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Mandatory Medicine Insurance

The Russian government intends to begin a major reform in healthcare by 2010. Prime Minister Vladimir Putin plans to bolster both public health and the health of the national pharmaceuticals industry with the introduction of mandatory medicine insurance to pay for prescription medicines as part of mandatory medical insurance. The prime minister announced the reforms yesterday in Kursk, along with Minister of Health and Social Development Tatyana Golikova and Minister of Industry and Reade Viktor Khristenko.

The inclusion of medicine in mandatory medical coverage means that everyone in the system will be guaranteed partially-paid or free prescription medicine at a predetermined price from a predetermined list. Now only recipients of social benefits have the opportunity. Medicine in hospitals is formally free for patients. This year, a number of medicines for serious illnesses were withdrawn from those provided as a benefit and were paid for first by Roszdrav (the Federal Agency for Health and Social Development) and, since last month, by the Ministry of Health and Social Development.

Only the general principles of the future insurance plan were discussed in Kursk. The announcement was well received by the pharmaceuticals industry. “In the event the concept is accepted and implemented, it will permit Russia to join the number of the civilized countries that not only declare it, but invest in a healthy nation,” said Alexander Itin, executive director of the Valenta holding, formerly known as National Medicines. Alexander Kuzin, general director of the DSM Group, an industry market research group, warns, however, that “Implementation of the plan will cost from 50 billion to 80 billion rubles per year. One way or another, that money will come from additional taxes… We estimate the level of additional payment as an increase in the single social tax of 1-2 percent.”

In Kursk, Golikova stated that the insurance reform is tied to the development of the Russian pharmaceuticals industry. Khristenko promised the prime minister to create a development plan for the industry by September. It was clear that the reform includes buying medicines from Russian suppliers. The average per capita spending on medicines in Russia last year was $80, of which 75 percent was obtained commercially. Foreign suppliers accounted for 78 percent of the Russian pharmaceuticals market by cost. The Russian pharmaceuticals market is expected to be worth $13.5 billion this year.


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