Inna Demidova, head of regulatory affairs for Russia and CIS at ELC Group, looks at the upcoming regulatory requirements facing pharmaceutical companies looking to enter, expand or build momentum in what is currently the world’s fastest growing market
The continued dynamic growth of the Russian healthcare market makes it a compelling opportunity for the pharmaceutical industry. In 2013 the market notched up an impressive 14% year-on-year growth to RUB 1.045 trillion ($28.91 billion), with foreign producers dominating the top 10 listing of manufacturers operating in the market.
Achieving market access is becoming increasingly complex and challenging following a host of new laws and regulations designed to boost domestic manufacturing. In 2012 the Russian government announced plans to increase the volume of domestic production of medicines on the country’s Essential Drugs List (EDL) to 90% by 2018 and launched its Pharma 2020 strategy, which is designed to increase the total share of domestically produced pharmaceutical and medical products consumed in the country to 48% by 2020. As a result, a number of multi-national organisations have already taken the decision to locate their manufacturing within Russia itself.
From a regulatory perspective, the process of harmonising Russian and international pharmaceutical standards remains a ‘work in progress’ and international pharma companies need to be well orientated with the national legislation, rules and restrictions operating in Russia and CIS – and prepared to manage uncertainties and risk in what is a fast changing political environment.
What’s changing, and why
In 2010 the Ministry of Health of the Russian Federation issued Federal Law #61. The law changed the registration process for drugs, introducing the requirement for a local clinical or bioequivalence study for every submitted drug – a costly new step for international drug firms. There is just one exception to this requirement; if a molecule has been marketed for more than 20 years in Russia then this obligation can be avoided. The law also set out the regulatory framework for the Essential Drugs List (EDL) and the pricing of drugs included on the EDL.
To restrict the importation of essential drugs, regulations relating to the Pharma 2020 programme, which are designed to enforce the localisation of the full cycle production of international pharma companies, are now coming into force. From January 2014 all local manufacturers had to certify with the GMP, as a consequence of which many big pharma names took the decision to initiate local manufacturing relationships in Russia.
On 22 August 2014 it was announced that the Ministry of Industry and Trade and the Ministry of Health would jointly develop additional measures to support local pharmaceutical manufacturers. A draft directive, due to be submitted to the Russian government in mid-September, is expected to establish limits on the import of drugs if the country of origin is not a member of the Eurasian Customs Union (which currently includes Russia, Belarus and Kazakhstan – Armenia is ongoing). If two or more generics are already manufactured in CU countries, then an imported drug cannot be considered for participation in a tender or auction. The directive is also expected to incorporate incentives to support international pharmaceutical companies that invest in local manufacturing.
In an evolving regulatory landscape, pharmaceutical companies need to consider their planned post-approval marketing activities when preparing their initial registration dossier and reflect carefully on their planned post-approval marketing activities. The potential for local production and the selection of local distributors will be important and should be given careful deliberation when evaluating the best market access strategy approach to take.