchy identifies the category of medicinal product packaging components, distinguishing administration devices, closure systems, unpacking devices, and other components.

The secondary level of the hierarchy designates the specific type of component, determined in accordance with the Nomenclature of Dosage Forms approved by Decision of the Board of the Eurasian Economic Commission No. 172 dated December 11, 2015.

The classification applies to data regarding the types of components included in consumer packaging, which companies must specify in marketing authorization applications for medicinal products.

An additional Decision of the Board of the Eurasian Economic Commission established that liquid oral solutions containing cell-free aqueous substrates of microorganism metabolic products as active substances, alongside excipients, intended to restore and regulate normal intestinal microflora and boost immune protection, fall under heading 2106 of the Unified Commodity Nomenclature of Foreign Economic Activity of the EAEU, pursuant to General Interpretative Rule 1.

Importers and exporters must accurately declare the EAEU HS code when executing customs clearance within the Eurasian Economic Union. Proper coding directly determines the correct assessment and payment of customs duties.

1.2. Russian Government Approves Revised 2020 Drug Lists, Modifying the Vital and Essential Drugs (VED) List and Minimum Pharmacy Stock Requirements

Government of the Russian Federation Decree No. 2406-r dated October 12, 2019 "On Approving the List of Vital and Essential Drugs for 2020, as well as the Lists of Medicinal Products for Medical Use and the Minimum Assortment of Medicinal Products Required for the Provision of Medical Care"

Government Decree No. 2406-r brings into force:

• The 2020 List of Vital and Essential Drugs (VED) for medical use;

• The list of medicinal products for medical use, including drugs prescribed via formal medical commission board determinations;

• The high-cost drug list designated for patients diagnosed with hemophilia, cystic fibrosis, pituitary dwarfism, Gaucher disease, malignant neoplasms of lymphoid, hematopoietic and related tissues, multiple sclerosis, hemolytic uremic syndrome, juvenile arthritis with systemic onset, mucopolysaccharidosis types I, II, and VI, and for post-transplant organ or tissue recipients;

• The minimum mandatory stock assortment of medicinal products required for healthcare delivery.

Notably, the Government expanded the VED list by 24 new entries while removing lornoxicam.

The High-Cost Drug List now incorporates specific medicinal products indicated for the treatment of hemolytic uremic syndrome, juvenile arthritis with systemic onset, and mucopolysaccharidosis types I, II, and VI, following the integration of these nosologies into the regulatory scope in 2019.

Furthermore, the Ministry added 23 new line items to the list of prescription drugs requiring formal approval from institutional medical commission boards.

1.3. Roszdravnadzor Standardizes Guidelines for Voluntarily Registered Participants in the Drug Track-and-Trace Serialization Pilot Program

Recommendations for Participants in the Pilot Program for Identification Marking and Monitoring the Turnover of Specific Types of Medicinal Products for Medical Use (together with "Characteristics of Identification Marks, Structure and Format Requirements, Including the Protocol for Requesting and Deploying Serialization Codes and Forming Aggregated Codes," and "Requirements for Data Transmitted from Federal Executive Agency Information Systems to the Monitoring System and Data Exported from the Monitoring System"), approved by Roszdravnadzor on October 2, 2019

This document provides that commercial entities within the pharmaceutical supply chain join the serialization and track-and-trace pilot program through voluntary registration in the central monitoring system.

The central monitoring system interchanges data with federal executive information architectures, using established electronic public service infrastructure. The platform interfaces with the following registries: the unified register of drug manufacturing licenses; the unified register of pharmaceutical activity licenses (including regional authorizations); the unified state health information system; the Unified State Register of Legal Entities; the Unified State Register of Individual Entrepreneurs; the state register of accredited branches and representative offices of foreign legal entities; Roszdravnadzor’s Automated Information System (AIS); the Unified Automated Information System of the Customs Authorities; and internal ERP systems of pharmaceutical supply chain participants.

Applicants must submit participation requests for the pilot program electronically via the central monitoring interface.

