Cassation Court pronounced legitimacy of FAS refusal to increase threefold prices for “Prostenongel” medicinal drug

Earlier Courts of two instances confirmed legitimacy of the efforts of the antimonopoly body and the rightness of applying the established requirements to register prices for vital and essential drugs

On 21 March 2017, the Arbitration Court of the Mosocw District dismissed a cassation appeal of “Pharmsynthez” PJSC and pronounced legitimacy of the judgment of Mosocw Arbitration Court, the ruling of the 9^th Arbitration Appeal Court and refusal of the Federal Antimonopoly Service to register the ceiling ex-works price for “Prostenongel” medicinal drug manufactured by “Kevelt” (Estonia).

The reason for FAS refusal to register the ceiling ex-works price for “Prostenongel” medicinal drug was the applicant submitting a ceiling ex-works price for official registration that was nearly threefold higher than the earlier excluded price for the same drug (from 307.82 RUB to 911.74 RUB). FAS received an application to register the new price only four months after excluding the previous price.

The claimant insisted that the three-year ban to register the new price when the old one is excluded should be dated only from the data when the regulatory act establishing the prohibition came into force¹. All Court, however, dismissed such interpretation of the law.

Deputy Head of FAS Department for Control over Social Sphere and Trade, Maxim Degtyaryov pointed out: “The law regulating pricing for medicinal drugs prohibits increasing prices within three years from the date of the drug manufacturer withdrawing the earlier registered price. The ban prevents economically unreasonable growth of prices. The Claimant’s proposal that the three-year period, within which it is impossible to increase drug price, should be dated from 1 October 2015, is an incorrect interpretation of the substantial law, therefore, Courts of three instances supported FAS in the dispute”.

¹ No. 979 Decree of the Government of the Russian Federation “On making changes to No. 865 Decree of the Government of the Russian Federation of 29 October 2010 and on approving the method for calculating the ceiling ex-works prices set by the manufacturers of the drugs included in the list of vital and essential drugs, in the official registration and re-registration” of 15.09.2015 came into effect on 1 October 2015.