GDP Requires Written Selection Criteria for Suppliers and Recipients in a Pharma Company’s Commercial Policy
A distributor submits an application for cooperation with a manufacturer of an original drug. The response arrives two months later, with no explanation. Six months after that, an inquiry arrives from the Federal Antimonopoly Service (FAS) of Russia: why was it rejected, on what criteria, and who made the decision?
At this point it becomes clear that no written criteria exist. There are verbal agreements within the sales department, a discount grid «for insiders,» and a manager who resolves requests over the phone. For the regulator, this is a ready-made basis for a discrimination case; for the company, it is the start of proceedings that can drag on for months.
A commercial policy is no longer an internal document belonging strictly to the sales department. Today it is a tool that protects the company from FAS claims while shaping its reputation among distributors and pharmacy chains. Below we break down what antitrust legislation and Good Distribution Practice (GDP) rules specifically require from such a document, and what to do with a company’s current commercial policy right now.
How Partners Were Chosen in the Past
For a long time, selection criteria for counterparties remained informal. Decisions on cooperation with a distributor or pharmacy chain were made by the commercial director or a regional manager, often without a unified methodology. Companies relied on purchase volume, solvency, and personal relationships.
Distribution-quality requirements existed separately from commercial terms. The quality department checked licenses and warehouses; the sales department negotiated prices and payment terms. The two processes rarely met in a single document. A rejection could be explained to a partner in vague terms: «doesn’t fit our cooperation format» or «falls outside our current strategy.»
Disputes with rejected partners were handled case by case, usually through negotiation or a court of general jurisdiction under the specific contract at hand. Companies saw no systemic risk in this: the right to choose a counterparty was assumed to be an internal business matter. That held until the antitrust authority began systematically requesting written counterparty selection criteria from pharmaceutical manufacturers when reviewing complaints about refusals to supply. The absence of a formalized policy came to be read not as a paperwork gap, but as a sign of an arbitrary, potentially discriminatory approach to the market.
What Antitrust Legislation Demands Today
Article 10 of Federal Law No. 135-FZ dated 26 July 2006, «On Protection of Competition» (hereinafter, Law No. 135-FZ), prohibits an economic entity holding a dominant position from creating discriminatory conditions or obstructing other participants’ access to the market. The law contains no direct requirement to publish a commercial policy. In practice, however, a company holding a significant share of the market for a given drug must prove to the regulator that a rejection was based on objective, pre-disclosed criteria rather than one employee’s arbitrary decision.
The practical takeaway follows from this. A written commercial policy, accessible to partners, becomes the primary evidence of good faith in a FAS inspection. Verbal agreements provide no such proof.
The second source of requirements is the Good Distribution Practice rules of the Eurasian Economic Union (EAEU), approved by Decision of the Council of the Eurasian Economic Commission No. 80 dated 3 November 2016 (hereinafter, Decision No. 80, EAEU GDP). The document obliges distributors and manufacturers to evaluate and approve suppliers and recipients before starting cooperation, document that procedure, and review it periodically. When evaluating a supplier, Decision No. 80 requires attention to the supplier’s reputation, offers of atypically large batches, and pricing that deviates noticeably from market rates: such signals point to counterfeit risk in the supply chain.
A symmetric requirement runs the other way. A manufacturer or distributor must confirm that the recipient of the medicines (a pharmacy chain, medical organization, or another distributor) holds the relevant authorization, and must periodically re-confirm this using copies of licenses and open state registries. A commercial policy that covers only supplier requirements and stays silent on recipient checks closes off only half of the antitrust risk.
Technical Criteria to Include in the Policy
A pharma company’s commercial policy can no longer be limited to commercial terms. EAEU GDP directly ties a partner’s admission to cooperation to the state of its infrastructure, so selection criteria must include verifiable technical parameters for storage, transport, and personnel. For partners operating in the Russian market, one further national requirement is added: connection to the State Information System for Monitoring the Circulation of Medicines (GIS MDLP). EAEU GDP does not regulate this system, but without it, legal circulation of serialized medicines in Russia is not possible.