The regulatory framework dictates reporting protocols and data schedules. For domestic manufacturing, the packaging operator must upload serialization records within 5 business days from secondary (or primary, if applicable) packaging execution, prior to any downstream logistical routing.

When transferring products between wholesalers or distributors, either the transferring entity or the receiving counterparty may perform the mandatory data upload into the monitoring database.

1.4. Russian Government Allocates Federal Budget Subsidies to FSUE Moscow Endocrine Plant for the Importation and Distribution of Unregistered Psychotropic Pediatric Drugs

Government of the Russian Federation Resolution No. 1354 dated October 21, 2019 "On Approving the Rules for Providing Subsidies from the Federal Budget in 2019 to Reimburse the Costs of the Federal State Unitary Enterprise 'Moscow Endocrine Plant' Related to the Purchase, Importation, and Delivery of Psychotropic Medicinal Products Unregistered in the Russian Federation for Pediatric Care"

The federal government grants this subsidy to reimburse procurement, import, and logistical expenses for unregistered psychotropic substances required for pediatric medical interventions under the "Healthcare Development" state program.

To qualify for the subsidy as of the first day of the month preceding the formal execution of the grant agreement with the Ministry of Industry and Trade, the recipient must satisfy the following conditions:

• The enterprise carries no outstanding tax liabilities, unpaid duties, insurance contributions, fines, or interest under Russian tax legislation;

• The enterprise has no overdue debts or repayment defaults concerning previous federal subsidies or budget investments;

• The entity is not undergoing corporate reorganization, liquidation, or bankruptcy proceedings;

• The recipient does not receive concurrent funding from the federal budget for identical operational objectives under alternative statutory instruments.

The enterprise must submit a formal application along with detailed cost projections to the Ministry of Industry and Trade by December 6. The Ministry verifies the accuracy of the financial data and issues an approval or denial within 5 calendar days.

The regulation instructed the Ministry of Health to compile corporate demand profiles for unregistered substances by October 25, 2019. The Ministry of Industry and Trade committed to finalizing the drug distribution matrix by November 1.

1.5. Government Formulates Strategic Blueprint for Primary Healthcare Overhaul, Launching Regional Project Review Protocols

Government of the Russian Federation Resolution No. 1304 dated October 9, 2019 "On Approving the Principles for Modernizing Primary Healthcare in the Russian Federation and the Rules for Conducting Expert Reviews of Draft Regional Primary Healthcare Modernization Programs, Monitoring, and Controlling the Implementation of Regional Primary Healthcare Modernization Programs"

The resolution details planned infrastructure initiatives, including targeted drug provision programs to prevent cardiovascular complications in high-risk outpatients recovering from acute strokes, myocardial infarctions, or vascular surgeries. It also mandates equipping medical organizations with vehicles to transport biospecimens and deliver medications to remote regions.

The Government directed the Ministry of Health to draft a federal subsidy framework by November 25 to fund these regional outpatient cardiovascular drug supply programs.

The interagency working group, directed by the Ministry of Health, must evaluate regional project plans and technical findings within 5 business days from receiving individual member reports.

1.6. Ministry of Health Directs Emergency Medical Services and All-Russian Disaster Medicine Service Resource Stockpiling Infrastructure

Ministry of Health of the Russian Federation Order No. 827 dated October 2, 2019 "On Approving the Departmental Target Program 'Improvement of Emergency, Including Specialized Emergency, Medical Care and the Activities of the All-Russian Disaster Medicine Service'"

The program outlines targeted measures to upgrade the All-Russian Disaster Medicine Service, mandating the annual creation and replenishment of federal emergency medical reserves, including critical pharmaceuticals and medical devices, through December 31, 2024.

The program also prioritizes replacing emergency vehicle fleets and constructing stationary emergency units. Additionally, the framework allocates resources to provide emergency medical treatment to Ukrainian citizens and stateless individuals arriving in Russia under emergency mass migration conditions.

