Price of medicine in Russia drops following prices in Poland and Hungary. Here is how it works.
A marketing authorization holder keeps a close watch not only on the ruble exchange rate, but also on the outcomes of procurement tenders in Budapest, Warsaw, and Madrid. If a foreign distributor agrees to a discount to win a large tender, the law obliges the holder to cut the maximum selling price in Russia too, even if logistics, customs clearance, and product identification marking inside the country haven’t gotten a single ruble cheaper.
This link is built into the design of price regulation for drugs on the Russian list of vital and essential drugs (hereinafter, ЖНВЛП). Formally, it’s called external reference pricing: the maximum price in Russia cannot exceed the minimum registered manufacturer price across eleven comparison countries. For the marketing authorization holder, this means regular monitoring of foreign markets and a duty to file for a price cut on its own, without a request from the regulator.
This dependency also runs the other way. When a price drop abroad threatens to make supplies to Russia unprofitable, a separate mechanism kicks in to revise the price upward. It’s built for cases where a manufacturer is ready to halt supplies over low profitability.
How the Price in Russia Is Tied to Markets in Eleven Countries
The state regulation of prices for ЖНВЛП is set out in Chapter 12 of Federal Law No. 61-FZ of 12 April 2010, «On the Circulation of Medicines» (hereinafter, Law No. 61-FZ). Part 3 of Article 61 lets the marketing authorization holder lower the registered price at any time, on its own application. Part 4 goes further and turns the right into a duty: the holder must file for a price cut if the foreign-currency price has fallen in the manufacturer’s country or in any country it supplies, or if the price of the reference drug has fallen for the corresponding generics and biosimilars.
It’s this second ground that makes the risk cascade. A price drop for an original drug in one comparison country triggers a review not only of that drug’s own price in Russia, but of every generic and biosimilar registered against that reference drug. A portfolio of five generics under one international nonproprietary name can lose value at once, because of a decision made outside Russia and without any Russian marketing authorization holder involved.
The minimum foreign price is calculated under the methodology approved by Government of the Russian Federation Decree No. 805 of 30 May 2025, «On approval of the methodology for calculating maximum selling prices of manufacturers for medicinal products included in the list of vital and essential drugs for medical use» (hereinafter, Decree No. 805, the Methodology). Annex No. 3 to the Methodology lists the comparison countries.
| № | Comparison country |
|---|---|
| 1 | Belgium |
| 2 | Hungary |
| 3 | Greece |
| 4 | Spain |
| 5 | Netherlands |
| 6 | Poland |
| 7 | Romania |
| 8 | Slovakia |
| 9 | Turkey |
| 10 | France |
| 11 | Czech Republic |
The baseline is the manufacturer’s minimum selling price regardless of production site, converted into rubles with customs clearance costs added. If a drug is sold in several of the eleven countries, the calculation uses the lowest of the registered prices there. The average price plays no role. One deeply discounted tender in any comparison country can set a new ceiling for the entire Russian market for that drug.
The logic makes sense from a budget standpoint. The state buys a large share of ЖНВЛП through compulsory health insurance and federal programs, so tying the price to the foreign minimum works as a tool for containing spending and guarding the Russian market against price discrimination by international manufacturers. The catch is that foreign discounts are often tied to local conditions, such as centralized procurement, high-volume state contracts, or temporary reimbursement schemes that may not exist in Russia. The marketing authorization holder inherits someone else’s price benchmark along with someone else’s economics, which don’t come with it.
Foreign-currency prices are converted using the Central Bank’s average exchange rate for the three calendar months before the application is filed. That averaging smooths out one-off currency swings, but not a sustained trend: if a comparison country’s currency keeps gaining against the ruble over a quarter, the ruble-equivalent minimum price falls, and filing for re-registration becomes mandatory regardless of what the holder intends.
Raising the price is far more restrictive than lowering it. Part 2 of Article 61 of Law No. 61-FZ allows an upward re-registration only once a calendar year, with the application due by 1 October. Even within that annual window, the new price still can’t exceed the minimum price among the comparison countries under the same Methodology, and the increase is further capped by the inflation forecast in the federal budget law for that year. The path down stays open at all times and must be used; the path up opens once a year and is capped hard by the foreign minimum.
For pharmacy retail, this model feels unfamiliar. In staple foods, retail markups fall because the chains themselves compete for customers: according to monitoring by the Association of Retail Companies, the markup stood at 6.11% in March 2024, 1.65 percentage points lower than a year earlier. A manufacturer of ЖНВЛП has no such market freedom. The price is fixed at entry through the state register, and a price drop abroad passes straight through to Russia via the mandatory filing, bypassing the usual market compensation through margin elsewhere in the supply chain.
What the Regulator Does When There Is No Room Left to Cut the Price
Government of the Russian Federation Decree No. 1771 of 31 October 2020, «On approval of specific features of state regulation of maximum selling prices of manufacturers for medicinal products included in the list of vital and essential drugs» (hereinafter, Decree No. 1771), sets out a separate procedure for cases of a shortage, or the risk of one, caused by pricing. These special provisions run through 1 September 2030.
The mechanism is triggered by market participants themselves. They send the Ministry of Health information about a shortage or the risk of one, and the ministry forwards it to Roszdravnadzor within 2 working days. Roszdravnadzor requests data from the holder on actual and planned supply volumes and prepares its opinion within 7 working days. That opinion on a shortage stays valid for 3 months, and the holder needs to file the full re-registration package within that window.
Two calculated indicators signal shortage risk. The first, the supply deviation index, compares the volume of the drug placed into circulation over 24 months with the volume the holder plans to supply over the next six months at the current price. If the planned volume lags the historical figure by more than 10%, that points to shortage risk.
