The lowdown on the situation regarding the product liability in Russian Pharma. Prepared in association with Lidings, a leading global law firm, this is an extract from The Pharma Legal Handbook: Russia, available to purchase here for GBP 99.
1. What types of liability are recognized in your jurisdiction?
There are several types of liability recognized by the Russian Federation, namely:
- disciplinary liability (for disciplinary offenses);
- civil liability (for civil offenses);
- administrative liability (for administrative offenses);
- criminal liability (for criminal offenses),
depending on the type of the committed violations. Either this or that type of liability is applicable.
2. How do these types of liabilities apply to the manufacturers of medicines and devices?
The Constitution of the Russian Federation guarantees everyone the right to life, health protection, and medical care. General rules on liability for causing harm are stipulated in the Civil Code of the Russian Federation. Law on Circulation of Drugs contains separate chapter 15 called “Liability for the violation of the legislation of the Russian Federation in the circulation of drugs and compensation for harm caused to the health of citizens as a result of the use of drugs”.
The Civil Code of the Russian Federation regulates only civil liability, while the Law on Circulation of Drugs in Article 68 refers to other types of liability, i.e.
- disciplinary (e.g. for committing a disciplinary offense, that is, failure to perform or improper performance by an employee due to his fault of the duties assigned to him);
- administrative (e.g. for turnover of falsified, counterfeit, poor-quality and unregistered medicines and medical devices);
- criminal (e.g. for the illegal manufacture of medicines and medical devices).
Therefore, disciplinary, administrative, criminal and civil liability can be applied to manufacturers of medicines and devices.
Administrative and criminal liability are specified by the Criminal and Code of Administrative Offenses of the Russian Federation, respectively.
3. Does potential liability extend to the manufacturer only or could claims extend to corporate executives, employees, and representatives?
Potential liability can be extended to corporate executives, employees, and representatives as well. For example, Article 6.33 of the Code of Administrative Offenses of the Russian Federation establishes liability for executives for selling defective drugs that constitute from RUB 100 000 up to RUB 600 000.
4. How can a liability claim be brought?
Individuals are entitled to bring a claim before a court of general jurisdiction. The limitation period constitutes 3 years.
A state commercial (arbitrazh) court can hold manufacturers administratively liable if RZN decides that the manufacturer produces medicine with poor quality.
The Investigation Committee of the Russian Federation investigates crimes involving the circulation of falsified and counterfeit medicines.
In April 2019, Minzdrav launched the section on Information related to state registration of medicines on its website. This section discloses information on recently filed applications for registration of drugs currently pending before Minzdrav.
Access to this information is particularly significant in harsh competitive conditions on the market and a significant increase of patent disputes in Russia between originators and generics.
Russian law does not recognize registration of generic drugs during the patent validity term as an act of infringement (Para. 2, Art. 1359 of the Civil Code of the Russian Federation).
However, disclosure of information on filed applications will allow patent holders to keep control of any threat of infringement coming from generic registrations. Under the current jurisprudence, the “threat of infringement” takes place when a generic drug obtains a market authorization in Russia over 3 years before the patent expiry (case No. А41-85807/2016).
Moreover, any company seeking to register a new drug (original or generic) shall indicate all patents and trademarks relevant for this new drug. Another obligation is to warrant that registration of this new drug would not infringe any third party’s intellectual rights, under the risk of penalties.
5. What defenses are available?
The consumers have the defenses stipulated in the Civil Code of the Russian Federation and the Law “On Consumer Protection”.
In accordance with the current legislation any injured and aggrieved person is entitled to claim compensation for harm both either from the manufacturer or from the seller (Art. 1095, 1096 of the Civil Code of the Russian Federation, Art. 14, 18, 19 of the Law “On Consumer Protection”). Accordingly, the consumer has the right to choose between contractual and tort claims (Ruling of the Russian Supreme Court dd 22.09.2015 No. 66-КГ 15-10). The harm is subject to compensation in full.
In addition to harm, the consumer has the opportunity to claim compensation for moral damage, the “consumer fine” is calculated as fifty percent of the sum recovered, “consumer forfeit”, the compensation of price difference (the difference in the price established by the sale contract and the price of the goods existing on the market).