New clarifications from the AMC concerning marketing arrangements in the Ukrainian pharmaceutical sector

On 7 December 2015, the Antimonopoly Committee of Ukraine (the "AMC") clarified its approach towards marketing agreements between manufacturers/distributors of medicines and local pharmacy chains.

The key messages from the AMC are as follows:

  • marketing arrangements between pharmaceutical market participants are not illegal as such, although they need to comply with the AMC’s approved principles;
  • pharmacies must establish their fees for the marketing of medicines at a "reasonable level" and are allowed to add a "reasonable" margin to the cost of procuring medicines. This resolves the uncertainty caused by the previous AMC’s Guidelines, which arguably prohibited pharmacies from adding any margin to the cost of procuring medicines from distributors;
  • it is prohibited to incentivise pharmacies by using a success fee payable when they achieve certain turnover goals; and
  • those market participants that enjoy significant market power (i.e. able to determine or significantly influence the market by raising prices, restraining competition, etc.) must avoid entering into any marketing agreements that might:

    - affect competition on the market;

    - set up different terms and conditions for similar arrangements with different counterparties;

    - and create unreasonable barriers for the manufacturers/distributors/pharmacies which result in overpricing for end consumers.

    If you would like to receive further information or require assistance in connection with the above, please contact Dmytro Fedoruk, Rob Shantz, Natalia Gerus or Yulia Eismont.