Table 1. Technical GDP criteria and supporting documentation
| Domain | What the commercial policy checks | Supporting document |
|---|---|---|
| Storage | Zones with temperature and humidity control, segregation of rejected product | Temperature-mapping protocols, monitoring logs |
| Transport | Validated transport, thermal containers for temperature-sensitive drugs | Equipment validation reports, service contracts |
| Traceability | Scanning of marking codes, data transmission to GIS MDLP | IT system description, test acceptance records |
| Personnel | Training for handling temperature-sensitive cargo, incident procedures | Training programs, completion logs |
A partner unable to confirm correct data transmission to this system automatically creates a risk, for the manufacturer, of unmarked product entering circulation, which is itself grounds for administrative liability on both sides of the deal.
The set of criteria need not be identical for every category of partner. A large wholesale distributor with its own cold-chain warehouse goes through a full check across all four areas in the table. A small pharmacy chain that only receives finished product is typically checked against a shorter list: license, storage conditions at the point of sale, and connection to the marking system. This gradation matches the risk-based approach of EAEU GDP and, at the same time, removes any claim that the commercial policy creates excessive, economically unjustified barriers for smaller partners.
Who Approves Partners, and Why It Isn’t the Sales Department
Decision No. 80 obliges the organization to appoint a Responsible Person vested with authority to implement and maintain the quality system. Their duties explicitly include approving suppliers and recipients, approving outsourced processes, ensuring self-inspections take place, and deciding on returned, recalled, or falsified product. In other words, it is this person, not the commercial director, who formally approves or rejects a counterparty’s candidacy.
The main condition for this to work in practice is the Responsible Person’s independence from the commercial function. If the head of sales is the one actually deciding whether to approve a partner, while the Responsible Person merely signs the paperwork, the company ends up with a commercial policy that looks correct on paper but will not hold up in practice: during a FAS inspection or a GDP audit, the gap between the declared process and the real distribution of authority surfaces quickly.
Logistics Providers Fall Within the Policy’s Scope Too
A separate set of criteria is needed for transport companies that carry medicines under an outsourcing contract. They do not need a pharmaceutical activity license. EAEU GDP nonetheless obliges the party ordering transport to confirm the contractor’s competence and check it before cooperation begins, not after the first temperature excursion. The commercial policy should include requirements for transport validation in both summer and winter conditions, driver training on temperature-sensitive cargo, and rules for approving subcontracting. Without these clauses, responsibility for the drug’s quality in transit formally stays with the manufacturer or distributor, even when a third party physically carried out the transport.
What Happens Without Written Criteria
The absence of a formalized commercial policy is not, by itself, a separate offense. It does significantly weaken the company’s position during an inspection. If FAS finds that a refusal to a partner created discriminatory conditions under Article 10 of Law No. 135-FZ, the antitrust authority may order the company to change its internal rules and remedy the effects of the violation. Further administrative liability under Article 14.31 of the Code of Administrative Offences of the Russian Federation, for abuse of a dominant position, can follow once the regulator’s decision has taken legal effect. A company with written, objective criteria has a real chance of closing the dispute at the inspection stage, before it escalates to a formal order.
Single Suppliers for Public Procurement and a Separate Set of Criteria
A third layer of requirements applies to companies seeking single-supplier status for state-needs medicine procurement. Government Decree No. 753 dated 16 May 2023 (hereinafter, Decree No. 753) took effect on 1 January 2024. It set criteria for such suppliers in procurement under the law on the contract system (Law No. 44-FZ) and the law on procurement by certain types of legal entities (Law No. 223-FZ). Among them: full-cycle manufacturing on the territory of EAEU member states, ownership of a patent on the active substance in Russia, and at least three years of supply experience under the contract system. Companies seeking this status must reflect these criteria in their own commercial policy and be able to document compliance.
