In light of the volatile situation with COVID-19, the President of Russia signed Decree No. 187 dated 17 March 2020 “On Retail Trade of Medicines for Medical Use” (“Decree No. 187”) under which distance selling of over-the-counter (“OTC”) medicines is permitted. Following execution of Decree No. 187, efforts to draft and pass the law allowing distance selling of medicines intensified and on 1 April 2020 the law passed in its third reading by the State Duma and on 3 April 2020 was signed by the President of the Russian Federation. In spite of much discussion by market participants on this topic over the last few years, some of whom had contributed to the development of a draft law which previously failed to pass in the Russian parliament, the onset of the COVID-19 pandemic proved to be a decisive factor in the passage of the draft law on the distance selling of OTC medicines.
HAVE MARKET CONCERNS BEEN RESOLVED?
With the signing of Decree No. 187 and the passage of the associated draft law, several issues relating to the distance retail medicine trade have been resolved. In particular, the law addresses some of the following recent market concerns:
- Distance selling of OTC medicines (except illegal drugs, psychedelic medicines and medicines containing over 25% of ethyl alcohol) is now permitted;
- Distance selling of prescribed medicines (except illegal drugs, psychedelic medicines and medicines containing over 25% of ethyl alcohol) is now permitted in cases of urgent medical need and emergency or where there is an “occurrence of a threat of transmission of a disease constituting a danger to the public”, the specific rules for which will be temporarily determined by the Government of Russia on a case-by-case basis; and
- The distance retail trade of medicines can be undertaken by pharmacies that (i) hold a licence to perform pharmaceutical activities and (ii) have obtained the permission of the federal executive authority exercising functions relating to control and supervision in the area of healthcare. Therefore, in practice, the law allows the distance trade of medicines to be performed by any person (including both medicine manufacturers and retail traders operating in the distance selling market which have not operated in the pharmaceutical sector previously), provided that such persons trade through a pharmacy under the relevant licence to carry out pharmaceutical activity and have obtained the respective permission of a state authority.
However, the new law does not address other important considerations. For example, the law does not set out the procedure governing issuance of a permission for distance selling (including additional compliance requirements on organisations intending to undertake distance selling of OTC medicines), and any applicable rules related to such selling and delivery, given the latter have yet to be developed by the Government of Russia.
Similarly, the legality of the distance selling activities of any pharmacies that are already engaged in the distance retail trade of medicines remains ambiguous.
In the absence of detailed regulation on some of the above issues, the market is likely to find that some of its key concerns remain unresolved. These might include the following:
- who will deliver medicines to the customer (eg a courier with specialised education or any person)?;
- will the delivery territory will be limited to the geographic locality where the licensed pharmacy operates or is it sufficient for traders to operate through only one licensed pharmacy?;
- how will the relevant authorities ensure compliance with, and protection of, consumer rights and quality control in respect of the medicines being provided?; and
- in the event of an emergency, will the Government of Russia be able to develop temporary rules for the sale of prescribed medicines, whilst ensuring the compliance of market participants in relation to consumer rights and the circulation of prescriptions?
HSF will be monitoring the passage of subordinate legislation on this subject and will inform you of any developments as soon as the respective regulation is passed.
The contents of this publication are for reference purposes only and may not be current as at the date of accessing this publication. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.
© Herbert Smith Freehills 2020