News Digest 02.09.2024 — 04.09.2024
Regulators
The Ministry of Finance has developed rules for participation in public procurement
The Ministry of Finance has developed a draft government resolution "On measures to provide national treatment when purchasing goods to meet state and municipal needs, purchasing goods by certain types of legal entities." The document is at the public discussion stage until September 9.
According to the document, it is proposed to establish:
- a ban on the purchase of a number of goods originating from foreign countries, works, services, respectively, performed, provided by foreign persons;
- preference is given to Russian goods and goods produced in the EAEU countries.
It will also be necessary to:
- provide a certificate of origin from an authorized body of an EAEU member state for medical clothing, non-woven surgical disposable sterile products, gauze, antiseptics and disinfectants for participation in public procurement;
- provide a certificate, an expert opinion from the Chamber of Commerce and Industry of the Russian Federation and data from a document on the compliance of the production of medical devices with GOST requirements for a group of medical devices that includes containers for donor blood, colostomy and urine bags;
- require a certificate of origin for a medicinal product in an EAEU country or a conclusion on the production of products in Russia, issued by the Ministry of Industry and Trade before July 1, 2024.
The draft resolution recognizes the following government acts as no longer in effect:
- Resolution No. 878 of July 10, 2019;
- Resolution No. 616 of April 30, 2020;
- Resolution No. 617 of 30.04.2020;
- Resolution No. 2013 of 03.12.2020;
- Resolution No. 925 of 16.09.2016;
- Resolution No. 832 of 22.08.2016;
- Resolution No. 1289 of 30.11.2015;
- Resolution No. 102 of 05.02.2015.
If approved, this resolution shall enter into force on 1 January 2025.
As follows from the explanatory note, the amendment was developed in connection with the adoption of Federal Law No. 318-FZ of 08.08.2024 "On Amendments to Certain Legislative Acts of the Russian Federation and Recognition of Certain Provisions of Legislative Acts of the Russian Federation as Invalid." We are talking about a law that proposes the optimization of the public procurement procedure. It will establish a uniform procedure for granting preferences to Russian-made goods. The document was developed by the Ministry of Finance.
Source: https://pharmvestnik.ru/content/news/Minfin-razrabotal-pravila-uchastiya-v-goszakupkah.html
Supreme Court (SC) of the Russian Federation: hand-held photoepilators are medical devices and should not be subject to VAT when imported into the Russian Federation
The Supreme Court (SC) of the Russian Federation has published a decision on the dispute between the Vnukovo Customs and Beauty Solutions LLC on the taxation of hand-held photoepilators imported into the country. At the moment, the import of "devices and devices used in medicine" declared under code 9018 of the commodity nomenclature of foreign economic activity (TN VED) is exempt from VAT. Customs representatives considered that epilators are not medical devices, since they can be used at home and they are classified as cosmetic household appliances, so they charged the company more than 9 million rubles in VAT. The Supreme Court found the customs claims illegal.
Customs officials insisted that the tax benefit should not be applied, since the technical documentation classifies the products as "cosmetic household appliances" and "does not have the characteristics of a professional device or a device used in the professional activities of doctors." The company appealed the decision to charge additional VAT, noting that the photoepilators are registered as medical devices.
The arbitration courts that considered the Beauty Solution claim came to the conclusion that the registration certificate only confirms the safety of the device, and in order to be exempt from VAT, the product must be "used only in professional practice" by doctors for diagnosis, prevention, treatment of disease or surgery. The hand-held photoepilator, as established in the arbitration, is used for "cosmetic procedures" at home without the participation of a practicing physician, so it cannot be classified as a medical device.
The Supreme Court panel, having considered the case, found the customs decision illegal and provided an explanation to lower courts on how to consider such disputes. In particular, according to the Supreme Court, when checking the classification, it is necessary to “establish the characteristics of the goods both in terms of their composition and functional features, and their purpose,” and then compare them with the text of the commodity item, taking into account the explanations.
Devices used in medicine include “a wide range of products,” so importers must provide evidence that the imported goods are used in medicine and are medical devices. The Supreme Court claimed that hand-held photoepilators had undergone state control and received a regulatory certificate, and the main function of the product was “the treatment of diseases associated with an increased amount of hair,” such as pseudofolliculitis, hypertrichosis, and hirsutism. The photoepilator can be used in special clinics and at home upon recommendation.
