Funding of Russian manufacturers of medical devices

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What kind of activities are the subject of State funding programs

The State funding program is regulated by Rules for the Provision of funding from the federal budget for Russia-based organizations as amended by a Government Order dated 30 December, 2022. According to the aforementioned document, funding may be provided for the following types of projects:

Various actions and processes, limited in time and resources, which are implemented or executed by the manufacturing organization (also with the possible involvement of third parties), aimed for execution of the following tasks:

  • creation
  • expansion
  • modernization

of industrial scale manufacturing of a medical device included in the strategical direction of an activity list, including the following:

  • execution of research and design tasks (development of design and specifications documentation and organization of pilot scale manufacturing);
  • combination of technical and/or clinical trials and tests of this medical device, its marketing authorization and/or certification;
  • achievement of the result associated with funding and performance indices necessary to achieve the aforementioned results;

The result associated with funding is the outcome of funding, in other words, it means the support of project implementation and provision of competitive products as the final goal.

Performance indices necessary to achieve the outcomes of funding are research costs, costs of development regardless of the source of funds (at the actual price at the time of funding), and amount of sales of the medical devices concerned (i.e. developed as the result of the project’s implementation).

Amendments to the Rules of funding as amended by Government Order dated 16 April, 2019

Implementation of new regulations resulted in the amendment of the list of specific types of medical devices subject to state funding. The list is completed jointly by Minzdrav and Minpromtorg. The list shall be provided by Minzdrav to Minprom not later than 10 February, 2022. The list will be published together with the tender announcement on the website of the Ministry of Industry and Trade of the Russian Federation before 1 April, 2022, in accordance with the Rules for the provision of funding from the federal budget. The announcement shall also contain all the necessary information regarding the deadlines for tendering, application submission deadlines, amount of funds provided, necessary documentation, strategic directions etc.

Minzrdav will determine the specific nomenclature and specifications of the medical devices concerned, while Minpromtorg, based on the proposals provided by Minzdrav, will set up the deadlines for the project’s implementation for the development and manufacturing of innovative medical equipment or related supplies.

The interdisciplinary committee at the Ministry of Industry will review and approve the lists of strategic directions on a yearly basis. For each of those directions the committee shall also establish minimum criteria for project performance and the maximum amount of funding for each project and for the direction in total.

How the new rules are working

  1. The funding is provided to the companies which, on the basis of the tendering results, had demonstrated the best performance indices in each of the strategic directions of actions.
  2. The maximum period of funding is three calendar years (starting from the first year of provision).
  3. The manufacturers may expect up to 50% of their R&D costs to be reimbursed from the federal budget.

The costs borne by the manufacturer may include the amounts for salary and other similar payments to employees, insurance fees, cost of materials, overhead charges apart from petty cash, payments for the services of third parties, etc.

The list of strategic directions of actions existed before the Government Order dated 28 January, 2021

In order to give you a preliminary understanding of what may be the list of strategic directions, let’s look at the list which was in existence as per 1 January, 2020.

So this is how the previous list was looking like:

A) development and organization of the manufacturing of medical devices related to orthopedics, traumatology and prosthetics;

B) development and organization of the manufacturing of test systems for in vitro diagnostics and cancer screening;

C) development and organization of the manufacturing of test systems for in vitro diagnostics and CVD screening;

D) development and organization of the manufacturing of medical devices for diagnostic visualization;

E) development and organization of the manufacturing of medical devices for nuclear medicine;

F) development and organization of the manufacturing of medical devices for surgical interventions;

G) development and organization of the manufacturing of suture materials;

H) development and organization of the manufacturing of medical devices intended for hi-tech assistance and care for patients with impaired sensory systems functions;

I) development and organization of the manufacturing of medical devices and the technical means of rehabilitation for the purposes of recovery and restorative medicine;

J) development and organization of the manufacturing of medical devices for other suitable purposes, including delivery systems.

List of strategic directions of actions related to the pharmacological manufacturing

Development and organization of the manufacturing of the following nomenclature:

A) hormone-based drugs;

B) biomedical cell-based product (BCBP);

C) antibiotics;

D) vaccines;

E) drugs used for treatment of pain syndrome and cancer in adolescents, orphan drugs, radiopharmaceuticals etc.

Requirements for the manufacturing organization necessary for participation in the tender

In order to take part in the tender, the manufacturing organization has to fulfil the following requirements no later than 15 days before submission of the application (as per Order dated 16 April, 2019):

A) No outstanding payments to the budget such as taxes, fees, insurance fees, penalties, duties or interest payments.

B) No outstanding payments for budget returns such as the funding amount, investments from the budget, including those provided on the basis of other legal acts, and in general any other outstanding or non-settled payments (debts) intended for the Russian Federation.

