Moscow plans to further develop offset agreement mechanism

Offset agreements are a new effective mechanism for public procurement, in which the supplier agrees to establish or upgrade a production facility within the city, while the city authorities, in turn, agree to purchase the manufactured products. Moscow was the first subject of the Russian Federation that took advantage of such agreements.

Leonid Kostroma, Director of the City Investment Management Agency, said that a second competitive bidding will be announced in the coming months to conclude an offset agreement on establishing a production facility and supplying vital and essential drugs for the needs of Moscow. According to preliminary estimates, the annual procurement will include 47 products for a total amount of 8 billion rubles. This will allow Moscow to ensure the manufacturing of vital and essential drugs for a wide range of diseases affecting digestive, circulatory, cardiovascular, and respiratory systems. The mandatory amount of investments was tentatively increased up to 7 billion rubles and the period for localization of drugs was extended to 4 years (in order to establish a full-cycle production facility) due to a wide range of procurement.

For Moscow, the pharmaceuticals and medicine are priority areas of its import substitution program. The city of Moscow is one of the largest customers in the world. Annual procurement of pharmaceutical products for the city needs exceeds 60 billion rubles.