Upharmacia - Ukrainian Pharma Market News Digest. February 2016

Ukrainian Pharmaceutical Market Monthly
Upharmacia
Macroeconomic Environment | Market &
Companies News | Regulatory Updates |
Healthcare News
Issue: 02 2016
UPharma Consulting is a consulting company, operating in the healthcare and pharma
sectors. Our clients - pharmaceutical companies, pharmacy chains, distributors, investment
funds, banks, and other stakeholders in the healthcare sector.
UPharma Consulting, Kiev
www.upharma-c.com / mailbox@upharma-c.com

Ukrainian Pharmaceutical Market Monthly: February 2016
2015 2016
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
MACROECONOMIC INDICATORS
Q1 Q2 Q3 Q4
GDP (bn USD) 17.353 20.795 25.552
GDP growth, % y-o-y -51% -35% -26%
Export of goods (bn USD) 2.98 2.99 3.45 3.07 2.94 3.09 3.15 3.09 3.35 3.23 3.13 3.36 2.04
Export growth, % y-o-y -32% -37% -32% -39% -41% -30% -34% -22% -22% -23% -21% -11% -31%
Import of goods (bn USD) 3.01 2.86 3.17 2.86 2.63 2.76 2.98 3.88 3.24 3.22 3.07 3.12 2.23
Import growth, % y-o-y -34% -41% -35% -38% -46% -37% -34% -2% -30% - 27% -27% -32% -26%
Industrial production sales (bn USD) 6.01 4.56 5.51 5.91 5.65 5.79 5.71 5.42 5.72 6.29 5.92 6.37 4,93
Industrial production growth, % y-o-y -41% -54% -45% -33% -38% -35% -33% -23% -20% -21% -19% -17% -18%
Retail turnover of enterprises (bn USD) 1.97 1.44 1.61 1.66 1.94 1.83 1.94 1.88 1.86 2.04 1.80 2.01 1.60
Retail turnover growth, % y-o-y -50% -61% -56% -40% -35% -38% -41% -32% -38% -31% -33% -29% -19%
Unemployment rate 2.0 2.0 1.9 1.8 1.8 1.7 1.6 1.6 1.5 1.5 1.6 1.9 1.9
Average salary (USD) 218 148 166 176 193 202 202 194 199 207 193 223 180
OFFICIAL CURRENCY EXCHANGE RATE
UAH/USD 15.8 24.5 23.3 22.7 20.9 21.2 21.8 21.6 21.8 21.8 23.3 23.4 24.3
UAH/EUR 18.5 27.8 25.3 24.5 23.3 23.8 23.9 24.0 24.5 24.6 25.1 25.4 26.3
PHARMACEUTI CAL INDUSTRY INDICATORS
Export of pharma products (mio USD) 11.79 12.05 13.37 13.46 13.00 15.36 13.85 9.01 13.79 12.2 11.7 15.77 8.31
Pharma Export growth, % y-o-y -1% -42% -50% -44% -39% -39% -6% -54% -47% -37% -52% -28% -30%
Import of pharma products (mio USD) 90.2 114.5 103.3 103.7 84.2 115.0 106.5 93.3 121.1 147.1 141.3 142.1 103.7
Pharma Import growth, % y-o-y -49% -47% -67% -36% -60% -44% -47% -47% -31% -28% -24% -42% 15%
Pharma retail sales, values (mio USD) 239.8 177.0 197.6 180.0 193.0 177.7 172.6 177.1 193.2 206.3 196.6 212.3 198.9
Retail sales in values growth, % y-o-y -41% -54% -47% -40% -28% -29% -32% -24% -28% -26% -20% -18% -17%
Pharma retail trade, volumes (mio units) 132.4 143.9 141.5 122.6 124.5 118.4 119.5 122.5 126.7 130.2 129.0 136.4 133.6
Retail sales in volumes growth, % y-o-y -21% -15% -21% -20% -11% -9% -10% -8% -11% -5% -4% -5% 1%
WACP, USD 1.95 1.81 1.24 1.41 1.47 1.52 1.48 1.45 1.52 1.58 1.52 1.56 1.49
WACP growth, % y-o-y -21% -22% -40% -27% -23% -21% -23% -18% -19% -22% -18% -14% -23%
CPI of Ukraine 128.5 134.5 145.8 160.9 158.4 157.5 155.3 152.8 151.9 146.4 138.1 134.6 131.9
Pharma products CPI 149.2 155.5 170.3 164.7 159.5 153.5 151.8 149.4 145.8 142.1 146.6 143.3 140.3
Local companies share, values, % 38.7 38.5 39.6 40.7 41.5 41.7 41.8 41.4 41.4 41.4 41.7 40.9 42.3
Local companies share, volumes, % 74.9 75.2 77.1 77.6 77.6 77.9 78.4 78.2 76.5 75.7 75.8 76.7 75.6
MACROECONOMIC ENVIRONMENT
Description of the indicators:
Macroeconomic Indicators
GDP (Gross Domestic Product) is an aggregate measure of production equal to the sum of the gross
values added of all resident, institutional units engaged in production (plus any taxes, and minus
any subsidies, on products not included in the value of their outputs) calculated in current prices.
