New Russian law tightens the procedure for putting medicines on the market and complicates ending distribution agreements

Also, since 28 November 2018, pharmaceutical companies have to notify the authorised bodies of any planned termination or suspension of the production or importation of medicines for the coming year.

As a whole, the amendments* are aimed at protecting consumers from low-quality medicines entering the market. At the same time, the new measures will most likely increase the time it takes to put medicines on the market and the costs to pharmaceutical companies in meeting all regulatory requirements. Also, the need for prior notice of the discontinuation of production or supply of medicines will make the termination of distribution agreements more complicated.

New quality assurance requirements instead of declarations and certificates of conformity

Mandatory certification and declaration of compliance will no longer be applicable when marketing medicines.

Instead, pharmaceutical companies will be obliged to submit to Roszdravnadzor a certificate of analysis and confirmation by a person authorised on behalf of the manufacturer or importer that the medicine corresponds to the registration dossier. In addition, a pharmaceutical company will have to submit to Roszdravnadzor a test report conducted by a Russian laboratory (accredited with the Russian Ministry of Health or Roszdravnadzor) of the first three batches of a first-time manufactured or imported medicine.

The Russian government will later determine the rules for the submission of the above documents, the procedure for issuing a test report and the cost of this service.

Companies will have to submit to Roszdravnadzor, no later than 1 February of each year, a test report conducted by an accredited laboratory regarding one batch of each trade name of a medicine (including pharmaceutical form and dosage) marketed in the previous year.

Immunobiological medicines can only be marketed after having obtained permission from Roszdravnadzor. Such permission will be issued on the basis of a report from a laboratory accredited with the Ministry of Health or Roszdravnadzor.

Fulfilling all the above requirements will require more time and resources than the previous system of obtaining a declaration or certificate of conformity.

That said, these requirements will not apply to medicines intended for conducting clinical trials, examinations for state registration or imported into Russia for the treatment of a life-threatening condition of an individual patient.

Notification of discontinuation of production or importation

Pharmaceutical companies (manufacturers and importers) must notify Roszdravnadzor and the Russian Ministry of Industry and Trade about any planned suspension or discontinuation of the production or importation of medicines no later than one year in advance.

In practice, this may make it more difficult to terminate distribution agreements between foreign manufacturers and Russian importers. As a general rule, such agreements give the manufacturers the right to unilaterally terminate an agreement without cause provided prior notice is given (e.g. three or six months) or immediately terminate if the other party is in breach. Since the termination of an agreement with a single distributor actually means the suspension or termination of the importation of medicines into Russia, the new requirement to notify the regulator at least a year in advance creates a risk for manufacturers. If a manufacturer exercises its contractual right to quickly terminate an agreement, it will be in breach of regulatory requirements.

We expect that, in the future, the competent authorities will issue clarifications of this requirement to strike a compromise between the interests of the state and pharmaceutical manufacturers.

Liability for non-compliance

If a pharmaceutical company does not submit quality documents or test reports to Roszdravnadzor, or does not receive permission to market an immunobiological medicine, Roszdravnadzor will be entitled to suspend the circulation of this medicine until it receives the relevant documents.

A legal entity may be fined up to RUB 70,000 (EUR 930) if it fails to notify or is late in providing information to Roszdravnadzor about the quality confirmation of medicines, the termination or suspension of production, or importation.

Conclusion

Despite the fact that the new quality assurance requirements will only come into force in a year’s time, pharmaceutical companies now need to revise their procedures for putting medicines on the Russian market. They should also take into account the obligation, from 28 November 2018, to notify the competent bodies in situations where termination of an agreement may lead to suspension or termination of importation of medicines into Russia.

Written by: Vsevolod Tyupa and Alexey Shadrin

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