OREANDA-NEWS. November 19, 2012. As part of discussing a draft Strategy for Drug Provision to the Population up to 2025, the Federal Antimonopoly Service would like to present its position regarding the problems of drug supply the Russian Federation, reported the press-centre of FAS Russia.

The FAS position may seem somewhat unorthodox for those continuously dealing with the range of problems of drug provision, since it establishes a hierarchy of the problems and proposes integrated but sufficiently specific ways to resolve them. The key identified problems are also unorthodox: “absence of competition and related high costs and low availability of drugs for the population” and “poor control and surveillance in health care”.

The Federal Antimonopoly Service (FAS Russia) repeatedly denoted an outrageous difference in prices for similar drugs in the same presentation and dosage (up to 59 times) that is the result of the absence of competition. FAS outlines special reasons preventing competition in this field: unregulated drug substitutability; non-transparent, controversial procedure for drug registering that complicates the administrative procedure for price restriction and does not allow arbitration review of the results of expert examinations. All this factors create the environment conducive to anticompetitive cooperation of unfair market participants at all stages of drug circulation, aimed primarily against consumers and the state budget, resulting in high drug prices.

Under such conditions, the mandatory registration of the maximum ex-works prices of producers and fixing the maximum wholesale and retail mark-ups have not eliminated the reasons for high drug prices and have not created conditions for price reduction. Recognizing timely and short-term effect of the above measures, it is impossible not to note several adverse consequences: unprofitable production of some life-saving and essential drugs resulting in decreased industry investments required to modernize drug production to move to GMP standards in 2014; washing-out cheap drugs from circulation; disinterest of producers to reduce prices; artificial multiple presentations that lead to significant unreasonable growth of prices for some drugs.

It is obvious that new approaches to price restriction and stimulating price reduction are necessary. Such an approach is to create conditions for competition on drug markets. FAS understand these conditions as a set of measures that not only introduce the concept of substitutability to the health-care legislation but also include a definitive transition of all industry enterprises to the GMP standard in 2014; removing unreasonable barriers in drug registration; compiling the list of substitute drugs; prescribing drugs on prescription forms and according to international non-proprietary names; and other organizational measures stimulating consumption of generic drugs.

The second issue is of institutional nature. It is related to poor medical surveillance in Russia. Historically, in Russia there are several supervisory services involved in health care – Roszdravnadzor [the Federal Service on Surveillance in Health Care], Rospotrebnadzor [the Federal Service on Customers’ Rights Protection and Human Well-Being Surveillance] and Rosselkhznadzor [the Federal Service for Veterinary and Phytosanitary Surveillance]. In addition, surveillance powers of all three Services are weakened by disproportionate fines for violations of the law in view of their public danger. The surveillance function over medical drug circulation is weakened by fragmentation between three agencies: the Ministry of Industry and Trade is responsible for licensing of drug production and license control; the Ministry of Health Care registers drugs; and Roszdravnadzor exercises control over drug circulation. It prevents heath care reforms and does not allow to efficiently enforcing the above measures. Serious managerial and legislative solutions are required to overcome the weakness of medical surveillance.

Presenting FAS opinion of the problems of drug provision, FAS understands that until today the issues of surveillance and competition as the main driver for reducing prices and increasing drug availability were not in the focus of attention of the professional community. In Russia the health care system traditionally relies more on the administrative-command methods of problem solving, in particular support affordable drugs by significantly increasing budget allocations. Global experience, however, has shown inefficiency of such approaches to drug provision since even rich countries cannot make drugs affordable for most of the population without developing competition and establishing strong surveillance supporting the basic conditions and requirements for bona fide drug production and conduct of all market participants.

FAS invites professional community to take part in discussing our vision of the drug provision and the measures for resolving the problems.