Regulatory, Pricing and Reimbursement Overview
An intro to the legal situation for regulatory, pricing and reimbursement in Russia. 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 USD 99.
1. What are the regulatory authorities with jurisdiction over drugs, biologicals, and medical devices in your country?
The authorities responsible for applying and enforcing the regulatory framework shall be:
- in relation to drugs and biologicals – the Ministry of Healthcare of the Russian Federation (the “Minzdrav”) and the Federal Service for Surveillance in Healthcare (the “RZN”);
- in relation to medical devices – RZN.
2. What is the regulatory framework for the authorization, pricing, and reimbursement of drugs, biologicals, and medical devices?
The regulatory framework for authorization, pricing and reimbursement of drugs and biologicals includes Federal Law dd 21.11.2011 No. 323-FZ “On fundamental healthcare principles in the Russian Federation“ (the “Law on fundamental healthcare principles”), Federal Law dd 12.04.2010 No. 61-FZ “On Circulation of Drugs” (the “Law on Circulation of Drugs”), the provisions of which are supplemented with the regulations, adopted by the Government of the Russian Federation and Minzdrav.
The are no specific requirements for pricing of drugs in private sector, except common antitrust regulations that shall be considered. As well there is no reimbursement in private sector. As for public sector, please, refer to Question 12.
The regulatory framework for authorization, pricing and reimbursement of medical devices includes Law on fundamental healthcare principles, the provisions of which are supplemented with the regulations, adopted by the Government of the Russian Federation and Minzdrav.
Cl. 2 Art. 38 of Law on fundamental healthcare principles provides for the segregation of medical devices for classes, depending on the degree of the potential risk of use of medical devices, and on types, depending on the nomenclature classification of medical devices (i.e. the purpose of their use), that is set forth by Decree of Minzdrav dd 06.06.2012 No. 4n. The class of the medical device affects its registration, i.e. procedure for obtaining marketing authorization (lease, see Question 4 below), and post-registration control.
The classes of the medical devices include the following:
- class 1 – medical devices with low degree of risk (for instance, medical gauze);
- class 2b – medical devices with increased degree of risk (for instance, solution for lens);
- class 2a – medical devices with average degree of risk (for instance, X-ray apparatus);
- class 3 – medical devices with high degree of risk (for instance, coronary stent).
The are no specific requirements for pricing of medical devices in private sector, except common antitrust regulations that shall be considered. As well there is no reimbursement in private sector. As for public sector, please, refer to Question 12.
3. What are the steps to obtaining authorization to develop, test, and market a product?
The manufacturers or their authorized representatives in Russia shall obtain a marketing authorization from the Minzdrav for drugs and biologicals and from RZN – for medical devices. The registration procedures are set forth with Law on Circulation of Drugs and supplementary regulations of Minzdrav in respect of drugs, and by Law on fundamental healthcare principles and supplementary regulations of the Government of the Russian Federation and Minzdrav – in respect of medical devices.
The steps to obtain marketing authorization and approval timeframes for drugs shall be as follows:
- Step 1. Pre-registration stage. Preparation of documents to be filed with Minzdrav:
o Application and Registration dossier that includes
– Administrative documentation
– Chemical, pharmaceutical and biological documentation
– Pharmacological, toxicological documentation
– Clinical documentation (includes, inter alia, clinical trials report)
- Step 2. Registration of drug
o Minzdrav reviews the Application and Registration dossier;
o Minzdrav appoints examination on documents in order to recognize the drug as orphan drug or appoints quality examination and examination of correlation between anticipated benefits and possible risks of drug with the state institution and such institution conducts the relevant examination;
o Minzdrav approves state registration and issues marketing authorization.
The timeframes for Step 2 (the whole registration process) shall be within 160 business days upon the receipt of the application and the relevant documents.
Applicants for marketing authorizations shall generally prove that their products are bioequivalent and therapeutically equivalent to the brand-name product, and clinical trials are not conducted subject to Cl. 2 Art. 38 of Law on Circulation of Drugs. Moreover, according to Cl. 9 Art. 18 of Law on Circulation of Drugs generic drugs shall be released from requirement to submit some documents related to chemical, pharmaceutical documentation, as well as to clinical documentation within marketing authorization process. At the same time according to Cl. 20 Art. 18 of Law on Circulation of Drugs generic drug may be subject to registration upon expiration of 4 years period upon registration of the referential brand-name drug.
Marketing authorization process for generic drugs intends some preferences: according to Cl. 1 Art. 26 of Law on Circulation of Drugs the first three generic drugs registered in Russia shall be subject to accelerated examination which shall be conducted within 80 business days instead of 110 business days. Since such examination shall be the integral part of marketing authorization process, the whole term of marketing authorization procedures shall be reduced.
Accelerated examination which shall be conducted within 80 business days instead of 110 business days shall apply to registration of orphan drugs as well.
The process for obtaining marketing authorization for biologicals is practically the same, but provides for some extra requirements: according to Cl. 15 Art. 18 of Law on Circulation of Drugs biologicals shall be subject to additional documents contained in administrative documentations and chemical, pharmaceutical and biological documentation.
