upharmacia - ukrainian pharma market news digest. february 2016

Ukrainian PharmaceUtical market monthly

UpharmaciaMacroeconomic Environment | Market & Companies News | Regulatory Updates | Healthcare News

Issue: 02 2016

UPharma Consulting is a consulting company, operating in the healthcare and pharma sectors. Our clients - pharmaceutical companies, pharmacy chains, distributors, investment funds, banks, and other stakeholders in the healthcare sector.

uPharma ConsultIng, KIevwww.upharma-c.com / [email protected]

Ukrainian PharmaceUtical market monthly: February 2016

2015 2016

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

MACROECONOMIC INDICATORSQ1 Q2 Q3 Q4

GDP (bn USD) 17.353 20.795 25.552

GDP growth, % y-o-y -51% -35% -26%

Export of goods (bn USD) 2.98 2.99 3.45 3.07 2.94 3.09 3.15 3.09 3.35 3.23 3.13 3.36 2.04Export growth, % y-o-y -32% -37% -32% -39% -41% -30% -34% -22% -22% -23% -21% -11% -31%

Import of goods (bn USD) 3.01 2.86 3.17 2.86 2.63 2.76 2.98 3.88 3.24 3.22 3.07 3.12 2.23Import growth, % y-o-y -34% -41% -35% -38% -46% -37% -34% -2% -30% - 27% -27% -32% -26%

Industrial production sales (bn USD) 6.01 4.56 5.51 5.91 5.65 5.79 5.71 5.42 5.72 6.29 5.92 6.37 4,93Industrial production growth, % y-o-y -41% -54% -45% -33% -38% -35% -33% -23% -20% -21% -19% -17% -18%

Retail turnover of enterprises (bn USD) 1.97 1.44 1.61 1.66 1.94 1.83 1.94 1.88 1.86 2.04 1.80 2.01 1.60Retail turnover growth, % y-o-y -50% -61% -56% -40% -35% -38% -41% -32% -38% -31% -33% -29% -19%

Unemployment rate 2.0 2.0 1.9 1.8 1.8 1.7 1.6 1.6 1.5 1.5 1.6 1.9 1.9

Average salary (USD) 218 148 166 176 193 202 202 194 199 207 193 223 180

OFFICIAL CURRENCY EXCHANGE RATEUAH/USD 15.8 24.5 23.3 22.7 20.9 21.2 21.8 21.6 21.8 21.8 23.3 23.4 24.3

UAH/EUR 18.5 27.8 25.3 24.5 23.3 23.8 23.9 24.0 24.5 24.6 25.1 25.4 26.3

PHARMACEUTI CAL INDUSTRY INDICATORSExport of pharma products (mio USD) 11.79 12.05 13.37 13.46 13.00 15.36 13.85 9.01 13.79 12.2 11.7 15.77 8.31

Pharma Export growth, % y-o-y -1% -42% -50% -44% -39% -39% -6% -54% -47% -37% -52% -28% -30%

Import of pharma products (mio USD) 90.2 114.5 103.3 103.7 84.2 115.0 106.5 93.3 121.1 147.1 141.3 142.1 103.7Pharma Import growth, % y-o-y -49% -47% -67% -36% -60% -44% -47% -47% -31% -28% -24% -42% 15%

Pharma retail sales, values (mio USD) 239.8 177.0 197.6 180.0 193.0 177.7 172.6 177.1 193.2 206.3 196.6 212.3 198.9Retail sales in values growth, % y-o-y -41% -54% -47% -40% -28% -29% -32% -24% -28% -26% -20% -18% -17%

Pharma retail trade, volumes (mio units) 132.4 143.9 141.5 122.6 124.5 118.4 119.5 122.5 126.7 130.2 129.0 136.4 133.6Retail sales in volumes growth, % y-o-y -21% -15% -21% -20% -11% -9% -10% -8% -11% -5% -4% -5% 1%