1.7. Federal Legislation Expands Scope of Medical Products Subject to Preferential 10% Import VAT Rate

Federal Law No. 325-FZ dated September 29, 2019 "On Amending Parts One and Two of the Tax Code of the Russian Federation"

The amendment adds "compounds of artificial radioactive isotopes used for the preparation of medicinal products (HS code 2844 40 300 0*)" to Section 1 of the preferential 10% import VAT list established under Government Resolution No. 688 dated September 15, 2008. The legislation also extends these preferential tax categories to specified medical devices. The statutory amendments took effect on October 27, 2019.

1.8. Ministry of Finance Amends Procurement Preferences for EAEU-Sourced Pharmaceutical Contract Subcontracting Services

Ministry of Finance of the Russian Federation Order No. 165n dated October 14, 2019 "On Amending the Appendix to Order of the Ministry of Finance of the Russian Federation No. 126n dated June 4, 2018 'On the Conditions for the Admission of Goods Originating from a Foreign State or Group of Foreign States for the Purposes of Procuring Goods to Meet State and Municipal Needs'"

Under federal procurement rules, public tender boards and electronic platform operators must apply a 15% price preference coefficient to bids offering goods listed in Order No. 126n that originate exclusively from EAEU member states. The final contract mirrors the winning bidder's original price proposal. This update modifies the product classification directory by removing specific subcontracting codes from category 21 ("Medicinal Products and Materials Used for Medical Purposes"), explicitly excluding code 21.10.9 ("Individual services for the manufacture of basic pharmaceutical products performed by a subcontractor") and code 21.20.9 ("Individual services for the manufacture of medicinal products and materials used for medical purposes performed by a subcontractor").

1.9. Presidential Decree Ratifies National Artificial Intelligence Development Strategy Through 2030, Impacting Healthcare Diagnostics

Decree of the President of the Russian Federation No. 490 dated October 10, 2019 "On the Development of Artificial Intelligence in the Russian Federation"

The Strategy targets industrial and administrative AI integration, focusing on predictive equipment maintenance, supply chain management optimization, automated logistics, corporate risk mitigation, and algorithmic personnel scheduling. In Life Sciences and healthcare, the mandate prioritizes automated surgical interventions and specialized clinical software algorithms.

The presidential initiative anticipates that deploying AI within the healthcare sector will improve patient outcomes through advanced imaging diagnostics, automated disease progression modeling, algorithmic drug dosage calculation, pandemic threat minimization, and precise robotic surgery.

1.10. Ministry of Health Rescinds Roszdravnadzor Administrative Regulations on Importation and Exportation Certificates for Narcotic and Psychotropic Drugs

Ministry of Health of the Russian Federation Order No. 300n dated May 15, 2019 "On Recognizing as Invalid Order of the Ministry of Health of the Russian Federation No. 421n dated July 7, 2015 'On Approving the Administrative Regulations of the Federal Service for Surveillance in Healthcare for the Provision of the State Service for Issuing Certificates for the Right to Import (Export) Narcotic Drugs, Psychotropic Substances, and Their Precursors, If They Are Medicinal Products' and Clause 2 of the Changes Made to Certain Administrative Regulations of the Federal Service for Surveillance in Healthcare for the Provision of State Services in the Field of Turnover of Narcotic Drugs, Psychotropic Substances, and Their Precursors, Potent Substances That Are Not Precursors of Narcotic Drugs and Psychotropic Substances, Approved by Order of the Ministry of Health of the Russian Federation No. 584n dated September 1, 2017"

This administrative order, taking effect on October 26, 2019, formally rescinds both the primary administrative regulations governing Roszdravnadzor's issuance of import/export certificates for controlled medicinal substances and all subsequent amendments linked to those specific regulatory protocols.

1.11. Ministry of Health Issues Formal Compliance Guidance for Parents Retaining Unregistered Controlled Psychotropic Substances for Pediatric Care

The guidance memorandum is published on the official website of the Ministry of Health of the Russian Federation

The compliance manual contains two sections: the first targets guardians whose children possess a valid federal medical board protocol for unregistered psychotropic substances (such as diazepam, clobazam, midazolam, or phenobarbital); the second targets guardians of children where registered epilepsy treatments have proven ineffective or child-specific formulations (elixirs, rectal solutions, or oromucosal solutions) are required, but formal board determinations remain pending.