Converted from UAH to USD in accordance with an average official NBU exchange rate in the
corresponding period. Hereinafter: excluding the temporarily occupied territory of the Autonomous
Republic of Crimea and City of Sevastopol, as well as the part of zone of the antiterrorist operation.
Source: State Statistics Service of Ukraine.
Export of goods is a sale of goods by Ukrainian subjects of foreign economic activities to foreign
subjects of foreign economic activities (including non-cash payment) with or without exportation
of these goods through the customs border of Ukraine, including the re-export of goods. Initially
calculated in USD. Source: State Statistics Service of Ukraine.
Import of goods is a purchase (including non-cash payment) of goods by Ukrainian subjects of foreign
economic activities in foreign subjects of economic activities with or without the importation of these
goods into the territory of Ukraine, including the purchase of goods for domestic consumption by
establishments and organizations of Ukraine located abroad. Initially calculated in USD. Source: State
Statistics Service of Ukraine.
Industrial production sales is the value of industrial goods, which are actually shipped in the period, as
indicated in documents decorated as the basis for calculating with the buyer (customer), regardless of
income payments for them. Converted from UAH to USD in accordance with an average official NBU
exchange rate in the corresponding period. Source: State Statistics Service of Ukraine.
Retail turnover of enterprises is the value of consumer goods sold via retail trade and restaurants to
the population by all operating enterprises. It also includes direct retail sales by industrial, transport
and other non-trade enterprises. In addition, retail turnover includes retail sales of food products to
departments, organizations and enterprises to provide meals to the people they serve (at sanatoria,
children’s care institutions, hospitals, etc.). Reflected in current prices. Converted from UAH to USD
in accordance with an average official NBU exchange rate in the corresponding period. Source: State
Unemployment rate is a ratio (percent) of the unemployed registered at the State Employment Service
to the average annual population of working age. Source: State Statistics Service of Ukraine.
Average salary is an average value of remuneration in cash and in kind paid to employees for time
worked or work done. Converted from UAH to USD in accordance with an average official NBU
exchange rate in the corresponding period. Source: State Statistics Service of Ukraine.
Official currency exchange rate is the rate established by the National Bank of Ukraine under which
Ukrainian national currency – UAH (Ukrainian hryvnia) will be exchanged for foreign currency (USD or
EUR). Calculated as average value in the corresponding period. Source: National Bank of Ukraine.
Pharmaceutical Industry Indicators
Export of pharma products is an export of goods related to the group “Pharmaceutical products” under
the Ukrainian Classification of Goods for Foreign Economic Activities. Initially calculated in USD.
Import of pharma products is an import of goods related to the group “Pharmaceutical products” under
the Ukrainian Classification of Goods for Foreign Economic Activities. Initially calculated in USD.
Pharma retail sales are retail sales of different product categories of “pharmacy basket” (drugs,
medical devices, cosmetics and food supplements) in values and volumes. Converted from UAH to
USD in accordance with an average official NBU exchange rate in the corresponding period. Source:
Morion.
WACP (Weighted average cost of a pack) is a ratio of pharma retail sales in values to pharma retail
sales in volumes.