WACP, USD 1.95 1.81 1.24 1.41 1.47 1.52 1.48 1.45 1.52 1.58 1.52 1.56 1.49WACP growth, % y-o-y -21% -22% -40% -27% -23% -21% -23% -18% -19% -22% -18% -14% -23%

CPI of Ukraine 128.5 134.5 145.8 160.9 158.4 157.5 155.3 152.8 151.9 146.4 138.1 134.6 131.9

Pharma products CPI 149.2 155.5 170.3 164.7 159.5 153.5 151.8 149.4 145.8 142.1 146.6 143.3 140.3

Local companies share, values, % 38.7 38.5 39.6 40.7 41.5 41.7 41.8 41.4 41.4 41.4 41.7 40.9 42.3

Local companies share, volumes, % 74.9 75.2 77.1 77.6 77.6 77.9 78.4 78.2 76.5 75.7 75.8 76.7 75.6

MACROECONOMIC ENVIRONMENT

Description of the indicators:

Macroeconomic Indicators

GDP (Gross Domestic Product) is an aggregate measure of production equal to the sum of the gross values added of all resident, institutional units engaged in production (plus any taxes, and minus any subsidies, on products not included in the value of their outputs) calculated in current prices. Converted from UAH to USD in accordance with an average official NBU exchange rate in the corresponding period. Hereinafter: excluding the temporarily occupied territory of the Autonomous Republic of Crimea and City of Sevastopol, as well as the part of zone of the antiterrorist operation. Source: State Statistics Service of Ukraine.

Export of goods is a sale of goods by Ukrainian subjects of foreign economic activities to foreign subjects of foreign economic activities (including non-cash payment) with or without exportation of these goods through the customs border of Ukraine, including the re-export of goods. Initially calculated in USD. Source: State Statistics Service of Ukraine.

Import of goods is a purchase (including non-cash payment) of goods by Ukrainian subjects of foreign economic activities in foreign subjects of economic activities with or without the importation of these goods into the territory of Ukraine, including the purchase of goods for domestic consumption by establishments and organizations of Ukraine located abroad. Initially calculated in USD. Source: State Statistics Service of Ukraine.

Industrial production sales is the value of industrial goods, which are actually shipped in the period, as indicated in documents decorated as the basis for calculating with the buyer (customer), regardless of income payments for them. Converted from UAH to USD in accordance with an average official NBU exchange rate in the corresponding period. Source: State Statistics Service of Ukraine.

Retail turnover of enterprises is the value of consumer goods sold via retail trade and restaurants to the population by all operating enterprises. It also includes direct retail sales by industrial, transport and other non-trade enterprises. In addition, retail turnover includes retail sales of food products to departments, organizations and enterprises to provide meals to the people they serve (at sanatoria, children’s care institutions, hospitals, etc.). Reflected in current prices. Converted from UAH to USD in accordance with an average official NBU exchange rate in the corresponding period. Source: State Statistics Service of Ukraine.

Unemployment rate is a ratio (percent) of the unemployed registered at the State Employment Service to the average annual population of working age. Source: State Statistics Service of Ukraine.

Average salary is an average value of remuneration in cash and in kind paid to employees for time worked or work done. Converted from UAH to USD in accordance with an average official NBU exchange rate in the corresponding period. Source: State Statistics Service of Ukraine.

Official currency exchange rate is the rate established by the National Bank of Ukraine under which Ukrainian national currency – UAH (Ukrainian hryvnia) will be exchanged for foreign currency (USD or EUR). Calculated as average value in the corresponding period. Source: National Bank of Ukraine.

Pharmaceutical Industry Indicators

Export of pharma products is an export of goods related to the group “Pharmaceutical products” under the Ukrainian Classification of Goods for Foreign Economic Activities. Initially calculated in USD. Source: State Statistics Service of Ukraine.

Import of pharma products is an import of goods related to the group “Pharmaceutical products” under the Ukrainian Classification of Goods for Foreign Economic Activities. Initially calculated in USD. Source: State Statistics Service of Ukraine.

