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New Russian Public Health Laws and the Pharmaceutical and Medical Market


Nina Belozertseva
Head ofápractice, Healthcare & Pharmaceuticals
Goltsblat BLP

New Russian public health laws that will begin coming intoáeffect onáJan. 1, 2012, reflect anáunprecedented surge ináinterest, following theáfirst proposals toáamend Russia's core legislation onápublic health protection, just over aáyear ago. Industry players andáthe public need toábe aware ofáwhat theáchanged laws mean.

Theánew federal law onáthe fundamentals ofápublic health protection ináthe Russian Federation passed its third reading ináthe State Duma onáNov. 1, 2011, after strong opposition fromásome sections ofáthe medical community, professional associations, andápharmaceutical andámedical equipment companies had delayed theásecond andáthird readings. TheáHealth andáSocial Development Ministry's public discussion saw more than 2,000 comments.

Theápassing ináSeptember 2010 ofásimilar fundamental legislationá— onádrug circulation ináthe Russian Federationá— which included some incorrect wording andáwas seen as negative byásome industry players, saw anáactive industry response toáthe proposals forápublic health legislation. Extensive discussions across theáindustry, atáa range ofálevels, ensued about changes toáthe existing public health laws, which were nearly 20 years old. Although theámajor provisions come intoáeffect as ofáthis coming January, some other provisions will not become effective until 2017.

Pharmaceutical andámedical equipment company visits toámedical practitioners andápharmacists

Aákey issue debated against theábackdrop ofáthe new legislation was theárelationship between medical practitioners andápharmacists, andácompany representatives. Across theáindustry it is well accepted that medical practitioners andápharmacists are keys toásuccessful marketing forápharmaceutical companies, while aámajor source ofáinformation about theáeffectiveness ofánew medicines andátreatments, as well as new medical equipment andáits use, comes through visits byácompany representatives toámedical practitioners andápharmacists. Communication between them is vital.

Aámajor area ofácontention was aáproposal byáthe Federal Anti-Monopoly Service, backed byáthe Health andáSocial Development Ministry andáthe prime minister, toárestrict communications between medical practitioners andápharmacists, andápharmaceutical andámedical equipment companies.

TheáFederal Anti-Monopoly Service proposed banning visits byámedical company representatives toádoctors during working hours andáprohibiting medical practitioners fromáreceiving gifts, cash, payment foráentertainment, leisure, travel toáholiday resorts, andásamples ofámedicines andáproducts forádelivery toápatients fromácompanies. There were also proposals toában medical practitioner participation atáconferences andáseminars, with similar proposals floated forápharmacy employees.

Theáindustry appealed toálegislators arguing theáneed foráa balanced approach, resulting ináa range ofáamendment options being considered. Byáthe time ofáthe second reading, theáinitial provisions had been watered down considerably, while atáthe same time being made more legally correct, with theáenvisaged sanctions foráviolation ofáremaining prohibitions being considerably reduced. Theáend result is that scope forávisits toámedical practitioners andápharmacists not only remains ináplace, but has been legalized.

Under theánew law, companies may visit during clinical trials, andáin order toáimprove theáprofessional skills ofáthe practitioners, as well as toácollect information onáside effects relating toátreatments andámedicines. Similarly theánew law retains scope forápractitioners toáattend seminars, conferences andáscientific events, even where these are financed byáa single company. Atáthe same time, other key prohibitions appearing ináthe first bill, including onácash payments, gifts andápayment foráentertainment, leisure andáholiday travel, remain ináeffect.

Most large industry players have long had clear policies andáprocedures regulating ethical interaction between company employees andámedical practitioners or pharmaceutical workers. These policies will need toábe aligned with theánew law, with theáprohibition onáprovision ofádrug samples toámedical practitioners, forápatients, likely toámean significant revision ofáexisting policies.

It should be noted that theácurrent working ofáthe existing bill is toásome degree ináconflict with theáfederal law onádrug circulation, which established anáextensive list ofápersons wholesale companies have theáright toáprovide samples to, including treatment facilities, but not including medical practitioners. Despite this, inápractice, there are situations when practitioners receive samples that are subsequently provided toápatients.

Similarly, companies passing samples toápharmacists forádistribution toáthe general public is also expressly prohibited byálaw, with medical andápharmaceutical workers now liable foráviolations under theálegislation.

Payment foráscientific and/or educational studies

Under theábill, medical practitioners are allowed toáenter intoácontracts forácarrying out educational andáscientific activities.

Despite this, we think that lecturing, seminar participation andásome other types ofáactivity currently undertaken byámedical workers under theáaegis ofá"educational activities" may no longer continue toádo so if they are outside educational institutions andáhave no identified educational criteria toámeet. Similarly we think that aátechnical assignment should be aákey part ofáany agreement with medical workers foráthe performance ofáscientific work, andáthat this should reflect theádefinition ofáscientific activities under theánew lawá— which presumes creative activity directed toward obtaining new knowledge about nature, man andásociety, or application ofáscientific knowledge across anáidentified range ofáfields.

