Pharmaceutical Good Practices Code approved

22.04.2016

Legal Update No. 560

Goltsblat BLP advises that on 19 April 2016, the Federal Antimonopoly Service of the Russian Federation (the "FAS of Russia") approved the Good Practices Code in the Pharmaceutical Industry (the "Code"). The Code was developed by the FAS of Russia in conjunction with the Association of European Businesses (AEB), the Competition Support Non-Profit Partnership and representatives of the pharmaceutical industry. Goltsblat BLP lawyers were actively involved in developing the Code as members of the Competition Support Non-Profit Partnership's working group.

The Code’s major concerns are self-regulation of the pharmaceutical market in Russia and setting of equitable, transparent and fair rules for competitive cooperation in the pharmaceutical industry.

In developing the Code, both the current antitrust practice and recommendations made by market players were taken into account. In particular, the Code lays the groundwork for handling problems giving rise to disputes:

  • medicine suppliers are themselves authorised to determine the economically or technologically justifiable number of distributors with which to conclude supply contracts;
  • the terms and conditions of contracts concluded following any public tenders are not equivalent to those of the contracts made in other market segments owing to a different pricing procedure;
  • medicine suppliers are authorised to grant bonuses and/or discounts to distributors in connection with conclusion of a contract with a government customer;
  • in evaluating compliance by potential distributors, medicine suppliers may follow the FCPA requirements and UK Bribery Act, together with national and international anti-corruption rules. Even so, the Code sets formal criteria for selecting distributors, thereby limiting unconditional application of the above foreign laws;
  • the terms and conditions have been specified for entering into exclusive agreements, including for localising production.

The Code differs significantly from similar industry-specific codes in that it attempts to establish a mechanism for resolving disputes between its participants. Any disputes are resolved by the Health & Pharmaceuticals Committee of the Association of European Businesses. The Code participants may also refer a dispute arising from the Code to the AEB Arbitration Court.

An organisation may join the Code by signing a relevant declaration and publishing it on official websites of the pharmaceutical organisations that have acceded to it.

For the official publication of the Code, please refer to the FAS of Russia website.

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