The guidelines stipulate that when transporting these drugs, individuals must carry either the official medical commission determination, the federal consultation board protocol, or a formal drug receipt. Pharmacies dispense these medications in three-month supplies; consequently, guardians must contact the attending physician 2.5 months into the cycle to arrange renewal. If a child lacks a valid board protocol, the guardian must secure the documentation from a localized pediatric neurology or palliative care institution. If clinically warranted, the local practitioner can refer the patient to a specialized inpatient clinic for diagnostic evaluations, therapeutic validation, and precise dosage titration of the unregistered psychotropic drug.

1.12. Roszdravnadzor Outlines Common Data Filing Violations Committed by Market Entities within the Electronic Reporting System

Letter of Roszdravnadzor No. 01И-2359/19 dated October 1, 2019 "On Data Mandatory for Submission to Roszdravnadzor"

The Federal Service for Surveillance in Healthcare completed an audit of 2019 electronic filings regarding commercial drug releases submitted by market participants via Roszdravnadzor's Automated Information System.

The regulatory audit revealed frequent compliance violations in reporting workflows, specifically:

• Total failure to report commercial market release data for specific drug batches;

• Submitting required commercial drug entry records outside of statutory deadlines;

• Mismatches between submitted batch profiles and the State Register of Medicinal Products regarding specific dosage forms, concentrations, or packaging volumes;

• Inconsistencies between commercial launch data and figures stated in formal declarations or certificates of conformity;

• Omitting the issuance dates or specific registration numbers of conformity declarations and certificates;

• Providing inaccurate or invalid facility addresses for warehouses storing drug consignments.

2. Draft Regulations and Legislative Initiatives

2.1. Ministry of Health Proposes Structural Revisions to Professional Accreditation Schedules for Medical and Pharmaceutical Practitioners

Draft Order of the Ministry of Health of the Russian Federation "On Amending the Deadlines and Stages of Accreditation of Specialists, as well as the Categories of Persons Having a Medical, Pharmaceutical, or Other Education and Subject to Specialist Accreditation, Approved by Order of the Ministry of Health of the Russian Federation No. 1043n dated December 22, 2017"

The draft regulation establishes that starting January 1, 2020, the following practitioner cohorts must undergo formal professional competency verification:

• Physicians graduating from state-accredited higher medical education programs (including bachelor's and residency levels) within the "Healthcare and Medical Sciences" framework after January 1, 2020;

• Clinical and medical specialists completing advanced professional retraining curricula aligned with national qualification standards and state vocational or higher educational guidelines after January 1, 2020.

2.2. Ministry of Industry and Trade Seeks Expansion of Legal Definitions Governing Crypto-Verification Devices in Drug Monitoring Systems

Draft Resolution of the Government of the Russian Federation "On Amending Certain Resolutions of the Government of the Russian Federation in the Field of Marking Goods and Medicinal Products Subject to Mandatory Identification Marking"

The Ministry proposes expanding the definition of an "emission recording device," revising paragraph 25 of Clause 2 of the core Drug Monitoring System Regulations (Resolution No. 1556 dated December 14, 2018) to read as follows: "'emission recording device' means a technical component for information exchange designed to obtain serialization marks and transmit data to the tracking system, functioning as a cryptographic code validation tool certified by the Federal Security Service of the Russian Federation for information security compliance, or incorporating an integrated code verification module that holds valid FSB cryptographic validation clearance."

2.3. Ministry of Health Proposes Adjustments to Certification Rules and Evaluation Schedules for Drug Assessment Experts

Draft Order of the Ministry of Health of the Russian Federation "On Amending the Procedure for Determining the Level of Professional Training of Experts of a Federal State Budgetary Institution for Conducting Expert Reviews of Medicinal Products for Medical Use and Granting Certification to Conduct Expert Reviews of Medicinal Products for Medical Use, Approved by Order of the Ministry of Health and Social Development of the Russian Federation No. 755n dated August 26, 2010"

Under the draft text, clinical and pharmaceutical experts seeking official certification no longer need to submit a specialist certificate to the Review Board. Furthermore, the draft lowers the frequency of evaluation board sessions, requiring them to convene at least once a year based on application volume, replacing the current mandate of holding review sessions at least once every three months.

