Specific features of pharmaceutical pricing in the Russian Federation

The issue of regulation of prices for medicines is one of the most relevant in the context of social policy of the state. Setting prices for medicines requires balancing the interests of the population and pharmaceutical companies aimed at increasing the cost of products. That is why the state often provides for measures to regulate pricing, involving the establishment of marginal selling prices and mark-ups for certain drugs. 

Thus, in the Russian Federation, regulation of prices for medicines is carried out in accordance with the provisions of Federal Law No. 61-FZ dated 12.04.2010 "On Circulation of Medicines". To implement state regulation, the List of Vital and Essential Medicines for Medical Use (approved by the Order of the Government of the Russian Federation No. 2406-r dated 12.10.2019) has been approved. Inclusion of drugs in the List of Vital and Essential Drugs for Medical Use (hereinafter - the VED List) is based on the analysis of clinical efficacy, possible consequences of use, as well as the assessment of economic factors. Examples of drugs included in the VED List are: omeprazole, Drotaverine, retinol, loperamide, ascorbic acid and others. 

In relation to the medicines included in the List of VEDs, a methodology for calculating manufacturers' maximum selling prices has been approved, and the amounts of wholesale and retail mark-ups to actual selling prices have been established. Manufacturers' maximum selling prices are subject to registration in the State Register of manufacturers' maximum selling prices for medicinal products included in the List of Vital and Essential Medicinal Products for Medical Use. The rules for maintaining the said register are regulated by Resolution of the Government of the Russian Federation No. 865 dated 29.10.2010 "On State Regulation of Prices for Medicinal Products Included in the List of Vital and Essential Medicinal Products". 

At the same time, it should be noted that the pricing of drugs not included in the Vital and Essential Drug List is carried out by pharmacies independently on the basis of costs associated with the storage, purchase and sale of drugs. The state does not set maximum selling prices and mark-ups for this category of medicines. 

At the same time, the COVID-19 pandemic served as a catalyst for changes in the pricing system for medicines not included in the List of Vital and Essential Drugs. Thus, Resolution of the Government of the Russian Federation No. 1310 dated 29.08.2020 "On Approval of the Rules for Formation of the List of Medicinal Products Not Included in the List of Vital and Essential Medicinal Products, in respect of which the maximum selling prices of manufacturers, maximum wholesale mark-ups and maximum retail mark-ups to the actual selling prices of manufacturers are established" approved special rules according to which the state authorities of the constituent entities of the Russian Federation shall set the price of medicinal products not included in the List of Vital and Essential Medicinal Products. This state regulation implies the establishment of maximum selling prices, as well as wholesale and retail mark-ups in respect of the drug. At the same time, the maximum wholesale mark-up and the maximum retail mark-up to the manufacturer's actual selling price for a medicinal product are established for each constituent entity of the Russian Federation. A decision on state regulation of the price of a drug not included in the List of VEDs may be made if the Federal Service for Healthcare Supervision reveals an increase in retail prices for the drug by 30 per cent or more.

Additionally, it should be emphasized that Article 14.4.2 of the Code of Administrative Offences of the Russian Federation No. 195-FZ dated 30.12.2001 provides for administrative liability for the sale of medicinal products in violation of the requirements of the legislation on the circulation of medicines in terms of setting maximum wholesale or retail mark-ups to the actual selling prices set by manufacturers of medicinal products for the said medicinal products. The amount of an administrative fine for a pharmaceutical organization may be set in the amount from 250,000 to 500,000 thousand roubles.

It follows from the above that at the moment with respect to the drugs included in the List of Vital and Essential Medicines for Medical Use in the Russian Federation there is a pricing system that involves the establishment of maximum selling prices, as well as wholesale and retail mark-ups. The maximum selling prices are subject to registration in the relevant Register. These methods of state regulation have a positive effect on the final prices of drugs included in the List of Vital and Essential Drugs. Pricing for medicines not included in the VED List is set by pharmacy organizations depending on their own costs. At the same time, the current legislation provides for the possibility of regulating the pricing of medicinal products not included in the List of VEDs. If the Federal Service for Healthcare Supervision reveals an increase in retail prices for a drug by 30 per cent or more, the drug will be subject to state price regulation measures. This measure prevents unjustified price increases for many imported medicines necessary to maintain the health of the country's citizens. Violation of the current legislation on pricing of medicines may result in the imposition of an administrative fine.

 

Authors: Anna Kritsyna, Maria Klimenkova.