Ayrat Farrakhov: ‘If a medicine isn’t effective, the manufacturer should not be paid’
A State Duma deputy from Tatarstan about the amendments developed with his colleagues to the federal law on public procurement
To buy medicines without generics out of competition and reconsider contract terms in case a medicine turns out to be ineffective — a group of Russia’s State Duma deputies have launched such an initiative creating amendments to Federal Law No. 44 On Contract System in Purchase of Commodities, Works and Service for State and Municipal Needs.” As one of the authors of the bill parliamentarian from Tatarstan Ayrat Farrakhov explained, this will allow saving public money and improving the provision of Russians with medicines. The member of the Duma’s Committee for Budget and Taxes talks about the initiative in an op-ed column for Realnoe Vremya.
It is wrong and unfeasible to close public pharmacies
We prepared amendments to the law on a contract system. It is two very important and serious bills. The first is directly related to the Republic of Tatarstan. The case is that Tatarstan as well as 12 other Russian regions have a centralised medication supply system that provides all hospitals with medicines, vaccines, other medication, and this system proved to be very good.
During the Soviet era, there were centralised warehouses, which were privatised in many regions in the 90s. But in Tatarstan, Nizhny Novgorod, Kaluga, in big and strong regions, authorities did correctly and didn’t permit this privatisation. Such a centralised system of storage, supply medicines, centralised supply of public pharmacies, and they are as a rule located in the countryside where businesses don’t open pharmacies has survived. The law of the Republic of Tatarstan, the law of Nizhny Novgorod, which chose the only supplier, was the legal foundation for the conservation of this system.
With the changes made to Federal Law No. 44, a region was taken away the right to choose the only supplier. This law comes into force on 1 July 2023. This means that a huge reform will have to be made, public pharmacies will have to be closed, and we consider this wrong and unfeasible. Therefore the first part of our legislative initiative is the creation of a possibility of saving this model for those regions that have such a system. Our initiative has already been supported by the government of the country today. This is why we made this amendment together with Senator Artamonov (former governor of Kaluga Oblast), Senator Ryabukhin (representative of Ulyanovsk Oblast) and deputies Topilin and Metshin to save this system of centralised medicine supply in the republic.
“We won’t pay if the medicine didn’t help”
The second part of the amendments is causing debates at the moment, and we are actively working on it. The idea is to increase the affordability of innovative medicines. An innovative medicine is a medicine that doesn’t have an analogue and substitute. When we take the usual Aspirin, more than 20 companies make with different names. But when a completely new medicine is made, it is unique, that’s to say, it doesn’t have a generic, it is the only one.
In such situations, we think, Federal Law No. 44 on contract system doesn’t work because when we plan to buy this innovative product, according to FL No. 33, everything should be based on competition, that’s to say, two medicines should compete. And when the medicine is unique, there is no competition, and we have to buy it for a price its producer or rights holder fixed. We think it is unfair, it is wrong, and in this situation, the norm in which it is necessary to agree on lowering the price should turn on and pay only when this medicine is effective. If the medicine didn’t lead to an improvement of the disease, if the medicine turned out to be ineffective, one shouldn’t pay the producer for this medicine.
In our opinion, on the one hand, this will allow being more economical about public money, that’s to say, we won’t pay when the medicine didn’t help. On the other hand, we will help to make innovative medicines more affordable.
There is a simple example: everybody knows that today it is the most expensive medicine to treat spinal muscular atrophy, children’s severe disease that still cannot be treated, the medicine is named Zolgensma, One ampoule costs $2 million today. Considering that such diagnoses are made regularly, and there are such children in Tatarstan too, and we help them as much as we can, the producer of this medicine makes huge money, of course. We assume that it is impossible to reduce the cost unless a competitor appears. Therefore we offer to agree on the price, which will allow lowering. But at the same time to pay when this medicine really helped a patient.
But today the federal law on public procurement doesn’t allow doing this. The competition, payment, the reception of the medicine, no matter if the medicine helped or not, the state has to pay the money. We think it is wrong, in this regard, Federal Law No. 44 needs to improve. In the international practice, in developed countries, such a system is called risk sharing, it is a system of division of risks between the producer and the state, or the buyer. It seems to me fairer, it will allow saving money and buy other medicine in the future patients really need.
“It will be necessary to show specific indicators that will characterise the situation”
These two bills I am actively working touch Federal Law No. 44. A good question is how the efficacy of some medicine will be assessed. In any case, when a contract between the producer and the state is created, it will be necessary to show specific indicators that will characterise the situation as improvement, worsening or no change. Clearly, a state without change or aggravation won’t require payment for this medicine.
Therefore every disease has certain indicators that will characterise improvements or an absence of improvements. It is the dynamics of movements, any parent understands if the treatment helps or not.
I have always said that Federal Law No. 44 is a law that causes the greatest criticism today because the principles it is based on, which is competition, a lower price, they don’t always work and don’t always work in medicine supply.
The law on public procurement is made amendments year after year, moreover, tens and hundreds amendments are made, and today Federal Law No. 44 is very and very complex. Today this law, unfortunately, doesn’t always guarantee the maximum price fall, the best quality of the medicine. This is why, of course, we should think about not only improving the federal law on contract system. We probably should anyway think about new legislation that will evaluate procurement procedures more objectively.
The author’s opinion does not necessarily coincide with the position of Realnoe Vremya’s editorial board.