2.4. Ministry of Health Aligns Regulations to Eliminate Outdated Drug Lists Following Universal Social Tax Deduction Expansion

Draft Resolution of the Government of the Russian Federation "On Recognizing as Invalid the List of Medicinal Products Prescribed by an Attending Physician to a Taxpayer and Purchased at Their Own Expense, the Cost of Which Is Taken into Account When Determining the Amount of a Social Tax Deduction, Approved by Government Resolution No. 201 dated March 19, 2001"

This administrative draft responds directly to Section 2 of Article 1 of Federal Law No. 147-FZ dated June 17, 2019. The underlying statutory amendment removed the phrase "in accordance with the list of medicinal products approved by the Government of the Russian Federation" from the Tax Code. Consequently, individuals can claim income tax deductions for any medical practitioner-prescribed drug purchased using personal funds, rendering the old restricted drug list legally obsolete.

2.5. Draft Resolution Outlines Formation of a Dedicated Metrological Service for Pharmacopoeia Quality Control Under the Ministry of Health

Draft Order of the Ministry of Health of the Russian Federation "On the Metrological Service of the Ministry of Health of the Russian Federation in the Field of Turnover of Medicinal Products for Medical Use"

According to the explanatory note, the Ministry developed this draft order to satisfy Article 22 of Federal Law No. 102-FZ dated June 26, 2008 ("On Ensuring the Uniformity of Measurements"), which directs federal executive agencies to construct internal metrological departments to oversee measurement standardization within their jurisdiction.

The draft text establishes a specialized metrological division tasked with validating measurements for national pharmacopoeia reference standards and fabricating control samples for drug quality evaluation. The proposal delegates day-to-day operations and execution to the Scientific Center for Expert Evaluation of Medicinal Products under the Ministry of Health.

2.6. Legislative Proposal Seeks Amendment to Healthcare Protection Act to Introduce 10% Household Income Cap on Essential Drug Expenses

Draft Federal Law "On Amending the Federal Law 'On the Basics of Health Protection of Citizens in the Russian Federation'"

The bill establishes a state subsidy mechanism for individuals whose personal expenditures on VED-listed essential drugs exceed 10% of their total verified income derived from employment, commercial enterprise, or alternative sources.

For citizens earning below the official subsistence minimum, the bill introduces a correction coefficient that systematically scales down the maximum allowable cost threshold relative to their income level, providing additional financial protections for lower-income demographics.

The proposal routes subsidies to recipients prior to their scheduled medical prescription dates. If an individual purchases VED items out-of-pocket, the state pays out a reimbursement matching the statutory cost allowance.

2.7. State Duma Committee Proposes Special Medical Commission Waivers for importing Unregistered Narcotic and Psychotropic Medications

United Russia Proposes to Allow the Import of Psychotropic Drugs via Medical Commission Approval. Interfax Information Group, October 1, 2019

Lawmakers are drafting amendments to the federal drug circulation statute to authorize custom import exemptions for unregistered narcotic and psychotropic treatments when a patient demonstrates documented intolerance to registered alternatives. The process requires a formal medical board ruling confirming specific patient contraindications. Crucially, the State Duma previously rejected a related bill on October 24, 2019, which sought to establish complete customs duty and tax exemptions for clinical shipments imported on compassionate use grounds.

2.8. Ministry of Health Reopens Regulatory Consultation on Amending Professional Licensing Standards for Medical Cosmetology Clinics

Draft Order of the Ministry of Health of the Russian Federation "On Amending the Procedure for the Provision of Medical Care to the Population in the Profile of 'Cosmetology', Approved by Order of the Ministry of Health and Social Development of the Russian Federation No. 381n dated April 18, 2012"

At the International Forum of Dermatovenerologists and Cosmetologists, officials announced that the Ministry of Health is returning to the proposed amendment of regulatory protocols governing aesthetic medicine. The draft framework defines cosmetology services as an integrated set of prophylactic, diagnostic, and therapeutic interventions aimed at preserving or restoring the skin, subcutaneous fat, and superficial muscular layers. The rules require practicing cosmetologists to comply with the high-level professional criteria established in Ministry Order No. 707n dated October 8, 2015, which dictates postgraduate medical qualifications for health practitioners.