As for biosimilar drugs (follow-ons), according to Cl. 21 Art. 18 of Law on Circulation of Drugs biosimilar drug may be subject to registration upon expiration of 3 years period of registration of the referential drug.
3.B. MEDICAL DEVICES
The steps to obtain marketing authorization and approval timeframes for medical devices shall be as follows:
- Step 1. Pre-registration stage: Preparation of documents, which include:
o Testing of medical devices:
– Approval of measuring instruments (if applicable)
o Preparation of documents for state registration of medical devices
- Step 2. Registration of medical devices (Stage I)
o RZN reviews the documents submitted
o RZN appoints the examination with the state institution and such institution examines the quality, effectiveness and safety of medical devices based on the documents submitted
o RZN permits to conduct clinical trials
- Step 3. Clinical trials of medical devices, that are conducted by the applicant (state registration shall be suspended)
- Step 4. Registration of medical devices (Stage II):
o RZN reviews the documents submitted
o RZN appoints the examination with the state institution and such institution examines the completeness and the results of trials
o RZN approves state registration and issues marketing authorization
The timeframes for Stage I (Step 2) and Stage II (Step 4) shall be 88 business days (58 days for registration activity exercised by RZN and 30 business days for examination conducted by budgetary institution reported to RZN). The term for clinical trials is not included.
4. What are the approximate fees for each authorization?
According to Art. 333.32.1 – 333.32.2 of the Tax Code of the Russian Federation government fees shall be as follows:
- for drugs and biologicals:
o for quality examination and examination of correlation between anticipated benefits and possible risks – around USD 5 350 (RUB 325 000);
o for quality examination and examination of correlation between anticipated benefits and possible risks in respect of drug, permitted for use in Russia for more than 20 years – USD 740 (RUB 45 000);
o for analyzing marketing authorization and issue of marketing authorization certificate – USD 165 (RUB 10 000);
- for medical devices:
o for analyzing marketing authorization and state registration – around USD 115 (RUB 7 000);
o for quality, efficiency and safety examination (dependent on the class of potential risk):
– class 1 – around USD 850 (RUB 45 000);
– class 2a – around USD 1070 (RUB 65 000);
– class 2b – around USD 1400 (RUB 85 000);
– class 3 – around USD 1900 (RUB 115 000).
5. For how long are marketing authorizations/registrations valid? How are marketing authorizations/registrations renewed?
According to Cl. 1 Art 28 of Law on Circulation of Drugs marketing authorization for drug shall be issued for indefinite term, unless the brand-name drug is registered in Russia for the first time: in such case the marketing authorization shall be issued for 5 years and be subject to following confirmation.
Marketing authorization shall be confirmed / renewed with filing the application, that shall be reviewed and registered by Minzdrav within 90 business days. According to Cl. 2 Art. 28 of Law on Circulation of Drugs in the event such registration is obtained, marketing authorization for the drug shall be issued for indefinite term.
According to Cl. 6 of Regulation of the Government of the Russian Federation dd 27.12.2012 No. 1416 marketing authorization for medical device shall be issued for indefinite term.
6. How does the authorization process differ between brand-name products and generic products? Are there differences for local manufacturers versus foreign-owned manufacturers?
The differences between the brand-name and generic product authorization process are covered in Question 3. In general, the differences are that for brand-name products it is necessary to demonstrate the safety and efficiency, and for generic products it is required to demonstrate the interchangeability and bioequivalence.
There are no differences for local manufacturers versus foreign-owned manufacturers in terms of marketing authorization.
7. How are combination products (drug + drug, drug + biologic, drug + device, biologic + device, drug + biologic + device) regulated
Combination products shall be subject to marketing authorization. Combination products may be classified either as drugs (drug / biological) or medical devices (drug / medical device).
According to Cl. 12 Art. 18 of Law on Circulation of Drugs such combinations of registered drugs shall be subject to release from some documents to be submitted on marketing authorization process.
According to subcl. “е” Cl. 27 of Regulation of the Minzdrav dd 09.01.2014 No. 2n the drug, contained in the combination product which is recognized as the medical device, shall be registered as well.
8. How is compliance with regulation monitored and evaluated? Is the regulatory regime comparable with the U.S. Food and Drug Administration or the European Medicines Agency expectations and requirements?
RZN has a permanent pharmacovigilance program, that is based on information on possible adverse effects of the drugs submitted, among others, by manufacturers, distributors, drug stores, healthcare institutions. Moreover, according to Cl. 22 of Art. 18 of Law on Circulation of Drugs the holder of the marketing authorization shall submit pharmacovigilance report on the registered drug to RZN on a regular basis, as specified by the law.
RZN as well operates monitoring in respect of registered medical devices, that is based on notices submitted by persons specified above and by individuals.
Generally, RZN exercises supervision of pharmaceutical activities, supervision of production, manufacture, quality, efficiency, safety, turnover and procedures for the use of medicinal products, which include abovementioned pharmacovigilance activities. The regulatory regime in Russia is comparable to those conducted by U.S. Food and Drug Administration or the European Medicines Agency.
