Control over the margins for medicinal products has not been canceled

On September 10, 2014 the Cabinet of Ministers of Ukraine adopted the Resolution No. 442 “On theOptimization of the System of Central Bodies of Executive Power”, according to which it was decided to liquidate the State Inspection on Price Control. In view of the adopted decision a special attention is attracted to the issue concerning the authority that will exercise control over prices and margins for medicinal products and medical devices.

In particular, the function of the monitoring of the dynamics of prices (tariffs) on the consumer market is entrusted to the State Statistics Service of Ukraine.

As for the function of control over margins, there is an opinion in the publications related to the Resolution of Cabinet of Ministers No. 442 that the control over margins is coming out of a governmental control.

In our opinion, this conclusion is unwarranted.

Part 1of the Resolution of the Cabinet of Ministers No. 442 provides for that the State Service on Safety of Foodstuffs and Consumer Protection (State Service) is established. Among other things, the new State Service is entrusted with the functions of the state control over compliance with the requirements for the formation, establishment and implementation of state-controlled prices. Namely, this formulation could be misleading. However, Article 13 of the Law of Ukraine "On Prices and Pricing" provides for that the state regulation of prices is carried out by the Cabinet of Ministers of Ukraine, the executive authorities and local self-government in accordance with their authority by:

1. Establishing mandatory for use by business entities: fixed price; border prices; boundary level of trademargins (extra charge) and supply and sale markups; boundary levels of profitability; supply size of remuneration; the size of bonuses, discounts).
2. The introduction of the declaration of price changes and / or registration price.

In other words, establishing a level of margins is the state regulation of prices.

In addition it should be noted that the same wording is contained in part 1, paragraph 3 of yet current Regulation of the State Inspection on Price Control.

Thus, the functions of control over prices and margins for medicinal prices and medical devices are assigned to the new State Service on Safety of Foodstuffs and Consumer Protection, and the claim that control over margins will be out of the state control can be regarded as premature.

Legal Advisor to the Legal Alliance Company, Natalia Lavrenova