2.9. State Duma Passes Bill Refining Drug Interchangeability Assessment Rules and Safety Update Schedules in First Reading

Draft Federal Law "On Amending the Federal Law 'On the Circulation of Medicines' and the Federal Law 'On Amending the Federal Law 'On the Circulation of Medicines' in Part of Improving the Procedure for Determining the Interchangeability of Medicinal Products for Medical Use"

The bill establishes specific statutory mechanisms for determining the generic interchangeability of unique drug classes, while explicitly exempting homeopathic remedies and herbal medicines from interchangeability testing. It also mandates the creation and continuous online public update of a master interchangeability directory.

The proposed legislation grants applicants the right to submit supplementary data or scientific documentation if an official expert evaluation board determines that the initial dossier is insufficient to support an interchangeability finding.

The statutory framework establishes a strict 40-business-day deadline for marketing authorization holders to submit mandatory product labeling and package insert revisions following Roszdravnadzor's publication of new, verified adverse reaction data or safety warnings regarding a drug or its therapeutic equivalents.

Additionally, the bill empowers federal regulatory agencies to suspend a drug's marketing authorization if the manufacturer fails to submit label updates within the 40-day window or withholds files requested for interchangeability reviews.

2.10. Parliamentary Health Committee Recommends Staged Track-and-Trace Enforcement Beginning with High-Cost Nosologies

The Government Is Recommended to Consider a Phased Introduction of Drug Marking. Based on Data from the Official Website of the Association of Pharmacy Institutions "Soyuz Pharma"

During a session on October 15, 2019, the State Duma Committee on Health Protection formally advised the Government to adopt a phased track-and-trace timeline. The committee recommended launching serialization requirements exclusively for drugs distributed under the state-funded program for high-cost nosologies (including hemophilia, cystic fibrosis, multiple sclerosis, and post-transplant care).

Lawmakers initiated this recommendation because extensive sector feedback indicated that despite previous deadline extensions, numerous supply chain operators and pharmacies remain unequipped to meet full mandatory track-and-trace serialization rules by the 2020 deadline.

2.11. Draft Amendment Integrating Track-and-Trace Reporting into Pharmacy and Wholesaler Corporate Licensing Protocols

Draft Resolution of the Government of the Russian Federation "On Amending Paragraph 5 of the Regulations on Licensing of Pharmaceutical Activities"

Pursuant to Part 7 of Article 67 of Federal Law No. 61-FZ dated April 12, 2010 ("On the Circulation of Medicines"), all corporate entities and individual entrepreneurs engaged in the manufacturing, storage, import, dispensing, sale, transfer, clinical deployment, or disposal of medicinal products must log tracking data in the central monitoring system in accordance with Resolution No. 1556 rules.

The explanatory note highlights that the draft resolution explicitly integrates track-and-trace compliance into Paragraph 5 of the core pharmaceutical licensing framework. Consequently, wholesalers, retail pharmacy organizations, licensed individual entrepreneurs, and medical institutions will face direct licensing sanctions if they fail to transmit required transaction logs to the national drug monitoring platform.

2.12. Ministry of Health Proposes Documentation Protocols for the Accidental Spoilage and Destruction of Controlled Substances

Draft Resolution of the Government of the Russian Federation "On Amending the Rules for Keeping and Storing Special Registers of Operations Related to the Turnover of Narcotic Drugs and Psychotropic Substances"

The draft text updates the compliance rules governing controlled substance registries, mandating that if accidental spoilage or destruction occurs during clinical or pharmaceutical operations, operators must execute a formal loss certificate within one business day. The resolution establishes the template for this document under Appendix No. 3 of the regulations.