C) The organization must not be under any rearrangement process (except as merger with a manufacturing organization of any other legal entity), or liquidation, or under bankruptcy proceedings, or shall not have its operations suspended as per the procedure set forth in the applicable legislation of Russian Federation.

D) The organization is not a foreign legal entity, or a Russia-based legal entity for which more than 50% of the charter capital belongs to foreign legal entities registered within the state or territory included in those approved by the list of the Ministry of Finance of the Russian Federation of territories providing preferential taxation and (or) refraining form disclosure of information associated with financial operations (so called off-shore zones).

E) The organisation shall not receive any funds from the federal budget on the basis of any other relevant legal act of the Russian Federation with the purpose of funding the same project.

F) The organisation provides statistics as per the N-1-medizdelia Federal Statistics Survey form “Information about the production, dispatch and prices for medicinal drugs”.

G) The name of the director, members of the executive board, the person exercising executive power within the manufacturing organization, or the name of the Chief Accountant Officer (if any) are not listed in the Register of Disqualified Persons.

What are the documents necessary for the tender application

As per the Order dated 16 April, 2019, the following documents shall be submitted to Minprom:

A) the tender application, signed by the Director of the organization;

B) a certificate issued by the tax authorities no earlier than 15 days before the application submission date stating that the applicant has no outstanding payment issues towards the budget such as taxes, fees, insurance fees, duties, interest payments;

C) a certificate signed by the director and CAO (if applicable) of the organization, or by any other duly authorized member of the organization’s personnel responsible for accounting and confirming compliance with the requirements set forth in sub paragraphs B to E and H of paragraph 16 of these Rules;

E) a copy of the letter confirming submission of the statistical information according to the form N-1-medizdelia “Information regarding the release and dispatch of medical devices (medical equipment and devices of medical designation)” for the year preceding the year of application;

F) information regarding any active rights owned by the organization with regard to any relevant technology, including techniques, know-how and patents, rights to designs and technical documentation for manufacturing and design, refurbishment and development of competitive medical devices on the territory of the Russian Federation (if applicable);

G) approval for the publication of information related to the manufacturing organization on the Internet, including also information about the related tender application, as well as any other information pertaining to the manufacturing organization, and consent for the processing of personal data of individuals authorized by the manufacturing organization for communications with the Ministry of Industry and Trade of the Russian Federation during the tender (this shall be signed by the Director of the organization and by the persons authorized by the manufacturing organization for communications with the Ministry of Industry and Trade of the Russian Federation during the tender).

Detailed information is available in the official document.

References:

1. Pravila predostavleniya subsidij iz federal’nogo byudzheta rossijskim organizaciyam na finansovoe obespechenie chasti zatrat na realizaciyu proektov po razrabotke sovremennyh tekhnologij, organizacii proizvodstva i realizacii na ih osnove konkurentosposobnyh medicinskih izdelij / Kodeks [Electronic resource]. URL: https://docs.cntd.ru/document/563793036?marker=7DE0K8

2. Kubrina T. Pravitel’stvo snizilo limity subsidij na proizvodstvo otechestvennyh medizdelij [Electronic resource]. 2022. URL: https://pharmvestnik.ru/content/news/Pravitelstvo-snizilo-limity-subsidii-na-proizvodstvo-otechestvennyh-medizdelii.html

3. Normativnye pravovye akty – Oficial’nyj sajt dlya razmeshcheniya informacii o podgotovke normativnyh pravovyh aktov i rezul’tatah ih obsuzhdeniya [Electronic resource]. URL: https://regulation.gov.ru/projects?fbclid=IwAR2uqX9qzv_uWJ-yBFCWM-b-Fv84teSl5LB-ffMfb5b23watWFU4HsGTqW0#npa=91087

4. Pravitel’stvo RF v 2020 godu pomenyaet pravila subsidirovaniya proizvodstva lekarstv i medizdelij / VADEMECUM [Electronic resource]. URL: https://vademec.ru/news/2019/04/30/pravitelstvo-rf-v-2020-godu-pomenyaet-pravila-subsidirovaniya-proizvodstva-lekarstv-i-medizdeliy/

5. Postanovlenie Pravitel’stva RF ot 16 noyabrya 2019 g. N 1464 “Ob utverzhdenii Pravil predostavleniya subsidij iz federal’nogo byudzheta rossijskim organizaciyam na finansovoe obespechenie chasti zatrat na realizaciyu proektov po razrabotke sovremennyh tekhnologij, organizacii proizvodstva i realizacii na ih osnove konkurentosposobnyh lekarstvennyh preparatov i o priznanii utrativshimi silu nekotoryh aktov Pravitel’stva Rossijskoj Federacii” / Garant [Electronic resource]. URL: https://base.garant.ru/73030268/

 

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