CPI (Consumer price index) is an indicator of changes at the time of prices and tariffs for commodities
and services being purchased by the population for unproductive consumption calculated to
corresponding month of previous year. Source: State Statistics Service of Ukraine.
Pharma products CPI is a Consumer price index of “Pharmaceutical products, medical products,
appliances and equipment” group calculated to corresponding month of previous year. Source: State
Local companies share is the share (percent) of sales related to Ukrainian companies in overall pharma
retail sales in values and volumes. Source: Morion
Table: Key macroeconomic indicators
in Ukraine
(Jan 2015-Jan 2016)

KEY ECONOMIC EVENTS
»» On Feb 3, the Minister of Economic Development of Ukraine Aivaras Abromavicius announced his decision to
resign due to the blocking of systematic and important reforms in Ukraine from the side of pro-government
forces. Subsequently, political crisis in Ukraine deteriorated and on 17/02/2016, the Parliament abortively voted
for the Yatseniuk’s Cabinet of Ministers dismissal. However, the future of the parliamentary coalition and the
government is not clear yet.
»» The IMF may stop its funding program in Ukraine, if reforms and corruption fight do not accelerate, Christine
Lagarde stated. “Ukraine risks a return to the pattern of failed economic policies that has plagued its recent
history,” she said. Ukraine was expected to receive up to USD 5.8 bn in 2016, 1.7 bn was scheduled for February.
»» In 2015, public debt of Ukraine fell 6.2% to USD 65.5 bn or 81.5% of GDP.
»» The National Bank of Ukraine expects the consumer inflation to slow down to 12% by the end of 2016. The Bank
also projects inflation to be at the level of 8% by the end of 2017.
»» Capital investment in Ukraine decreased by 1.7% y-o-y in 2015, whereas in the 9M2015 the decline amounted
to 6% y-o-y. In 2014, the decline amounted 24.1% y-o-y.
»» Economy Ministry forecasts 1% (± 0.5%) y-o-y rise in Ukraine’s GDP in 1H2016. According to preliminary data, in
2015, GDP in Ukraine fell by about 10% y-o-y.
»» Ukraine’s Minister of Foreign Affairs Pavlo Klimkin has proposed establishing a working group on the development
of freight traffic on the so-called new Silk Road.
»» Ukraine diminished its exports to Central Asia and Caucasus by 60-80% due to Russia’s embargo, the Deputy
Economy Minister reported. The regions accounted for 3.1% of Ukraine’s total exports in 2015.
»» In Jan the industrial output in Ukraine fell by 1.7% y-o-y.
»» According to the World Bank’s expert, the restoration of Donbas would require about USD 1.5 bn. At present, the
State Agency for the restoration of Donbas has USD 300 mio.
239.8
177.0
197.6
180.0
193.0
177.7
172.6
177.1
193.2
206.3
196.6
212.3
198.9
132.4
143.9
141.5
122.6
124.5
118.4
119.5
122.5
126.7
130.2 129.0
136.4
133.6
100
110
120
130
140
150
160
100
120
140
160
180
200
220
240
260
Pharma retail sales
Values (mio USD) & Volumes (mio units)
Jan 2015-Jan 2016
mio USD mio units
2015 2016
11.79 12.05
13.37 13.46 13.00
15.36
13.85
9.01
13.75
12.20
11.70
15.77
8.31
90.2
114.5
103.4 103.7
84.3
115.0
106.6
93.3
122.2
147.1
141.3
142.1
103.7
20
40
60
80
100
120
140
160
0
2
4
6
8
10
12
14
16
18
Ukrainian Internation trade in pharma
production
Export & Import, mio USD
Jan 2015-Jan 2016
Export Import
2015 2016
6.01
4.56
5.51
5.91
5.65 5.80 5.71
5.43
5.72
6.29
5.92
6.37
4.93
1.97
1.44 1.61 1.66
1.94
1.83
1.94 1.88 1.86
2.04
1.80
2.01
1.60
0.0
0.5
1.0
1.5
2.0
2.5
3.0
0
1
2
3
4
5
6
7
Industrial production sales &
Retail turnover of enterprises surplus
Jan 2015-Jan 2016, bn USD
Industrial production sales Retail turnover of enterprises
2015 2016
15.81
24.48
23.26 22.71
20.92 21.23 21.76 21.63 21.78 21.8
23.3 23.4 24.319.26
28.95 29.52
26.92
25.48 24.91
26.09 25.91 26.14
24.6 25.1 25.4 26.3128.5
134.5
145.8
160.9 158.4 157.5 155.3 152.8 151.9
146.4 146.6 143.3 140.3
0
20
40
60
80
100
120
140
160
180
0
5
10
15
20
25
30
35
OFFICIAL CURRENCY EXCHANGE RATE
+Consumer Price Index
Jan 2015-Jan 2016
UAH/USD UAH/EUR CPI of Ukraine
2015 2016

MARKET & COMPANIES NEWS
“Indar” joined
“Manufactures
of medications of
Ukraine” Association
The main Ukrainian insulin
producer “Indar” has joined
“Manufacturers of medication of
Ukraine” Association. The other
members of the Association are
“Farmak”, “BCPP”, “Interchem”,
“YuriaPharm” and “Kusum Pharm”.
