Preservation of notification-only principle by declaration of amendments into wholesale transfer prices on medications purchased at the cost of governmental funds

On 11 July 2014 the Ordinance # 240 of the Cabinet of Ministers of Ukraine of 02.07.2014 ‘On Reference Pricing on Medications and Medicinal Products that are Purchased at the Cost of Public and Local Budgets’ (Ordinance of Cabinet of Ministers of Ukraine # 240 – hereinafter) was posted on the governmental web-site.

Therefore, Ordinance of Cabinet of Ministers of Ukraine # 240 that is to approve a novice Procedure for Declaration of Amendments into Wholesale Transfer Prices on Medications and Medicinal Products introduces certain novations to the process of declaration, i.e. :

• For medications – the procedure will be entirely based on the mechanism of setting up comparative (reference) prices that are established in the countries of origin, the Republic of Bulgaria, the Republic of Moldova, the Republic of Poland, the Slovak Republic, the Chekh Republic, the Republic of Latvia, Hungary and the Republic of Serbia and Ukraine;
• For medicinal products –standalone aspects were subject to amendments, however, a simplified procedure with notification-only principle by declaration of amendments was preserved.

Тherefore, Ordinance # 240 of Cabinet of Ministers of Ukraine provides for a demarcation of medications and medicinal products.

As of 01.08.2014 amendments into wholesale transfer prices on medications without customs fee and VAT shall be declared in case of those medications exclusively that are entered into the State Registry of Medical Equipment and Medicinal Products or the ones that have been subject to declaration on compliance of medicinal products, i.e. in case of medicinal products that have been subject either to state registration or evaluation of compliance with the requirements of Technical Regulations and those that are purchased in bulk or in part at the cost of public and local budgets.

Тherefore, by way of Ordinance # 240 the list of documents was expanded in terms of those that are filed by an applicant to MoH of Ukraine namely as follows: as of 01.08.2014 the applicant shall also file the explanatory note with reasons for the necessity of amendments into wholesale transfer prices on medication. Taken into account that the law-maker has not specified the requirements to the explanatory note we assume that it is to be drawn by the applicant in free-format.

By way of Ordinance # 240 it was defined that the list of documents that are necessary for the procedure of declaration of documents is exhaustive that rules out request of other supplementary documents.

Regularity of amendments was subject to amendments: if before the law-maker defined regularity of declarations not less than once per two years, now by way of the Ordinance of Cabinet of Ministers #240 it is foreseen that declaration is performed not more often than once per month due to changes in the conditions of production and sales of medicinal products that do not depend on type of business activity that the applicant pursues.

By way of the Ordinance of Cabinet of Ministers #240 it is envisaged that the amendment as regards to wholesale transfer price by each type, class, brand of medicinal product shall be subject to declaration

• Local producer — in local currency without costs due to loading-unloading and transportation;
• Foreign producer — in local currency exclusively at official NBU rate as of the date of filing declaration of amendments in wholesale transfer prices on medication or medicinal product.

Therefore, by way of Ordinance # 240 it is envisaged that amendments in wholesale transfer prices on medications that were entered into the registry of wholesale transfer prices on medications and medicinal products before Ordinance of Cabinet of Ministers # 240 came into effect shall be subject to declaration in line with the present Ordinance before March, 1, 2015.

Besides, by way of Ordinance # 240 the Ordinance № 794 of Cabinet of Ministers of Ukraine of 13.08.2012 ‘Declaration of Amendments in Wholesale Transfer Prices on Medications and Medicinal Products that are Purchased at the Cost of Public and Local Budgets’ was cancelled. Hereby, by way of Ordinance # 240 no amendments in terms of size of differential rates of retail markups that are written into Ordinance of Cabinet of Ministers of Ukraine # 955 of 17.10.2008 were made.