Russian government's latest moves on drug labeling and pricing policy

Print 28 February 2018
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The Russian government plans to start investigation of the activities of some leading domestic and global drugmakers operating in the local market, due to their activities for the prevention of introducing a system of drug labeling in the country, according to recent statements by Russia’s Deputy Prime Minister Igor Shuvalov, reports The Pharma Letter’s Russia correspondent.

According to recent statements of Mr Shuvalov, the introduction of the drug labeling system is opposed by some powerful industry’s lobbyists and producers.

Mr Shuvalov comments: “Lobbyists say labeling will lead to the leaching of a cheap segment of the market from domestic pharmacies and lesser access of consumers to drugs. In fact, this is untrue, as drugs will become more affordable. They will be absolutely verified, there will be no contraband, and there will not be any counterfeit."

However, Mr Shuvalov also added that certain producers are trying to discredit the new system and to force the government to finally refuse from its introduction and implementation.

In this regard, the government may start its own investigation of such activities of producers and even impose fines against them.

In 2018, based on the results of the pilot experiment, a drug labeling system was introduced in Russian pharmacies. Initially, it is planned to label the most expensive drugs and gradually move to cheaper ones. The cheapest drugs, priced up to 50 roubles ($0.89) per package, will be the last to receive the label - in early 2019.

Regulators to tighten control on pricing policy of global drugmakers

Meantime, the Russian Federal Antimonopoly Service (FAS) plans to tighten the control for pricing policy of global drugmakers operating in Russia, with the aim to prevent an uncontrolled increase of prices for their range in the local pharmaceutical market, according to press-service of FAS.

Several days ago, the agency had issued an instruction to AstraZeneca to reduce prices for five of its drugs available in the Russian pharmaceutical market, and there is a possibility the same order could be issued to some other global drugmakers, operating in Russia.

According to the FAS, in recent years the number of cases which involve the setting of excessive prices by foreign drugmakers operating in Russia has significantly increased. The amount of such extra charges is usually high, being varied in the range of 75%-150%.

If the companies that receive such orders do not reduce prices, the FAS may cancel the registration of prices for them.
AstraZeneca in 2017 signed a special investment contract with the Russian government for the modernization of its plant in the Kaluga region and committed to invest more than 1 billion roubles in it. The company says the FAS approach may endanger the long-term strategy of AstraZeneca’s development in Russia. The same position is shared by other global pharmaceutical producers which said tightening the state policy in the Russian pharmaceutical market may reduce its investment attractiveness.

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