New license provisions for production and sale of pharmaceuticals came into force on 29 December 2011

The Order of the Ministry of Health Care of Ukraine “On the approval of license provisions for business activity related to pharmaceuticals’ production and wholesale and retail sale” No.723 (the “Order No.723”) was adopted on 31 October 2011 and came into force yesterday – on 29 December 2011.

Please note that since 29 December 2011 the Order of the State Inspection on Pharmaceuticals Quality Control of the Ministry of Health Care of Ukraine of 21 September 2010 No.340 “On the Approval of license provisions for business activity related to pharmaceuticals’ production and wholesale and retail sale” (the “Order No.340”) ceased to be in force. The Order No.723 establishes new qualification, organizational, technological and other requirements for business activity related to production of pharmaceuticals and their wholesale and retail sale. In general, however, the Order No.723 mainly repeats the provisions of the Order No.340.

New license provisions state, inter alia, the following:

• Wholesale trade in pharmaceuticals should be carried out in compliance with the applicable guidelines on good practice, as harmonized with European Union legislation;

• The remote (via Internet) sale of medicine is forbidden, as is sale by mail and the sale through any institutions other than pharmacies and outside them (some exceptions to this rule are allowed);

• The licensee engaged in wholesale trade of pharmaceuticals, is obliged to ensure that the range of pharmaceuticals is sufficient to provide medical support to citizens and preventive treatment facilities and that the trade residue of pharmaceuticals is not less than the 10- day average volume of sales in monetary form (some exceptions to this rule are stated).

Business entities that received their licenses for the production, wholesale or retail trade of pharmaceuticals before the Order No.723 took effect are obliged to comply their activity with the new license provisions within six months, i.e. until July 2012.

Note that the Ministry of Health Care of Ukraine together with the Order No.723 approved the Procedure on control over compliance with the license provisions for business activity related to pharmaceuticals’ production and wholesale and retail sale (the Order No.724 of 31 October 2011), which takes force on the date of its official publication. According to informal sources the Order No.724 should be published today (30 December 2011).

We will keep you updated on the further course of events.