Restructrurization Of Pharmaceutical Industry

The previous month brought significant changes into Uzbek pharmaceutical regulations, having re-established some fundamental patterns of the respective market's operation. Aiming to spur development of the local market and to ensure satisfaction of the increasing demand for cheap medicines, the Government tries to optimize the main regulatory rules set for the industry. The key changes are given below with possible implications outlined at the end

Cancellation of Mandatory Tenders for Social Significant Medicines:

The Presidential Decree of October 30, 2017, canceled the mandatory tenders for centralised government purchases of socially significant medicines and medical products ("SSM"), the list of which includes more than 300 products.

Previously, in accordance with the Presidential Decree No. 2647 of October 30, 2016, no direct purchases of SSM were permitted. The Ministry of Foreign Economic Relations and Trade held centralised state-run tenders between local and foreign suppliers on one side and local distributors and medical establishment on the other side. The Decree No. 2647 aimed to resolve the problem of high prices for basic medicines designated as "socially significant" and provided that price caps were to be set forth for these tenders based on quarterly analysis of world prices by the specially created Commission for Pricing Controls in the Pharmaceutical Industry (the "Commission"). No clear methodology and procedural rules were, however, put forward and it, for example, remained unclear whether the price caps would apply to medicines' based on international nonproprietary names or trade names.

In July 2017, the Government, being informed of delays in supplies of certain SSM and inefficiencies in the tender procedure, entitled the state owned enterprise "Uzmedexport" to import SSM based on direct agreements with suppliers without participating in tenders.

Nevertheless, from November 1, 2017, all private domestic companies were allowed to conclude direct import contracts for purchase of SSM without the state being directly involved. With that, relevant price caps are still being set and the direct import contracts may not provide for higher prices. It was, however, resolved by the other Presidential Decree, which is described below, that the Commission would be liquated and the Ministry of Healthcare would become the price-setter. Moreover, state-owned "Uzmedexport" was reorganized into "Uzbekimpex" under the newly established...