14 July 2016
Ukraine is changing the regulatory landscape for pharmaceutical business

Simplification of drug registration

On 31 May 2016, Ukrainian Parliament passed a law[1] to significantly simplify the market access for certain categories of medicinal products. In particular, the law introduces a streamlined registration (marketing authorization) process for any drugs already authorized by competent authorities of (i) the U.S., Switzerland, Japan, Australia, Canada and (ii) the EU under centralized authorization procedure, in each case for use in relevant countries. Such registration is to be performed within 17 business days and involve a limited documentation check, without a full-scale local review of the registration dossier. The law entered into effect on 19 June 2016. However, bringing it to life still requires approval of a number of by-laws that are being developed by the Ministry of Health of Ukraine. When implemented, simplified registration procedures are expected to reduce the market entry barriers for international pharmaceutical business.  

E-procurement

Ukraine is completing the transfer to e-procurement system which is to replace traditional paper tenders and increase transparency of procurement process[2]. With effect from 1 August 2016, e-procurements become obligatory nationwide. Most of public procurements in the country will now be made through online auctions where suppliers use internet-based software to bid against each other in real time against published specifications.

Please note that in 2016 Ukrainian e-tendering procedures will not apply to centralized public procurements of medicines and medical devices by the Ministry of Health of Ukraine. These are expected to be fully performed through specialized international procuring agencies (UNICEF, UNDP etc.) based on their own standards, rather than national law. Nevertheless, Ukrainian e-auctions will be relevant for the remaining pharmaceutical purchases by local self-government authorities, public medical institutions, etc.

Reference pricing

Ukrainian Government is intending to introduce a reference pricing system for drugs purchased by public sector entities for state or municipal funds. In July 2016, an updated draft of relevant regulation was presented to the public by the Ministry of Health of Ukraine. According to the draft, threshold prices for the above medicines shall be determined with reference to prices (i) in a basket of reference countries (including Bulgaria, Moldova, Poland, Slovakia, Check Republic, Latvia, Hungary, Serbia), and (ii) in Ukraine. Such threshold prices shall be reviewed by a special commission with the Ministry of Health of Ukraine as part of the process for their declaration in Ukrainian register of threshold wholesale prices for medicinal products (“Price Register”).

At this stage, draft regulation does not give sufficient clarity as to the principle for calculation of threshold price, i.e. whether it will be based on minimum / average prices in the basket or on any other methodology.

Reference pricing system is proposed to be implemented with effect from 1 August 2016. If it is approved, all prices currently included into the Price Register will need to be updated by marketing authorization holders based on new requirements by 1 October 2016. Pharmaceutical companies are advised to keep track of further progress of this initiative and check the relevance of their prices declared in Ukraine. It is possible that, during transition to the new system, Price Register may become temporarily blocked and/or further price approval decisions may be significantly delayed.

Reimbursement

In parallel to the reference pricing initiative discussed above, the Ministry of Health of Ukraine has presented its proposals for launching a pharmacy reimbursement project in Ukraine starting from 1 October 2016. The new reimbursement system is suggested to cover:

  • 23 categories of medical conditions, including, among others, cardiovascular diseases, bronchial asthma, certain types of diabetes, rheumatism, epilepsy, chronic skin diseases etc.;
  • 93 medicinal products based on INN;
  • certain socially and economically vulnerable groups of patients, including, among others, children up to 17 years old, disabled persons, retired people with minimum pension benefits etc. Depending on group of patients, the reimbursement shall be full or partial.

The reimbursement prices for products to be covered by the project are proposed to be approved by the Ministry of Health of Ukraine and calculated based on the procedure that is yet to be released.

It is expected that the above reference pricing and reimbursement initiatives may be approved by Ukrainian Government in rather short-term perspective, thus significantly changing the regulatory environment of Ukrainian pharmaceutical market. Please note that the final versions of relevant regulations may differ from those analysed in this legal alert and keep an eye out for our future updates.


[1] The Law of Ukraine “On Introduction of Amendments to Article 9 of the Law of Ukraine “On Medicinal Products” Regarding the Simplification of the State Registration of Medicinal Products” No. 1396-VIII.

[2] Under the Law of Ukraine “On Public Procurements” No. 922-VIII dated 25 December 2015.

Author: Viktoriya Podvorchanska, Counsel at Egorov Puginsky Afanasiev & Partners Ukraine

 

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