The consolidations of interest
of two biggest local insulin
producers (“Indar” and “Farmak”)
will benefit both of them as well
as all members of the Association,
the Director of the Association
said.
“Manufactures of medications
of Ukraine” Association was
established in 2010 to create
conditions for the most effective
cooperation between its members
and protect their interests.
Ukrainian market
remains essential
for Indian
pharmaceutical companies
The Deputy Minister of chemicals
and fertilizers of India Sudhansh
Pant considers Ukraine as a
very significant market for Indian
companies.
“Ukraine’s market remains
prospective despite the trade
turnover in USD was declining
over the last years,” Mr. Pant
noted. “However, we are working
to bring the trade indicators at
the level, which was few years
ago.”
Mr. Pant has also indicated the
possibilities of implementation of
projects on drugs manufacturing
localization at the facilities
of Ukrainian pharmaceutical
producers.
“Microkhim” launches
Aspriks
“Microkhim” launches
Aspriks (ketorolac)
spray, which is used for the
relief of acute pain syndrome of
various origins. Aspriks is the
only ketorolac drug available in
Ukrainian market today.
“Microkhim” was 16th Ukrainian
producer on Ukrainian market
in 2014. The main product
segments for the company
are nervous system and
cardiovascular system. Aspriks
has become the first company’s
drug for musculoskeletal system.
In 2015 Gedeon
Richter’s performance
in Ukraine worsened
significantly
According to consolidated report
on Redeon Richter’s results in
2015, the company’s sales in
Ukraine has fallen by 51.5% y-o-y
(from EUR 55.3 mio to EUR 26.8
mio). The company implemented
a more strict receivables
control and voluntary shipment
restrictions as a reaction to the
recent political turmoil and the
deepening economic decline in
Ukraine, which have characterized
the country since the beginning of
2014. The company also explains
poor results with the devaluation
of the Ukraine’s national currency
and decline in customers’
purchasing power.
Generally, in the CIS region, the
Gedeon Richter decreased its
indicators by 10.1% y-o-y with
5.9% y-o-y cut in Russia. The
total Gedeon Richter’s sales in
2015 increased by 2.9% y-o-y to
EUR 1.18 bn.
“Biofarma” will invest
about USD 12 mio in its
development in 2016
Ukraine’s leading producer of
donor blood-made preparations
“Biofarma” plans to remain the
amount of investments in 2016
at the level of 2015 (USD 12
mio). In 2015, the company spent
USD 5 mio for the construction
department of probiotics, USD
3 mio – for the reconstruction
of Sumy station for blood
transfusion and USD 2 mio – for
the development of new drugs.
The company also intends to
restore the institution of human
donors to produce the feedstock
for the production of blood
products on the base of Sumy
station for blood transfusion.
The Director of “Biofarma”
Konstantin Efimenko stressed
that blood drugs are in priority
for the company’s further
development. According to Mr.
Efimenko, in 2015 “Biofarma”
increased its incomes by 45%,
while blood drugs contributed
40% of sales.