Because the regulations permit both physical paper logbooks and secure electronic ledgers, operators can compile the loss certificate in hard copy or digitally, anchoring the record directly to the master transaction register.

Furthermore, the ministry introduced a standardized form specifically designed to document the accidental spoilage of psychotropic chemical compounds.

2.13. Prime Minister Instructs Ministry of Health to Revise Maximum Initial Price Formula to Remediate Failed Procurement Tenders

The official website of the Government of the Russian Federation published the results of the 33rd meeting of the Foreign Investment Advisory Council in Russia, dated October 21, 2019

The executive branch directed the Ministry of Health to amend Order No. 871n, which governs the calculation of maximum initial contract prices for public drug tenders and single-source procurements. The planned revision aims to resolve the systemic issue of failed state auctions caused by commercially unviable initial pricing constraints.

2.14. Ministry of Health Finalizes Mandatory 2019–2020 VED Price Recalculation Rules, Enforcing Decreases Linked to Foreign Market Values

Draft Resolution of the Government of the Russian Federation

"On Amending Government Resolution No. 865 dated October 29, 2010 'On State Regulation of Prices for Medicinal Products Included in the List of Vital and Essential Drugs' and Government Resolution No. 979 dated September 15, 2015 'On Amending Government Resolution No. 865 and Approving the Calculation Methodology for Maximum Manufacturer Selling Prices for VED-Listed Drugs During State Registration and Reregistration'"

The draft resolution establishes the operational rules for the mandatory 2019–2020 reregistration of maximum manufacturer selling prices for all VED-listed drugs, aligning them under a singular, standardized methodology. It also outlines the regulatory obligations of marketing authorization holders to lower registered prices for these essential medicines.

Additionally, the draft updates past administrative decrees (Resolution No. 865 and Resolution No. 979) to ensure full harmony with Federal Law No. 134-FZ price control adjustments and the corresponding mathematical calculation formulas used by international manufacturers.

Crucially, the Ministry revised the price reregistration section of Resolution No. 865. The updated rules allow domestic manufacturers to preserve their historical price caps for immunobiologicals, narcotics, psychotropic drugs, and any low-cost items priced under 100 rubles, provided those values do not exceed the statutory limits set by Part 4 of Article 61 of Federal Law No. 61-FZ. Conversely, reference drug prices registered prior to Federal Law No. 134-FZ must undergo mandatory reregistration in 2019–2020 via proactive applications from marketing authorization holders. Consequently, filing for price reregistration is an absolute statutory requirement.

This exemption remains contingent on compliance with Part 4 of Article 61 of Federal Law No. 61-FZ. Under that provision, a marketing authorization holder must immediately petition the federal regulator to reduce their registered price cap if the drug's foreign currency price drops in its country of origin or in any international jurisdiction where the manufacturer maintains parallel product registrations.

From our legal perspective, the draft text leaves several ambiguities unresolved, particularly regarding the specific historical window used to evaluate foreign currency price drops and the precise conversion metrics for comparing parallel international price points.

2.15. State Duma Reassesses E-Commerce Pharmacy Bill, Evaluating Wholesaler Integration into Remote Retail Supply Chains

Draft Federal Law "On Amending Certain Legislative Acts of the Russian Federation regarding the Retail Sale of Medicinal Products by Remote Method"

During parliamentary floor debates on the draft bill, committee members introduced proposals to grant wholesale distribution companies direct access to the online digital medication market.

As currently drafted, the bill enforces a strict prohibition against the remote digital retail sale of prescription-only medications. However, it permits regional executive agencies to include specified narcotic and psychotropic drugs in localized lists, authorizing their sale via licensed rural medical clinics and their remote detached operational units.

2.16. Ministry of Health Sets Strategic Timeline for National Outpatient Prescription Drug Reimbursement Transition

Information provided according to data from the TASS State Information Agency

The Ministry aims to transition from the current restricted preferential drug category system to a comprehensive, universal outpatient prescription reimbursement model within the next two to three years.