The second, the demand coverage index, compares actual supply over six months with the healthcare system’s annual need for that international nonproprietary name. A shortfall of more than 5% works as an independent trigger on its own. For instance, if 120,000 packs entered circulation over 24 months, and the holder plans only 30,000 for the next six months at the current price, the drop exceeds the 10% threshold, and Roszdravnadzor can flag shortage risk at that stage, without waiting for the drug to actually disappear from pharmacy shelves.
Once it has the opinion, the holder files for price re-registration with a calculation and supporting documents within 2 working days. The Ministry of Health checks the package for completeness and forwards it to the Federal Antimonopoly Service (hereinafter, FAS) within 2 working days for economic analysis. FAS weighs the same comparison-country minimum prices as the standard Methodology, but sets them against the manufacturer’s real costs, and can approve a price above the foreign minimum if the cost structure supports it. FAS can refuse approval on three grounds: inaccurate information in the submitted documents, no response to an FAS request within the deadline, or economic groundlessness of the requested price based on the analysis.
The whole path from the shortage opinion to the Ministry’s order on the new price takes roughly 27 working days. That figure doesn’t include a possible 7-working-day extension when five or more applications arrive at once, and it doesn’t include the time the holder spends preparing the document package and its supporting calculations.
While the Decree No. 1771 procedure is still running, the old restriction still applies. Part 8 of Article 61 of Law No. 61-FZ bars selling or dispensing ЖНВЛП without a registered maximum price, or above the registered price. If a holder is late filing the mandatory reduction under Part 4 of Article 61, the old, higher price formally stays in force until re-registration goes through; the law doesn’t zero it out automatically. That doesn’t excuse the holder from filing on time, but it removes the risk of an instant sales freeze on the day a foreign price falls.
Standard re-registration versus re-registration under Decree No. 1771
| Parameter | Standard re-registration (Art. 61, Law No. 61-FZ) | Re-registration under Decree No. 1771 |
|---|---|---|
| Who initiates | The holder, on its own | Roszdravnadzor’s opinion on a shortage |
| Direction of price | Down, mandatory; up, once a year | Up, outside the annual limit |
| Economic basis | Calculation under the Decree No. 805 Methodology | FAS calculation weighing costs and foreign minimum prices |
| How long the new price holds | Until the next re-registration | 1 year, then a repeat FAS analysis |
| Approximate procedure length | Not set by law | About 27 working days |
A raised price doesn’t escape reference pricing for good. A year after the re-registration order, FAS checks it again against the minimum prices in the comparison countries. If the raised price exceeds the minimum in three or more of them, FAS orders it lowered, though never below the level that applied before the increase. The Decree No. 1771 mechanism works as a deferral of up to a year, not a permanent exit from external reference pricing, so holders should prepare their economic case for the second round of analysis early, well before FAS sends notice that a review is coming.
For the industry, that adds up to a predictable cycle: a year at a raised price that covers real production costs, then a new check against the same eleven countries. Companies that don’t prepare their case for the second round in advance risk a forced price cut right after the one-year order expires, even if their costs haven’t changed at all.
What to Do
Map your portfolio’s exposure to the comparison countries. For each drug on the ЖНВЛП list, work out how many of the eleven countries (Belgium, Hungary, Greece, Spain, Netherlands, Poland, Romania, Slovakia, Turkey, France, Czech Republic) it’s sold in, and what share of volume sits in countries with unstable state procurement. For generics, also track the price of the reference drug your own price depends on.
Track exchange rates over a rolling three-month window, not the deal date. That’s the exact window the Ministry of Health uses to recalculate the minimum price. A sustained rise in the ruble against a comparison country’s currency over a quarter triggers the duty to file for a price cut, before missing the deadline brings consequences.
Prepare the FAS package early, before a shortage opinion exists. Gather data on volumes placed into circulation over the last 24 months and your cost structure, including marking and logistics costs. Roszdravnadzor’s opinion is valid for only 3 months, and internal sign-off will eat into part of that window.
Calculate the supply deviation index and the demand coverage index every quarter. A drop in the first below minus 10%, or the second below minus 5%, is a reason to contact the Ministry of Health before shortage becomes a fact that needs emergency handling on a tight deadline.
Budget for a repeat FAS economic analysis a year after any price increase. If the minimum price among reference countries has fallen in that time, prepare your justification early so you don’t lose margin a second time right after the first increase took effect.
Decisions on localizing production in Russia hang on this mechanism too. A plant’s payback model built on today’s ЖНВЛП prices can fall apart within a year if a tender in the Czech Republic or Romania knocks the foreign minimum down by double digits. Manufacturers running a full cycle from active substance synthesis inside Russia find it easier to justify their cost structure to FAS than companies that depend on imported raw materials and currency swings across several jurisdictions at once.
Reference pricing will stay the main way to hold down state spending on ЖНВЛП for the foreseeable future, and the eleven comparison countries won’t change without a revision of the Methodology. But a marketing authorization holder does have a lawful way through a drop in foreign prices without stopping supply, provided it files the paperwork and justifies its costs before shortage becomes real on the pharmacy shelf.
Regulatory basis:
1. Federal Law No. 61-FZ of 12 April 2010, «On the Circulation of Medicines,» Article 61
2. Government of the Russian Federation Decree No. 805 of 30 May 2025, «On approval of the methodology for calculating maximum selling prices of manufacturers for medicinal products included in the list of vital and essential drugs for medical use»
3. Government of the Russian Federation Decree No. 462 of 8 April 2025, «On state regulation of prices for medicinal products included in the list of vital and essential drugs for medical use»
4. Government of the Russian Federation Decree No. 1771 of 31 October 2020, «On approval of specific features of state regulation of maximum selling prices of manufacturers for medicinal products included in the list of vital and essential drugs»