Life Sciences & Health in Photo by Hush Naidoo Overview of the medical The National Project on market in Russia Health Care

The Russian pharmaceutical market continues to grow The main umbrella of new government spending on and after years of declining growth, in 2019 the pharma- health care is the national project “Health Care”. This ceutical market grew to 1818 billion rubles (about €22.5 project, with a total budget of 1725,7 billion rubles billion at the exchange rate of 80 rubles per euro ). Sales (about €21 billion) for the coming years, covers eight ar- of drugs to consumers constitute the main driver of eas, including improving of primary health care, cardio- growth in this market. vascular diseases and cancer, and digitalization of health care. The original goals of the project were to in- The volume of the Russian market of medical devices crease life expectancy to 78 years and reduce mortality topped 300 billion rubles (about €3.8 billion) in 2019, a by 17% in Russia in 2024. In June 2020 President Putin growth of 6% compared to 2018 and one and a half announced that the planning for the National Projects times more than in 2014. may be adjusted and the timeline may be extended to 2030, partly as a result of the COVID-19 crisis. The de- Dutch medical exports to Russia (medicines, medical tails of this adjustment are not yet fully known at the devices etc.) continue to increase. In 2019 they totaled time of writing. more than 1.3 billion euros (an increase of 70% com- pared to 2018), representing 20% of total Dutch exports to Russia.

2011 2012 2013 2014 2015 2016 2017 2018 2019 Volume (pharma), 851 969 1122 1262 1395 1510 1634 1663 1818 billion rubles Growth, % - 14% 16% 12% 11% 8,3% 8,2% 1,8% 10,4% The most expensive programme is on oncology, which includes plans to create regional cancer registers, as well Structure of the Russian as to construct two cancer clinics (in Tomsk and Kos- health care system troma regions) and five cancer hospital departments (in , Khakassia, , Volgograd and More than half of the Russian healthcare budget in re- Lipetsk regions). The Ministry of Health plans to organ- cent year was covered by compulsory state medical in- ize an information campaign for early detection of can- surance (CSMI), which is paid by the Russian working cer. population and which provides a defined set of medical services for free for the entire Russian population. The Mortality from cardiovascular diseases should be re- federal government contributed another 12%, and the duced by 24% in 6 years. Within the framework of the remaining third comes from a variety of sources, includ- National Project, more than 600 vascular centers in Rus- ing voluntary (private, additional) health insurance and sia will be fully re-equipped by 2024. budgets of the Russian regions.

Under the programme on primary health care, Russia Management and control over healthcare institutions in plans to construct 1500 new medical-obstetric stations Russia is carried out on Ministerial (Federal), regional and 1300 mobile medical complexes. Through the con- (large centers and cities) and local (municipal) levels. On cept of “lean polyclinics” (optimized polyclinics oriented the federal level, three ministries are involved: the Min- on the patient), Russia plans to optimize at least half of istry of Industry and Trade (manufacturing), Ministry of adults and all children's polyclinics. Health (certification) and Ministry of Science and Higher Education (education of medical personnel). In June 2020, consultancy firm Lighthouse finished a market research into the National Projects, focusing in- ter alia on the health care sector. Commissioned by the Recent and upcoming chal- Netherlands Enterprise Agency and the Ministry of For- eign Affairs, Lighthouse looked into what these national lenges and developments projects could offer for Dutch companies already active There are a number of recent (legal) developments in on or interested in the Russian market. Dutch compa- Russia that may pose challenges to international compa- nies that are interested in the market study are invited nies that want to enter the Russian market. As Russia is to send an email to [email protected]. seeking to become more self-sufficient in the health care market, domestic companies are favoured in public ten- the Ministry of Health of the Russian Federation regis- ders through a variety of incentives. An example is the ters medicines for quality control purposes, Rospatentis “third one out” rule, which means that a foreign product in charge of patent protection and giving the patent will not be considered in a tender procedure when there owner a monopoly on the use of a drug created on the are at least two Russian producers that can deliver a basis of a patented invention. The exchange of informa- comparable product. Companies that wish to participate tion between the two databases is suboptimal and com- in public tenders and wish to have a significant presence panies are therefore advised to contact a legal expert on the Russian market may therefore want to consider when considering marketing patented medicines. localising their production in the Russian Federation.

Another challenge is the inspection regime. Since 2016, Relevant medical events the Russian government requires a “Good Manufactur-  MES Kazan, (traditionally held in November/ ing Practice” (GMP) certificate. European companies will December; dates for 2020 unknown) first need an EU GMP and then arrange for a Russian in-  Russia Health Care Week, 7-11 December 2020 spection as well (costs are approx. EUR 50.000). The  International start-ups pitching event at Innovation availability of inspectors is limited and despite the fact for Health Forum in Rotterdam, where in previous that the requirements are very similar to the EU, the years Russian start-ups participated – 15-16 April percentage of refused applications appears high. 2021

The Russian medical market is moving towards further integration in the Eurasian Economic Union (EEU). This What can the Embassy do means i.a. that GMP certificates and other regulatory regimes are expected to transition to a EEU-wide sys- for you? tem over the next few years, culminating in a single EEU market for pharmaceutical products and medical de- The Netherlands Embassy in the Russian Federation can vices, planned to come into force by 2025. facilitate your company in a number of ways:  Provide more detailed market information based on E-health your specific questions and needs, including a com- pany check on a prospective partner on the Russian Russian professionals are increasingly interested in the market; use of technology in health care. The term „e-health‟ is  Answer first-line questions re. doing business in currently understood in Russia to mean „tele-health‟: Russia; using technology to conduct, for example, a remote in-  Facilitate contacts with regional authorities terview between patient and doctor. Although the more (, , , etc.). mature types of e-health infrastructure are not yet available (such as using artificial intelligence for diag- nostics), some Russian companies are developing op- More Information erations in these spheres and have a dedicated interest in developing e-health. For its part, the government For further information, you can contact the Economic seeks to ensure that by 2024, all medical organizations department of the Netherlands Embassy in Moscow via should provide patients with electronic access to per- [email protected] or phone no. +7 495 797- sonal medical documents in a database owned by the 29-21. state. You can find general information about doing business Due to the high number of (population and) medical in Russia, available subsidies and financing for entre- cases, Russian doctors gain strong practical skills. More- preneurs on the Embassy‟s website and on the website over, as Russia is traditionally strong in developing IT of the Netherlands Enterprise Agency (in Dutch). solutions, there is a significant potential in qualified specialists and start-ups in AI projects. Sanctions

Legal regulation and Please note that EU sanctions are imposed on the Rus- intellectual property rights sian Federation. Companies are responsible to ensure that their activities comply with the sanction regula- The protection of intellectual property rights of medi- tions. For more information about sanctions, you can cines in Russia is challenging and there are cases of contact the Netherlands Enterprise Agency‟s sanctions drugs whose patents are still valid, but which are regis- desk (in Dutch) and consult the handbook on dealing tered and marketed by a second company as generic with sanctions on their website. drugs. The main reason for this is bureaucratic: whereas