Previously, in 2014, “Biofarma”
has built a new plant in Bila
Tserkva (Kyiv Region) for USD
42 mio. The company now
produces 20 immunobiological
drugs from donor blood as well
as drugs obtained with the use of
recombinant DNA technology and
probiotics.
“Fitofarm” reports 6x
decline in its net profit
in 2015
In 2015 “Fitofarm’s”
net profit has decreased 6.12
times y-o-y to UAH 1.81 mio.
The company’s shareholders will
discuss the financial performance,
stuff issues, the issue of changing
the location of the plant, etc.
at the meeting appointed on
04/04/2016. “Fitofarm’s”
production facilities is located in
Artemivsk (Donetsk Region, the
ATO zone).

The company manufactures more
than 80 herbal and synthetic
drugs, including Eroton, its best-
selling drug against erectile
dysfunction.
The shareholders will also
consider the private placement of
unsecured bonds of the company.
“Fitofarm” is predominately owned
(99.84%) by Miraphytos Holding
Ltd. (Cyprus).
“Farmak” has
doubled its net
profit in 2015
“Farmak’s” net profit in 2015
has increased by 96.9% y-o-y
to UAH 407.3 mio. In 2014, the
company had a 29.7% decline. On
24/02/2015, the Supervisory
Board appointed Antonina
Zubkova instead of Pavlo
Zhebrivskiy as the Board’s Head.
The company plans to reach USD
1 bn sales amounts by 2020 by
expanding activity at external
markets.
In Feb, “Farmak” acquired Polish
company KWW Kotkowski
Wierzbicki Wegrzyn sp. z o.o.
engaged in marketing and supply
of biologically active additives
at the local market. “Acquisition
of marketing company if Poland
will allow to take a big step in
the implementation of the export
policy,” the CEO of “Farmak” Filya
Zhebrivska said.
REGULATORY UPDATES
Adjustment of Mailing Procedures
for Tax Assessment Notice
Ministry of Finance of Ukraine
Order #1204 as of December
28, 2015, entered into force
on February 16. This Order
updates the mailing procedures
for tax assessment notices to be
sent to taxpayers by regulatory
authorities.
The regulatory body develops a
notice of tax assessment in the
following cases:
»» If a taxpayer fails to submit his
tax (customs) declaration in a
timely manner, and during tax
control it has been determined
that the taxpayer conducted
business activities, which
appeared to be taxable and
created indexes subject to
declaration;
»» If the taxpayers inspection
results (except electronic
inspection) show that the
taxpayer underestimated or
overestimated his tax liabilities,
credits, tax refunds and/
or overstated the negative
value of taxable profits tax or
negative value of the taxpayer’s
VAT amount declared in tax
(customs) declarations, refining
calculations;
»» If customs inspection results
received upon the termination
of customs clearance and
release of the goods show that
the taxpayer underestimated
or overestimated his tax
liabilities declared in customs
declarations;
»» other cases provided by law.
Notice of tax assessment is
developed for each separate tax
due together with the penalties,
as well as for each penalty
and poena for the violation of
other legislation being under
supervision of regulatory
authorities.
Tax assessment notice should
be provided together with the
calculation of tax due, decrease
(increase) of tax liability amount
and/or tax credit, and/or budget-
funded VAT refund, and/or
decrease of negative value of
taxable profits tax or negative
value of VAT amount, penalty
and poena, stating the date and
reference number of declaration
(refining calculation), report for
the relevant reporting period.
considered to be submitted to
the taxpayer – legal entity if such
assessment notice is delivered
by hand to the official employee
of such taxpayer against
acknowledgement or forwarded
in a letter with notification of the
delivery.
considered to be submitted to
the taxpayer – individual if such
assessment notice is delivered
by hand to such individual or
his authorized representative
or forwarded in a letter with
notification of the delivery to the
address of residence or of the
latest known location of such
individual.
Provided by

Ukraine’s Law “On Public
Procurement” Has Come Into
Force
As a general rule, the Law applies,
provided that the purchase price
of the subject good (goods),
service (s) is equal to or greater
than 200 000 hryvnias, and
the price of the work is equal or
greater than 1.5 million hryvnias.
At the same time, the Law
provides a number of cases to
which the provisions of the latter
do not apply.