The Supreme Court panel ruled that o "the possibility of home use of the product does not in itself deprive it of the status of a medical product, since due to its properties and characteristics, the disputed product is subject to state control." The recommendations of the Board of the Eurasian Economic Commission stipulate that products for photoepilation may be classified as medical if they are intended by the manufacturer for use for these purposes. The Supreme Court of the Russian Federation also referred to this statement in its decision.
Thus, customs representatives were unable to confirm the existence of grounds for a different classification of the goods. At the same time, the importing company proved that the products are medical, thereby confirming the right to a VAT exemption.
In early August 2024, the Supreme Court of the Russian Federation also clarified the signs that indicate cartel collusion in tenders. Such signs may include the coincidence of the properties of document files and accounts used to create and modify files, since these actions cannot be performed on different computers.
Market news
Endoart company (part of the BSS pharmaceutical holding) opened an endoprosthesis production plant in St. Petersburg for 1 billion rubles
The total investment in the project at the first stage amounted to more than 1 billion rubles - the work was carried out at the company's own expense. At the moment, the first stage of commissioning has been completed - the enterprise can produce 35 thousand sets of hip endoprostheses per year. The area of the first line is 1.5 thousand square meters.
After the completion of the second (final) stage of the plant construction, the company plans to produce 35 thousand sets of knee endoprostheses per year. The area of the second line will also be 1.5 thousand square meters, about 800 square meters will be occupied by laboratory premises. According to the General Director of EndoArt, Yulia Gukkina, the company plans to attract additional funding from the Industrial Development Fund to carry out the work.
“The site was built in record time - in six months. We were able to build a new technological line. Our main task was to create a full-cycle production. We were able to 100% import substitution of technological processes and achieved approximately 70% import substitution for materials. We are currently working with colleagues to certify critically important materials,” Gukkina noted.
By 2025, the company plans to introduce an expanded line of hip and knee endoprostheses into production and completely substitute imports of medical devices.
Production technologies, including processes for creating porous and bioactive coatings, were developed jointly with the R.R. Gamaleya Russian Research Institute of Traumatology and Orthopedics. Vreden, PAO VSMPO-AVISMA Corporation, TsNII KM Prometey and AO Armalit. The company created the product line and design documentation jointly with the Federal State Budgetary Institution R.R. Vreden National Medical Research Center of Traumatology and Orthopedics. According to SPARK-Interfax, BSS LLC was registered in St. Petersburg in February 1996. The beneficiary of the legal entity is Eduard Zakhrabekov - he also owns the federal network of Aloe pharmacies, which is part of BSS. In 2023, BSS earned 57.2 billion rubles, net profit amounted to 1.1 billion rubles. The holding's retail division includes 576 pharmacies under the Aloe brand; the chain, with revenue of 17.161 billion rubles at the end of 2023, took 18th place in the rating of the Vademecum Analytical Center "TOP200 Pharmacy Chains of Russia".
Endoart LLC was founded in St. Petersburg in December 2017. The main OKVED is the production of medical instruments and equipment. In 2023, the company's revenue amounted to 9.8 million rubles, net profit - 144 thousand rubles.
In January 2021, BSS announced its intention to engage in the supply of baby and therapeutic nutrition, including specialized nutrition for young children and those with any pathologies. Then Eduard Zakhrabekov became the owner of 60% in BSS Food LLC.
Other
FDA to establish a single body on artificial intelligence
The US Food and Drug Administration (FDA) will create an Artificial Intelligence (AI) Council to coordinate all activities in this area. This was reported by the FierceBiotech portal, citing a letter addressed to the agency's employees from the head of the FDA's Center for Drug Evaluation and Research (CDER) Patricia Cavazoni.
It is noted that the new body will replace separate steering committees and working groups on AI. It will also work within the framework of a national community of practitioners in the field of AI, the report says.
The council's tasks will include monitoring the use of AI for drug development and research, as well as the use of technology within the FDA. In addition, his responsibilities will soon include an inventory of all neural network projects in CDER and with building a centralized process for obtaining consultations on future plans in this area.
The creation of the council is connected with the recent decree of US President Joe Biden on the safe development of AI, as well as the rapid growth in the number of applications to the FDA related to its use. The body will include representatives of all CDER divisions. It will be headed by three co-chairs - Tala Fakhoury, Qi Liu and Sri Mantha.
Source: https://pharmvestnik.ru/content/news/FDA-uchredit-edinyi-organ-po-iskusstvennomu-intellektu.html
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