3. Judicial and Enforcement Practice

3.1. Appellate Court Affirms Legality of Medical License Mandates for Specialized Public Procurement Disinfection Tenders

Ruling of the Seventeenth坚Arbitration Appellate Court dated October 29, 2019, in Case No. A71-3698/2019

A regional anti-monopoly authority previously sustained a bidder's challenge against a public purchaser. The regulator ordered the state enterprise ("Pharmacies of Udmurtia") to expunge tender specifications requiring bidders to possess a valid medical license specialized in "disinfectology" as a baseline qualification rule.

The state enterprise successfully appealed the regulatory order in court. "Pharmacies of Udmurtia" demonstrated that it carries out licensed pharmaceutical operations across all locations listed in the pest control tender. The plaintiff argued that the specification did not require bidders to hold site-specific licensing for each pharmacy branch, but rather established a baseline professional standard in disinfectology to ensure the bidder could perform safe, high-quality pest control operations within pharmacy facilities.

Reversing the anti-monopoly authority's decision, the court ruled that implementing sanitary-epidemiological and preventative measures forms an essential part of public health protection. This scope encompasses administrative, engineering, clinical, and sanitary steps specifically designed to neutralize the transmission of infectious diseases and prevent mass toxic exposures.

3.2. Intellectual Property Rights Court Upholds Nativa's Compulsory Patent License for Anticancer Drug Sunitinib

Ruling of the Intellectual Property Rights Court dated October 29, 2019, No. С01-906/2019 in Case No. A40-166505/2017

The court noted that pursuant to Paragraph 2 of Article 1362 of the Civil Code of the Russian Federation, if a patent holder cannot exploit an invention without infringing an existing primary patent whose holder has refused a license under standard commercial terms, the secondary patent holder may sue to secure a compulsory, non-exclusive license to operate within Russia.

The statement of claim must clearly detail the proposed licensing terms, including operational scope, payment schedules, and royalty rates. If the dependent patent holder demonstrates that their chemical formulation represents a significant technical advancement and yields substantial economic benefits over the primary patent, the court shall grant a compulsory non-exclusive license.

Given these statutory parameters, the court of first instance and the appellate court possessed solid legal grounds to adopt the conclusions of the court-appointed chemical and medical experts.

Although the primary patent holders argued that the secondary developer omitted comprehensive clinical trials validating the therapeutic superiority of the dependent patent, they failed to present any empirical evidence refuting the certified experimental records and the documented polymorphic traits of sunitinib.

3.3. Commercial Court Fines Pharmacy Enterprise 500,000 Rubles for Selling Unregistered Decertified Vitamin Lots

Decision of the Arbitration Court of the Rostov Region dated October 14, 2019, in Case No. A53-33096/2019

The case records show that the regional drug enforcement division of the Ministry of Internal Affairs transferred operational logs to Roszdravnadzor's territorial branch. The files documented the retail sale on August 6, 2019, of one pack of "Vitrum Junior" chewable multivitamins (30-tablet packs, manufactured by Unipharm Inc., USA) at a pharmacy branch in Rostov-on-Don. Because the state had cancelled the item's marketing authorization, the sale triggered administrative liability under Part 2 of Article 6.33 of the Code of Administrative Offenses.

The court rejected the pharmacy's defense that Roszdravnadzor had not prominent published the specific recall alert and that upstream wholesale suppliers failed to flag the decertification. The court ruled that because the Ministry of Health updated the public online State Register of Medicinal Products on June 25, 2019, to record the formal cancellation decree (No. 20-3/1082), the pharmacy bore an independent corporate compliance duty to review the registry.

3.4. Commercial Court Draws Legal Boundary Between Informational Storefront Signage and Unregulated Promotional Advertising

Decision of the Arbitration Court of the Krasnodar Krai dated October 24, 2019, in Case No. A32-37090/2018

The court determined that the text "Cheap Pharmacy. We Will Sell Cheaper If You Name a Competitor's Price" surpasses standard institutional identification. The phrasing explicitly targets consumer behavior by promoting discounted price match structures. Consequently, the court classified the signage as commercial advertising subject to Part 1 of Article 3 of the Federal Law "On Advertising."

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