The new Law provides for
the implementation of public
procurement with the use of
two competitive regulatory
procedures: open tendering and
competitive dialogue, as well as
a non-competitive procedure
- negotiating the purchase
procedure.
An important innovation of
the Law is the introduction
of electronic procurement
(e-auction), the electronic
review system, as well as the
implementation of the exchange
of information, documents, to
provide clarifications in the
e-procurement system.
The main objectives are defined
by the Law to be , in particular,
increased levels of competition in
public procurement, to promote
transparency of the use of budget
funds and the implementation
of the Association Agreement in
concern to the implementation of
EU directives.
The law comes into force from
April 01, 2016 for the central
executive authorities and
customers operating in specific
areas of management; August 01,
2016 for all other customers.
Accordingly, the Law of Ukraine
“On the Implementation of Public
Procurement” will lose force from
1 August 2016.
The Basis for the Imposition of
Fines for the Violation of Labour
Laws has Been Established
The Cabinet of Ministers of
Ukraine amended the Procedure
of implementing fines for the
violation of the labour and
employment legislation with
decree No 55 dating from
03.02.2016.
The bases for the imposition of a
fine are as follows:
»» performs work without an
employment contract, and the
establishment of a period of
work or working part-time in the
case of actually doing the job
full-time, set at the enterprise,
institution or organization;
»» an act concerning the detection
during the audit of a business
entity or employer of a violation
of the labor legislation and / or
employment, drawn up by an
official or territorial authority of
Gostrud (State Labour Office).
In addition, unpaid voluntary fines
are collected:
judicially by regional centers
of employment on the basis of
the case file transmitted by the
territorial bodies Gostruda
judicially by the territorial
authorities of the Gostrud (State
Labour Office)
authorities of the State Executive
Service
The document will come into force
on the day of its publication.
Rules for Keeping VAT Recovery
Register Entered Into Force
Resolution of the Cabinet of
Ministers of Ukraine № 68 as of
22.02.2016 “On Approval of
Rules for Keeping the Recovery
Value Added Tax Register”
entered into force on February
23.
The Registers of VAT Recovery
are developed by the State Fiscal
Service in accordance with the
following data:
»» Declarations and refining VAT
calculations and applications
submitted as a part of
tax statements or refining
calculations accepted by the
State Fiscal Service of Ukraine
at the local level;
»» Tax information collected and
received by fiscal authorities.
The date of application inclusion
into the register is considered to
be the date of provision of the
following:
»» Declaration for the reporting
period in case the application
is submitted within its contents;
»» Refining calculation in case the
application is submitted within
its contents;
»» Declarations with violation of
the deadlines for submission
for the reporting period in case
the application is submitted
within its contents.
The registers are published at
the official State Fiscal Service’s
web-site on a daily basis.
Information Concerning Clinical
Trials Shall Become Open to the
Public
On the 16th of February a draft
legislation of Regulation № 4074
“On Amendments Concerning
the Law of Ukraine “On Medicinal
Products” (concerning the access
to materials on pre clinical studies
and clinical trials)(hereinafter-
draft legislation) was registered in
the Verkhovna Rada.
The abovementioned draft
legislation proposes the
disclosure of information
contained in the materials of the
pre clinical studies and the clinical
trials that are attached to the
application for the registration of
the medicinal product. Relevant
amendments have been foreseen
to article 9 of the special Law.
In the opinion of the legislation
draft’s initiators, the closed
nature of such data results in
the circulation of drugs, whose
effectiveness and safety have
not been proved. Therefore
the draft legislation at hand is
aimed at initiating access to such
information, which will enable
all interested citizens, their
associations and professionals to
decide on the selection for the
appointment and the medical use

HEALTHCARE NEWS
The Minister of Healthcare
withdrew his resignation letter
On Feb 4, the Minister of
Healthcare of Ukraine Alexander
Kvitashvili has withdrew his
letter of resignation together
with three other Ministers, who’s
resignation decisions followed
the statements of Minister
of Economic Development of
Ukraine Aivaras Abromavicius,
who had resigned shortly before
due to the interventions into the
Ministry’s work from the Deputies
of pro-government parties. The
Ministers agreed to not leave
their positions in exchange for the
adherence to following principles:
inadmissibility of pressure
from political parties, maximum
government transparency,
fair wages for civil servants,
transparent public procurement,
etc.