Table 2. Commercial policy: before and now
| Parameter | Before | Now |
|---|---|---|
| Form of selection criteria | Verbal agreements, internal rules with no publication | Written commercial policy, accessible to partners |
| Grounds for refusal | General wording with no reference to a criterion | Reference to a specific clause of the commercial policy |
| Counterparty check | License and warehouse only | License, GDP audit, IT integration with GIS MDLP, supply history |
| Role of the Responsible Person | Formal sign-off | Approval and rejection of counterparties, authority to suspend cooperation |
| Single-supplier status | No formalized criteria | Substance patent, full-cycle production in the EAEU, three years of supply history under Decree No. 753 |
Four Antitrust Risk Zones
Certain terms of a commercial policy deserve particular attention, since the antitrust authority reads them as signs of discrimination whenever there is no economic justification behind them.
Territorial restrictions. Barring a distributor from selling outside an assigned region can be explained by logistics. Without a written cost-efficiency calculation, such a clause reads as market allocation.
Individual sales targets. Bonuses tied to personal targets that other partners in the same category cannot see create a discount structure that is opaque and hard to justify.
Collection of secondary-sales data. Requiring a partner to report stock levels and resale data without a separate service contract for it can be read as a tool for market coordination.
Tied sales. A condition requiring a partner to buy a scarce drug only together with a wide range of generics restricts partner choice and usually has no technical justification.
Each of these points is worth checking against the company’s current commercial policy, to confirm there is a written economic or technical rationale for it rather than simply an established sales-department habit.
A separate factor to account for is the transition period for building the EAEU’s unified pharmaceutical market. Council of the EEC Decision No. 96 dated 10 June 2022 (as amended) extended the temporary procedure for drug circulation, including registration under national rules, until 31 December 2027. This means a commercial policy will, for several more years, need to deal with partners whose portfolios are split: part registered under national rules, part already transferred to EAEU marketing authorizations. Selection criteria need to account for both registration paths without creating unjustified barriers for partners holding national authorizations.
The Refusal Appeal Procedure as Part of the Policy
Publishing selection criteria works at full strength only alongside a clear procedure for appealing a refusal. A commercial policy should specify a response deadline for a partner’s application, a contact point for a follow-up request, and a review period for an objection if a partner disagrees with a rejection. Such a procedure does not replace a complaint to FAS. It resolves part of the disputes at an early stage and shows the regulator that the company follows a process rather than acting on an ad hoc basis.
Action Plan
Bring existing partner selection criteria together into a single document. Go through the sales department, the quality department, and the legal department, and write down every informal rule currently used to decide on cooperation.
Split the criteria by partner type. Wholesale distributors need a warehouse and transport check, pharmacy chains need a license and a connection to the marking system, and logistics providers need transport validation and driver training.
Set out the Responsible Person’s role in writing. State in the job description their authority to approve and reject counterparties, and to suspend cooperation on discovering serious GDP breaches. Protect this authority from pressure by the commercial function, and confirm that the decision genuinely rests with this person, not with the head of sales.
Check the policy against the four antitrust risk zones. Remove territorial restrictions and individual bonus schemes that lack an objective basis, or prepare a written economic or technical justification for each one.
Publish the policy and set up a feedback channel. Post the document on the company website, state how to apply for cooperation, and add a pre-trial procedure for appealing a refusal. This lowers the risk of a FAS complaint and makes it noticeably easier to bring on new partners.
A company that formalizes and publishes its partner selection criteria gains more than protection from antitrust claims. It gains a predictable, manageable distribution network in which every participant knows the rules in advance and does not spend months trying to find out why it was rejected.
A commercial policy is worth revisiting at least once a year, and whenever antitrust enforcement practice or GDP requirements change materially. Regular review clears out wording that no longer matches how authority is actually distributed inside the company, and shows the regulator that the document is maintained, not a formality kept only for appearances.
Regulatory basis:
1. Decision of the Council of the Eurasian Economic Commission No. 96 dated 10 June 2022, «On Temporary Measures Establishing Specifics for the Circulation of Medicines for Medical Use» (as amended)
2. Federal Law No. 135-FZ dated 26 July 2006, «On Protection of Competition,» Article 10
3. Decision of the Council of the Eurasian Economic Commission No. 80 dated 3 November 2016, «On Approval of the Good Distribution Practice Rules within the Eurasian Economic Union»
4. Government Decree No. 753 dated 16 May 2023, «On Approval of the List of Criteria Applicable to Single Suppliers (Contractors, Executors) in Procurement of Medicines for Medical Use»