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Ukraine's laws

New legislation concerning advertising of pharmaceuticals aims to ensure fair drug promotion

books_hammerThe Ukrainian pharmaceutical market, which declined to approximately $2.1bn in 2009, has begun to recover to its pre-crisis levels this year. The forecast market volume over the next year is a gain of about $2.4-2.6bn, experts predict.

The fast growth of this market has led to greater competition between pharma companies. Manufacturers are working hard to increase their sales and, as a result, pharmaceutical companies have spent far more on advertising in 2010. For example, their advertising spend in the media, including direct TV advertising, sponsorship, in the press and on radio for the first five months of 2010 represented an increase over the same period in 2009 of 70.6 per cent, worth UAH774.0m.

Regulatory framework
Under the Ukraine Law On Medicinal Products, the general rules on advertising medicinal products are stipulated by Ukraine Law On Advertising.

The Law On Advertising defines advertising as information about a person or a product, disseminated in any form and in any way, which is intended to form or maintain the awareness of consumers of advertisements and their interest in such a person or product.

It should be noted that only those medicines which are authorised for use in Ukraine, non-prescription and which do not require specialist knowledge or training, can be advertised.

These restrictions do not apply to drug advertisements placed in specialist publications designed for medical institutions and physicians, or disseminated at medical seminars, conferences and symposia.

As, in compliance with the current Ukrainian legislation, advertising of prescription drugs is prohibited, the patient can only receive information on them from physicians.

Therefore the marketing strategies of prescription drug manufacturers focus on the health professionals.

Procedures for the advertising of medicines to health professionals are established under the Regulation for Advertising Medicines to Medical Institutions and Physicians, approved by Order of the Ministry of Healthcare of Ukraine number 177 on June 10, 1997. The Order requires any advertisement to contain complete, precise and clear professional information corresponding to the properties of the medicinal product that are mentioned in its instruction for medical use, but not exceeding it. The information must be based on scientific evidence, comply with the general rules set out in the Ukrainian legislation and should be aimed at rational use of the medicine.

Promotional activities
In contrast to the EU countries, in Ukraine there are no specific laws governing promotional activities. Despite this, on June 24, 2008, the Memorandum for the Rules of Good Promotional Practice Accession was signed by pharmaceutical companies in Ukraine. This established the terms for proper promotion of medicines by pharma companies to health professionals and determined their rights and responsibilities. However, it is important to note that the Memorandum on Accession to the Rules was signed by just 32 pharma companies.

The Rules are an agreement between the companies that signed up for them to refrain from using unfair methods of promotion. They are not a legislative act, so no sanctions can be applied if they are broken, except those that do could face condemnation from other companies and the public.

According to the Rules, promotion of drugs is defined as any activity which is conducted, supported or organised by the pharmaceutical company, including media channels, and aimed at health professionals to promote, recommend, supply or use their particular medication for the patient prescriptions.

At present, giving free samples is one of the most popular activities manufacturers use for promoting their products in Ukraine. However, before planning promotional campaigns using such an activity, it is important to remember that providing free samples of medicines falls under the definition of advertising under Ukrainian legislation, and therefore should be made in full compliance with the relevant legal requirements regulating advertising. Furthermore, storage and distribution regulations and tax issues should be taken into account.

Legal initiatives 
At the end of 2009, the Antimonopoly Committee of Ukraine issued an Appeal to the Cabinet of the Minister of Ukraine. The Committee stated that during its investigations into the pharmaceutical market, it had discovered that medical representatives had used unfair practices with physicians to promote their products. Doctors prescribe for a fee a particular company's drug to a patient, which could be much more expensive, but not more efficient, than a cheaper one from another manufacturer.

The existence of such a scheme was evidence that the Rules were not being obeyed, so the Committee concluded that there was a need to introduce regulations through legislation establishing how manufacturers, physicians and pharmacists could interact with regard to the promotion of medical products.

As a result of the above mentioned Appeal, a working group was established, the members of which were approved by the Order of the Ministry of Healthcare of Ukraine. It included representatives from both State authorities and non-governmental professional organisations. The group would examine issues concerning the promotion of medicines by pharmaceutical companies and draft a legislative act which would make improper promotion of medicinal products impossible.

Another government initiative to stamp out such schemes is the idea of making physicians write the international non-proprietary names of medicines on prescriptions so that the patient can choose the drug manufacturer from the list offered by the pharmacist in the drugstore. The Draft Order, which includes the new way of issuing prescriptions, has been published for public discussion.

OTC list
Also, according to a recent statement by the Ukrainian Minister of Healthcare, the government intends to reduce the list of OTC drugs greatly. It should be noted that OTCs represent about 25 per cent of the Ukrainian pharmaceutical market currently, which is lower than the levels in other CIS countries. As an indication, on September 1, 2010 in the State Register of Medicinal Products of Ukraine, there were 14,377 drugs, of which 3,838 were domestic and 10,539 foreign. The list of OTC drugs authorised for use in Ukraine and approved by Order of the Ministry of Healthcare of Ukraine number 793 on November 2, 2009 had 3,626 names.

Undoubtedly, increasing the list of the prescription group will affect not only manufacturers and distributors of medicinal products, but also media owners because, as mentioned above, the advertising of prescription medicines is prohibited. Patients may also face some inconvenience from such moves because, before buying medicines they will have to queue to see a doctor and then find the appropriate branch pharmacy. This is because, in compliance with Ukrainian legislation, retail trade in prescription drugs is allowed only from drugstores and pharmacy points and not from pharmacy kiosks and without the prescription.

There are also draft laws being considered in the Ukrainian parliament, Verkhovna Rada, at present, which aim to regulate the sphere of drugs advertising. Some of these drafts provide restrictions under which the advertising of medicines (OTC and prescription) can be placed only in specialist medical media or disseminated at medical seminars and conferences, while other bills suggest that preliminary agreement must be sought over the content of an advertisement with the specially authorised central executive healthcare body. 

Considering the recent rapid development of Ukrainian healthcare legislation, numerous legislative initiatives and the close attention of the state authorities to the advertising of medicines, it is likely that the problem of improper promotion and advancement of medical products in Ukraine will be solved soon. In order to find effective mechanisms to help reduce unfair competition in the pharmaceutical market and to protect the patient from dishonest advertising of drugs, the complex approach, cooperation between government authorities, manufacturers, distributors, media owners and physicians, as well as adoption of the EU experience, are absolutely essential.

The Authors
Timur Bondaryev
is senior partner and Svitlana Ivasenko is associate at Arzinger

To comment on this article, email

9th December 2010


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