Unlike the other Ministers, Mr.
Kvitashvili had submitted his
resignation letter on Jul 2, 2015,
but the decision on his dismissal
was not approved by the
Parliament.
The new Draft Law “On Drugs” to
be submitted to the Parliament
until the mid-March
The members of Public Health
Committee of the Ukrainian
Parliament made a decision to
form a working group, which
revises the previous versions of
the Draft Law “On Drugs” and
develops a new version of it,
which is to be submitted to the
voting until Mar 16. Previously,
the Parliament had registered
the Draft Law “On Drugs” #2162
(form the Deputy A. Shypko)
and #2162-1 (from the Deputy
Oleg Musiy). Moreover, the
Deputy Head of the Public Health
Committee Iryna Sysoenko
provided the new Draft Law “On
Drugs” considering the WHO
recommendations. The working
group is expected to develop the
unified version of the Draft Law
based on those three versions.
The government intends to create
the State insurance company
The Cabinet of Ministers of
Ukraine plans to establish the
State insurance company within
the medical reform, the PM said.
“We want to develop a mechanism
of state insurance medicine,
which is to cover medical costs of
Ukrainians, Mr. Yatsenyuk noted.
“The government has to provide
emergency care and basic level
of health care provision. Medical
insurance system will help this
field to develop.”
The IMF proposes Ukraine to
cancel the preferential VAT on
drugs
On Feb 8, the IMF published the
Technical Assistance Report
on Ukraine containing the list
of recommendations from the
Fund’s experts. Among the
main recommendations was
to increase the VAT rate from
20% to 21% and cancel the
preferential taxation of drugs
(7%). The Professional Pharmacy
Association of Ukraine spoke
against implementation of the
recommendations saying the
14% increase in the VAT tax
rate will double the prices on
drugs as producers, distributors
and retailers are all forced to
introduce their markups on drugs.
During the 2H2015, Ukrainian
government was intending
to introduce the 20% VAT on
drugs, but the pharmaceutical
community has defended the
preferential rate. In addition,
since Jan 1, 2016, drugs are not
subject to 5% customs duties.
The MOH started the development
of the National policy on drugs
provision in collaboration with the
of the medicinal products on the
basis of objective data concerning
the level of proof on their safety
and effectiveness.
As of today, the draft legislation
has been submitted to the
Ministers of Parliament for review.
See all news on regulatory
updates on the Legal Alliance
website.

WHO
On Feb 10, the European Mission
of the WHO held a consultative
and methodological meeting with
the working groups engaged in
the development of the National
policy on drugs provision,
which is aiming to increase the
accessibility of drugs. Scientific
and coaching session was headed
by the Programme Manager
for Health Technologies and
Pharmaceutical of the WHO
Regional Office for Europe Hanne
Bak Pedersen.
Mrs. Pedersen indicated the key
tasks within the development of
the policy:
establishing of effective and
transparent procurement of drugs
for public funds;
improving access to drugs and
medical devises through effective
regulation in accordance with the
WHO recommendations;
implementation of the
strategic long-term planning of
procurement of vaccines and vital
drugs;
The development of the National
policy on drugs provision was
started on 25 Jan 2016.
AIMP Ukraine and EBA called
the government to terminate
destabilization of the State Expert
Center
Association of international
Pharmaceutical Manufacturers
of Ukraine and the European
Business Association appealed
Ukraine’s key officials asking
to take immediate action
to terminate permanent
destabilization of the SE “State
Expert Center of the MOH of
Ukraine” after on 12/02/2016
the servants of the Security
Service of Ukraine had
conducted the search in the
Center and blocked its activity.
In 2015, such searches have
already been conducted in the
Center, as law enforcement
authorities suspected its
officials in corruption. The
associations stated that such
actions complicate the Center’s
performance and destabilize
the situation concerning drugs
registration.

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Upharmacia - Ukrainian Pharma Market News Digest. February 2016

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Upharmacia - Ukrainian Pharma Market News Digest. February 2016