Pharma retail sales are retail sales of different product categories of “pharmacy basket” (drugs, medical devices, cosmetics and food supplements) in values and volumes. Converted from UAH to USD in accordance with an average official NBU exchange rate in the corresponding period. Source: Morion.

WACP (Weighted average cost of a pack) is a ratio of pharma retail sales in values to pharma retail sales in volumes.

CPI (Consumer price index) is an indicator of changes at the time of prices and tariffs for commodities and services being purchased by the population for unproductive consumption calculated to corresponding month of previous year. Source: State Statistics Service of Ukraine.

Pharma products CPI is a Consumer price index of “Pharmaceutical products, medical products, appliances and equipment” group calculated to corresponding month of previous year. Source: State Statistics Service of Ukraine.

Local companies share is the share (percent) of sales related to Ukrainian companies in overall pharma retail sales in values and volumes. Source: Morion

Table: Key macroeconomic indicators in Ukraine

(Jan 2015-Jan 2016)


KEY ECONOMIC EVENTS » On Feb 3, the Minister of Economic Development of Ukraine Aivaras Abromavicius announced his decision to

resign due to the blocking of systematic and important reforms in Ukraine from the side of pro-government forces. Subsequently, political crisis in Ukraine deteriorated and on 17/02/2016, the Parliament abortively voted for the Yatseniuk’s Cabinet of Ministers dismissal. However, the future of the parliamentary coalition and the government is not clear yet.

» The IMF may stop its funding program in Ukraine, if reforms and corruption fight do not accelerate, Christine Lagarde stated. “Ukraine risks a return to the pattern of failed economic policies that has plagued its recent history,” she said. Ukraine was expected to receive up to USD 5.8 bn in 2016, 1.7 bn was scheduled for February.

» In 2015, public debt of Ukraine fell 6.2% to USD 65.5 bn or 81.5% of GDP.

» The National Bank of Ukraine expects the consumer inflation to slow down to 12% by the end of 2016. The Bank also projects inflation to be at the level of 8% by the end of 2017.

» Capital investment in Ukraine decreased by 1.7% y-o-y in 2015, whereas in the 9M2015 the decline amounted to 6% y-o-y. In 2014, the decline amounted 24.1% y-o-y.

» Economy Ministry forecasts 1% (± 0.5%) y-o-y rise in Ukraine’s GDP in 1H2016. According to preliminary data, in 2015, GDP in Ukraine fell by about 10% y-o-y.

» Ukraine’s Minister of Foreign Affairs Pavlo Klimkin has proposed establishing a working group on the development of freight traffic on the so-called new Silk Road.

» Ukraine diminished its exports to Central Asia and Caucasus by 60-80% due to Russia’s embargo, the Deputy Economy Minister reported. The regions accounted for 3.1% of Ukraine’s total exports in 2015.

» In Jan the industrial output in Ukraine fell by 1.7% y-o-y.

» According to the World Bank’s expert, the restoration of Donbas would require about USD 1.5 bn. At present, the State Agency for the restoration of Donbas has USD 300 mio.

239.8

177.0

197.6

180.0193.0

177.7172.6 177.1

193.2206.3

196.6

212.3

198.9132.4

143.9 141.5

122.6 124.5

118.4119.5122.5

126.7130.2 129.0

136.4

133.6

100

110

120

130

140

150

160

100

120

140

160

180

200

220

240

260


Pharma retail salesValues (mio USD) & Volumes (mio units)Jan 2015-Jan 2016

mio USD mio units

2015 2016

11.79 12.05

13.37 13.46 13.00

15.3613.85

9.01

13.75

12.20 11.70

15.77

8.3190.2

114.5

103.4 103.7

84.3

115.0106.6

93.3

122.2

147.1 141.3

142.1

103.7

20

40

60

80

100

120

140

160

0

2

4

6

8

10

12

14

16

18


Ukrainian Internation trade in pharma productionExport & Import, mio USDJan 2015-Jan 2016

