Igor Artemiev proposes to reject the “third is a crowd” principle in most cases of medicinal drug purchases and move to preferences

The Federal Antimonopoly Service (FAS Russia) proposes to abolish the “third is a crowd” principle in medicinal drug procurement from the budget funds and said that Russian companies should move to the preference regime. Head of FAS Igor Artemiev made this statement at a briefing of the Association of European Business in Moscow on 6 March 2017.

The “third is a crowd” rule excludes possibility of foreign companies participating in auctions for procurement of drugs and medical products if two Russian companies are already participating in such tenders.  

Igor Artemiev explained: “There were already incidents when Russian budget lost significant sums because of this rule when a foreign company was prepared to offer a price one billion RUB lower than domestic companies. Nevertheless, the foreign company was denied that opportunity. Thus, it was possible to purchase drugs with the budgetary funds for one billion RUB more and more patients would have been able to get the necessary drug”.

Head of FAS proposes for Russian companies to move to the preferences principle, pointing out that currently Russian companies already enjoy 15% preferences. It can be lowered, however.

Reference:

In 2016 three bids were filed for an auction on procurement of “Rituximab” (International Non-Proprietary Name) by the Russian Ministry of Health Care under the “7 high-cost nosologies” federal programme. The bid of the third participant on “Rituximab” was rejected, however, due to applying the “third is a crowd” rule. At the same time the registered ceiling ex-works “Rituximab” was 40% lower that the price offered by the auction winner for the first lot and 70% lower for the second lot. Therefore, potential savings on both lots could have reached 1.2 billion RUB. The bidders allowed taking part tin the auctions reduced the price by only 1-2%.