9. What is the potential range of penalties for noncompliance?
RZN is authorized to make on-site visits at any time to inspect premises and verify such compliance and may indicate ex officio legal proceedings to sanction non-compliance. Ultimately these legal proceedings may result in sanctions ranging from administrative fine up to revocation of the marketing authorizations and suspension of circulation of the medical product.
10. Is there a national healthcare system? If so, how is it administered and funded?
In accordance with Art. 29 of Law on fundamental healthcare principles the national healthcare system includes state (incl. federal and regional) and municipal healthcare systems, which respectively consist of relevant state and municipal authorities, operating administration, and of healthcare institutions. The healthcare system is funded with respective national budgetary (federal and regional) and state non-budgetary funds.
Out-patient pharmaceutical care programs are financed via a number of different public sources: the federal budget, regional budgets and compulsory health insurance.
Compulsory health insurance (via the Federal Fund for Mandatory Medical Insurance, FFOMS) funds the reimbursement of medicines provided for in-patient and emergency care. The government maintains the list of vital essential and necessary drugs (“EDL”) outlining which drugs should be made available in the in-patient setting, and which is also used as the basis for a number of out-patient reimbursement schemes.
11. How does the government (or public) healthcare system function with private sector healthcare?
Public and private health sectors operate separately, and there is no interaction between one and another.
Private health insurance is voluntary, but quite common and is generally provided by the employer.
The public health sector normally faces financial issues and implements measures to limit costs, for instance, by pressing for price reductions in public bids and encouraging competition.
12. Are prices of drugs and devices regulated and, if so, how?
Prices for drugs are regulated in terms of public procurement: Cl. 2 Art. 80 of Law on fundamental healthcare principles, Art. 60 of Law on Circulation of Drugs, Regulation of the Government of the Russian Federation dd 28.08.2014 No. 871, Regulation of the Government of the Russian Federation dd 29.10.2010 No. 865 provide for EDL, which prices are regulated by state authorities, and for the relevant procedures. Such maximum sale prices shall be submitted by the manufacturers or their authorized representatives and shall be subject to state registration with Minzdrav. Purchasing price in public procurement sector shall not exceed the price calculated on the basis of such registered price considering the relevant maximum wholesale mark-up.
Prices for medical devices are regulated in terms of public procurement as well: Cl. 2 Art. 80 of Law on fundamental healthcare principles and Regulation of the Government of the Russian Federation dd 22.09.2014 No. 968 provide for the list of medical devices, which prices are regulated by state authorities. Such maximum sale prices shall be submitted by the manufacturers or their authorized representatives and shall be subject to state registration with RZN. Purchasing price in public procurement sector shall not exceed the price calculated on the basis of such registered price considering the relevant maximum wholesale mark-up.
13. How are drugs and devices used by patients paid for? What roles do public and private payers play?
In the private sector, most payments are made on an out-of-pocket basis. Private insurers are improving the level of pharmaceutical coverage since the private market in medicines has grown considerably. Subject to Cl. 2 Art. 80 of Law on fundamental healthcare principles vital essential and necessary drugs are provided by the budgetary healthcare institutions within the framework of medicare, that is subject to the following reimbursement with compulsory medical insurance funds (for more details please refer to Question 14 below).
14. Who dispenses drugs and devices to patients and how are those dispensers compensated?
Commonly, budgetary healthcare institutions dispense medical products prescribed by their healthcare professionals. Products are prescribed from EDL and the same list for medical devices, that is annually approved by the Government, and as stated by standards of care, that are approved by Minzdrav. Public healthcare institutions directly procure such medical products mostly by public tender process and provide medicare, that is subject to the following reimbursement with the funds of public insurers.
At present, in-patients (including patients in day hospitals) and patients to whom emergency care is provided are fully reimbursed for the cost of medicines used as part of their treatment.
In the out-patient setting, however, only certain population groups are eligible to receive either free or partially subsidized prescription medicines. Eligibility for these benefits is determined by the federal government – although the regional authorities have the right to extend reimbursement to additional groups, provided that such coverage is funded by the regional (rather than federal) budget. Prescribed medical product shall be sold to welfare beneficiaries in a drug store, whether it is private or not, free of charge or with 50% discount, as provided by Art. 6.1 of Federal Law dd 17.07.1999 No. 178-FZ “On state social assistance”. The cost of such medical products shall be reimbursed with public healthcare institutions, which prescribed the medical product.
15. What are the professional and legal responsibilities of those who dispense drugs and devices? What role do they play in providing patient care, information, and safety?
The Government provides for EDL and medical devices which may be procured by public healthcare institutions and therefore dispensed by their healthcare professionals.
RZN exercises complex control over circulation of medical products, including public sector, and monitors the indicia of preferential drug provision and conducts inspections in medical institutions and drug stores, as well as in authorities of the subjects of the Russian Federation related to healthcare sector.