Liability foráprohibition breaches established byáthe bill

Under theábill, medical andápharmaceutical employees will be liable foráviolation ofáthe above prohibition ináaccordance with theálegislation.

Ofáparticular interest is theáintroduction ofáa new definitioná— "conflict ofáinterest"á— referring toásituations where medical or pharmaceutical workers take aápersonal interest, while performing their professional duties, ináobtaining, personally or through aácompany representative, aáfinancial or other benefit that affects, or might affect, due performance ofáprofessional obligations, resulting ináa conflict between theápersonal interest ofáthe medical or pharmaceutical employee andáthe patient's interests.

If aáconflict ofáinterest arises, theámedical or pharmaceutical worker is obliged toáinform, ináwriting, theáhead ofáthe medical institution or pharmacy atáwhich they work, andáthe head ofáthe institution is toánotify theáauthorized executive federal body ináwriting toáthis effect within seven days.

Toásettle theáconflict ofáinterest, aáspecial committee will be set up. I believe that such general wordings do nothing toáensure theáproper working ofáthe law ináthis respect. It is quite clear that medical practitioners andápharmacists will be reluctant toáinform institution heads ofáa conflict ofáinterest, andáinstitution heads similarly reluctant toáinform theáauthorized body, as byádoing so they would confirm that theálaw has been breached. It is, therefore, as yet impossible toádetermine how severe theáliability forábreaking theárelevant regulations will be.

Other noteworthy amendments include theáfollowing:

Procedures andástandards forámedical care

Under theálaw, Russian Federation medical care is provided according toáprocedures andástandards forárendering medical care. Yet, theálawá— compared with theáfirst version ofáthe billá— recognizes only theámedical care procedures as binding, while application ofámedical care standards is no longer binding.

Ináour opinion, it will be interesting forámarket players toáknow that theámedical care standard is developed according toáthe classification ofámedical servicesá— including average frequency provision figures andáthe application rate, including forádrugs registered ináthe Russian Federation (with indication ofáthe average dosage)á— according toáinstructions foráusing medication, andáthe therapeutic category, under theáAnatomical Therapeutic Chemical Classification System recommended byáthe World Health Organization.

Even though there is no indication that theástandards are binding, prescription andáuse ofádrugs, medical products andáspecialized nutritional care products not covered byáthe relevant medical care standard is allowed, subject toácertain medical conditions (life-saving reasons andáother nonstandard events) byádecision ofáa health commission. According toáthe bill, aáhealth commission consists ofámedical practitioners andáis run byáthe head ofáthe medical institution or deputies.

This means that foráa medical practitioner toáprescribe aádrug or medical product not included ináthe medical care standard under aáspecific prognosis, they will need toáobtain aádecision fromáa health commission run byáthe head ofáthe medical institution or deputies. I believe that, inápractice, this situation will cause many problems, especially forámedical practitioners andápatients. It is unclear how theápractitioner will obtain aádecision fromáa health commission when such aáneed arises, andáhow much time this will require.

Orphan diseases

Theánew law marks theáfirst time that theáconcept ofá"orphan" diseases has appeared ináRussian legislation. Under theáproposed bill, rare (orphan) diseases are those with anáincidence ofáfewer than 10 cases per 100,000 ofáthe population. Foráthe purposes ofásupplying drugs toápeople suffering fromárare diseases, aáRegister is maintained ofápeople suffering fromálife-threatening, acute andáchronic, progressive, andárare (orphan) diseases that shorten life expectancy or cause disability.

It is interesting that theáprevious version ofáthe bill specified theábudget level andáthe source fromáwhich patients with rare (orphan) diseases would be supplied with treatments. Theálatest version provides no such details.

Medical products, substitutability

Theánew law also marks theáfirst time that theáconcept ofá"medical products" has been introduced intoáthe legislation. It refers toáany instrument, apparatus, device, equipment, material or other products used forámedical purposes, separately or jointly, including other accessories andáspecial software, required foráuse ofáthese products.

Since most medical products byáfar are purchased with government funds, theákey concept inápublic procurement is that ofásubstitutability ofámedical products. Theálaw has defined this inárelation toámedical products. Medical products may be recognized as mutual substitutes, if they are comparable ináfunction, quality andátechnical characteristics andácan replace one another.

It should be noted that, ináour opinion, theádefinition ofámedical products andáthe specifics ofátheir circulation hardly fits theálaw onáthe fundamentals ofápublic health protection. Even so, legislators decided not toápass aáseparate law regulating circulation ofámedical products similar toátreatments subject toáa separate law. Time will tell whether this was justified.


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