Export Import

2015 2016

6.01

4.56

5.515.91

5.65 5.80 5.715.43

5.726.29

5.926.37

4.93

1.97

1.44 1.61 1.66

1.941.83

1.94 1.88 1.862.04

1.802.01

1.60

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0

1

2

3

4

5

6

7


Industrial production sales & Retail turnover of enterprises surplus

Jan 2015-Jan 2016, bn USD

Industrial production sales Retail turnover of enterprises

2015 2016

15.81

24.4823.26 22.71

20.92 21.23 21.76 21.63 21.78 21.823.3 23.4 24.319.26

28.95 29.5226.92

25.48 24.91 26.09 25.91 26.1424.6 25.1 25.4 26.3128.5

134.5 145.8

160.9 158.4 157.5 155.3 152.8 151.9146.4 146.6 143.3 140.3

0

20

40

60

80

100

120

140

160

180

0

5

10

15

20

25

30

35


OFFICIAL CURRENCY EXCHANGE RATE+Consumer Price IndexJan 2015-Jan 2016

UAH/USD UAH/EUR CPI of Ukraine

2015 2016


MARKET & COMPANIES NEWS“Indar” joined “Manufactures of medications of Ukraine” Association

The main Ukrainian insulin producer “Indar” has joined “Manufacturers of medication of Ukraine” Association. The other members of the Association are “Farmak”, “BCPP”, “Interchem”, “YuriaPharm” and “Kusum Pharm”.

The consolidations of interest of two biggest local insulin producers (“Indar” and “Farmak”) will benefit both of them as well as all members of the Association, the Director of the Association said.

“Manufactures of medications of Ukraine” Association was established in 2010 to create conditions for the most effective cooperation between its members and protect their interests.

Ukrainian market remains essential for Indian pharmaceutical companies

The Deputy Minister of chemicals and fertilizers of India Sudhansh Pant considers Ukraine as a very significant market for Indian companies.

“Ukraine’s market remains prospective despite the trade turnover in USD was declining over the last years,” Mr. Pant noted. “However, we are working to bring the trade indicators at the level, which was few years ago.”

Mr. Pant has also indicated the possibilities of implementation of projects on drugs manufacturing localization at the facilities of Ukrainian pharmaceutical producers.

“Microkhim” launches Aspriks

“Microkhim” launches Aspriks (ketorolac) spray, which is used for the relief of acute pain syndrome of various origins. Aspriks is the only ketorolac drug available in Ukrainian market today.

“Microkhim” was 16th Ukrainian producer on Ukrainian market in 2014. The main product segments for the company are nervous system and cardiovascular system. Aspriks has become the first company’s drug for musculoskeletal system.

In 2015 Gedeon Richter’s performance in Ukraine worsened significantly

According to consolidated report on Redeon Richter’s results in 2015, the company’s sales in Ukraine has fallen by 51.5% y-o-y (from EUR 55.3 mio to EUR 26.8 mio). The company implemented a more strict receivables control and voluntary shipment restrictions as a reaction to the recent political turmoil and the deepening economic decline in Ukraine, which have characterized the country since the beginning of 2014. The company also explains poor results with the devaluation of the Ukraine’s national currency and decline in customers’ purchasing power.

Generally, in the CIS region, the Gedeon Richter decreased its indicators by 10.1% y-o-y with 5.9% y-o-y cut in Russia. The total Gedeon Richter’s sales in 2015 increased by 2.9% y-o-y to EUR 1.18 bn.

“Biofarma” will invest about USD 12 mio in its development in 2016

Ukraine’s leading producer of donor blood-made preparations “Biofarma” plans to remain the amount of investments in 2016 at the level of 2015 (USD 12 mio). In 2015, the company spent USD 5 mio for the construction department of probiotics, USD 3 mio – for the reconstruction of Sumy station for blood transfusion and USD 2 mio – for the development of new drugs. The company also intends to restore the institution of human donors to produce the feedstock for the production of blood products on the base of Sumy station for blood transfusion.

