Alexey Mikhailov commented on Kommersant FM radio on government procurement of medicines

Date: 07 August 2019

A quarter of all public procurement of vital medicines this year has failed. The main reason for this is the too low marginal price of contracts. It was reported by Kommersant. The number of failed tenders doubled comparing to last year.

Manufacturers refuse to bid because of economic reasons, said Alexey Mikhailov, head of PATENTUS patent practice:

“This is due to the demarche of pharmaceutical companies, especially foreign ones, in connection with the use of the reference price mechanism promoted by the FAS. The price is based on the prices of similar drugs in the countries of comparison.

While purchasing medicines at tenders the government issues an application at a price that is not higher than the price calculated on the basis of prices in the reference countries. Foreign pharmaceutical manufacturers do not go to bidding, they argue that Russia has a difficult regulatory environment, so it is necessary to conduct local clinical research, spend money on marketing and the production.

The cost of drugs in Russia is higher than the reference, so they do not go to tenders. This is mainly due to those drugs that are already out of patent protection. It can be produced by many different pharmaceutical manufacturers at once.”

Thank You!