The Director of “Biofarma” Konstantin Efimenko stressed that blood drugs are in priority for the company’s further development. According to Mr. Efimenko, in 2015 “Biofarma” increased its incomes by 45%, while blood drugs contributed 40% of sales.

Previously, in 2014, “Biofarma” has built a new plant in Bila Tserkva (Kyiv Region) for USD 42 mio. The company now produces 20 immunobiological drugs from donor blood as well as drugs obtained with the use of recombinant DNA technology and probiotics.

“Fitofarm” reports 6x decline in its net profit in 2015

In 2015 “Fitofarm’s” net profit has decreased 6.12 times y-o-y to UAH 1.81 mio. The company’s shareholders will discuss the financial performance, stuff issues, the issue of changing the location of the plant, etc. at the meeting appointed on 04/04/2016. “Fitofarm’s” production facilities is located in Artemivsk (Donetsk Region, the ATO zone).


The company manufactures more than 80 herbal and synthetic drugs, including Eroton, its best-selling drug against erectile dysfunction.

The shareholders will also consider the private placement of unsecured bonds of the company. “Fitofarm” is predominately owned (99.84%) by Miraphytos Holding Ltd. (Cyprus).

“Farmak” has doubled its net profit in 2015

“Farmak’s” net profit in 2015 has increased by 96.9% y-o-y to UAH 407.3 mio. In 2014, the company had a 29.7% decline. On 24/02/2015, the Supervisory Board appointed Antonina Zubkova instead of Pavlo Zhebrivskiy as the Board’s Head. The company plans to reach USD 1 bn sales amounts by 2020 by

expanding activity at external markets.

In Feb, “Farmak” acquired Polish company KWW Kotkowski Wierzbicki Wegrzyn sp. z o.o. engaged in marketing and supply of biologically active additives at the local market. “Acquisition of marketing company if Poland will allow to take a big step in the implementation of the export policy,” the CEO of “Farmak” Filya Zhebrivska said.

REGULATORY UPDATES

Adjustment of Mailing Procedures for Tax Assessment Notice

Ministry of Finance of Ukraine Order #1204 as of December 28, 2015, entered into force on February 16. This Order updates the mailing procedures for tax assessment notices to be sent to taxpayers by regulatory authorities.

The regulatory body develops a notice of tax assessment in the following cases:

» If a taxpayer fails to submit his tax (customs) declaration in a timely manner, and during tax control it has been determined that the taxpayer conducted business activities, which appeared to be taxable and created indexes subject to declaration;

» If the taxpayers inspection results (except electronic inspection) show that the taxpayer underestimated or overestimated his tax liabilities, credits, tax refunds and/

or overstated the negative value of taxable profits tax or negative value of the taxpayer’s VAT amount declared in tax (customs) declarations, refining calculations;

» If customs inspection results received upon the termination of customs clearance and release of the goods show that the taxpayer underestimated or overestimated his tax liabilities declared in customs declarations;

» other cases provided by law.

Notice of tax assessment is developed for each separate tax due together with the penalties, as well as for each penalty and poena for the violation of other legislation being under supervision of regulatory authorities.

Tax assessment notice should be provided together with the calculation of tax due, decrease (increase) of tax liability amount and/or tax credit, and/or budget-

funded VAT refund, and/or decrease of negative value of taxable profits tax or negative value of VAT amount, penalty and poena, stating the date and reference number of declaration (refining calculation), report for the relevant reporting period.

Notice of tax assessment is considered to be submitted to the taxpayer – legal entity if such assessment notice is delivered by hand to the official employee of such taxpayer against acknowledgement or forwarded in a letter with notification of the delivery.

Notice of tax assessment is considered to be submitted to the taxpayer – individual if such assessment notice is delivered by hand to such individual or his authorized representative or forwarded in a letter with notification of the delivery to the address of residence or of the latest known location of such individual.

Provided by


Ukraine’s Law “On Public Procurement” Has Come Into Force

As a general rule, the Law applies, provided that the purchase price of the subject good (goods), service (s) is equal to or greater than 200 000 hryvnias, and the price of the work is equal or greater than 1.5 million hryvnias. At the same time, the Law provides a number of cases to which the provisions of the latter do not apply.

The new Law provides for the implementation of public procurement with the use of two competitive regulatory procedures: open tendering and competitive dialogue, as well as a non-competitive procedure - negotiating the purchase procedure.

An important innovation of the Law is the introduction of electronic procurement (e-auction), the electronic review system, as well as the implementation of the exchange of information, documents, to provide clarifications in the e-procurement system.

The main objectives are defined by the Law to be , in particular, increased levels of competition in public procurement, to promote transparency of the use of budget funds and the implementation of the Association Agreement in concern to the implementation of EU directives.

The law comes into force from April 01, 2016 for the central executive authorities and customers operating in specific areas of management; August 01, 2016 for all other customers.

Accordingly, the Law of Ukraine “On the Implementation of Public Procurement” will lose force from 1 August 2016.

The Basis for the Imposition of Fines for the Violation of Labour Laws has Been Established

The Cabinet of Ministers of

Ukraine amended the Procedure of implementing fines for the violation of the labour and employment legislation with decree No 55 dating from 03.02.2016.

The bases for the imposition of a fine are as follows:

» performs work without an employment contract, and the establishment of a period of work or working part-time in the case of actually doing the job full-time, set at the enterprise, institution or organization;

» an act concerning the detection during the audit of a business entity or employer of a violation of the labor legislation and / or employment, drawn up by an official or territorial authority of Gostrud (State Labour Office).

In addition, unpaid voluntary fines are collected:

judicially by regional centers of employment on the basis of the case file transmitted by the territorial bodies Gostruda

judicially by the territorial authorities of the Gostrud (State Labour Office)

authorities of the State Executive Service

The document will come into force on the day of its publication.

Rules for Keeping VAT Recovery Register Entered Into Force

Resolution of the Cabinet of Ministers of Ukraine № 68 as of 22.02.2016 “On Approval of Rules for Keeping the Recovery Value Added Tax Register” entered into force on February 23.

The Registers of VAT Recovery are developed by the State Fiscal Service in accordance with the following data:

» Declarations and refining VAT calculations and applications submitted as a part of tax statements or refining calculations accepted by the State Fiscal Service of Ukraine at the local level;

» Tax information collected and received by fiscal authorities.

The date of application inclusion into the register is considered to be the date of provision of the following:

» Declaration for the reporting period in case the application is submitted within its contents;

» Refining calculation in case the application is submitted within its contents;

» Declarations with violation of the deadlines for submission for the reporting period in case the application is submitted within its contents.

The registers are published at the official State Fiscal Service’s web-site on a daily basis.

Information Concerning Clinical Trials Shall Become Open to the Public

On the 16th of February a draft legislation of Regulation № 4074 “On Amendments Concerning the Law of Ukraine “On Medicinal Products” (concerning the access to materials on pre clinical studies and clinical trials)(hereinafter- draft legislation) was registered in the Verkhovna Rada.

The abovementioned draft legislation proposes the disclosure of information contained in the materials of the pre clinical studies and the clinical trials that are attached to the application for the registration of the medicinal product. Relevant amendments have been foreseen to article 9 of the special Law.

In the opinion of the legislation draft’s initiators, the closed nature of such data results in the circulation of drugs, whose effectiveness and safety have not been proved. Therefore the draft legislation at hand is aimed at initiating access to such information, which will enable all interested citizens, their associations and professionals to decide on the selection for the appointment and the medical use


HEALTHCARE NEWSThe Minister of Healthcare withdrew his resignation letter

On Feb 4, the Minister of Healthcare of Ukraine Alexander Kvitashvili has withdrew his letter of resignation together with three other Ministers, who’s resignation decisions followed the statements of Minister of Economic Development of Ukraine Aivaras Abromavicius, who had resigned shortly before due to the interventions into the Ministry’s work from the Deputies of pro-government parties. The Ministers agreed to not leave their positions in exchange for the adherence to following principles: inadmissibility of pressure from political parties, maximum government transparency, fair wages for civil servants, transparent public procurement, etc.

Unlike the other Ministers, Mr. Kvitashvili had submitted his resignation letter on Jul 2, 2015, but the decision on his dismissal was not approved by the Parliament.

The new Draft Law “On Drugs” to be submitted to the Parliament until the mid-March

The members of Public Health

Committee of the Ukrainian Parliament made a decision to form a working group, which revises the previous versions of the Draft Law “On Drugs” and develops a new version of it, which is to be submitted to the voting until Mar 16. Previously, the Parliament had registered the Draft Law “On Drugs” #2162 (form the Deputy A. Shypko) and #2162-1 (from the Deputy Oleg Musiy). Moreover, the Deputy Head of the Public Health Committee Iryna Sysoenko provided the new Draft Law “On Drugs” considering the WHO recommendations. The working group is expected to develop the unified version of the Draft Law based on those three versions.

The government intends to create the State insurance company

The Cabinet of Ministers of Ukraine plans to establish the State insurance company within the medical reform, the PM said. “We want to develop a mechanism of state insurance medicine, which is to cover medical costs of Ukrainians, Mr. Yatsenyuk noted. “The government has to provide emergency care and basic level of health care provision. Medical insurance system will help this

field to develop.”

The IMF proposes Ukraine to cancel the preferential VAT on drugs

On Feb 8, the IMF published the Technical Assistance Report on Ukraine containing the list of recommendations from the Fund’s experts. Among the main recommendations was to increase the VAT rate from 20% to 21% and cancel the preferential taxation of drugs (7%). The Professional Pharmacy Association of Ukraine spoke against implementation of the recommendations saying the 14% increase in the VAT tax rate will double the prices on drugs as producers, distributors and retailers are all forced to introduce their markups on drugs.

During the 2H2015, Ukrainian government was intending to introduce the 20% VAT on drugs, but the pharmaceutical community has defended the preferential rate. In addition, since Jan 1, 2016, drugs are not subject to 5% customs duties.

The MOH started the development of the National policy on drugs provision in collaboration with the

of the medicinal products on the basis of objective data concerning the level of proof on their safety and effectiveness.

As of today, the draft legislation has been submitted to the Ministers of Parliament for review.

See all news on regulatory updates on the Legal Alliance website.

http://www.legalalliance.com.ua/eng/mailer/?q=94a9dbf760effd2e87d4ed6477528fe3

http://www.legalalliance.com.ua/eng/mailer/?q=94a9dbf760effd2e87d4ed6477528fe3


WHO

On Feb 10, the European Mission of the WHO held a consultative and methodological meeting with the working groups engaged in the development of the National policy on drugs provision, which is aiming to increase the accessibility of drugs. Scientific and coaching session was headed by the Programme Manager for Health Technologies and Pharmaceutical of the WHO Regional Office for Europe Hanne Bak Pedersen.

Mrs. Pedersen indicated the key tasks within the development of the policy:

establishing of effective and transparent procurement of drugs for public funds;

improving access to drugs and

medical devises through effective regulation in accordance with the WHO recommendations;

implementation of the strategic long-term planning of procurement of vaccines and vital drugs;

The development of the National policy on drugs provision was started on 25 Jan 2016.

AIMP Ukraine and EBA called the government to terminate destabilization of the State Expert Center

Association of international Pharmaceutical Manufacturers of Ukraine and the European Business Association appealed Ukraine’s key officials asking to take immediate action to terminate permanent

destabilization of the SE “State Expert Center of the MOH of Ukraine” after on 12/02/2016 the servants of the Security Service of Ukraine had conducted the search in the Center and blocked its activity. In 2015, such searches have already been conducted in the Center, as law enforcement authorities suspected its officials in corruption. The associations stated that such actions complicate the Center’s performance and destabilize the situation concerning drugs registration.

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