Clinical Trials Russia

THE HEALTHCARE,
PHARMACEUTICAL & CLINICAL

TRIAL ENVIRONMENT IN RUSSIA
©2006 RM Consulting
THE HEALTHCARE, PHARMACEUTICAL AND CLINICAL TRIAL ENVIRONMENT IN RUSSIA
THE HEALTHCARE, PHARMACEUTICAL AND CLINICAL

TRIAL ENVIRONMENT IN RUSSIA
CONTENTS
1.0 Politics and Economics .......................................................................................................... 5

1.01 Background ....................................................................................................................... 5
1.02 The Economic Situation ................................................................................................... 6
1.03 Risks ................................................................................................................................... 9
1.03.1 Political....................................................................................................................... 10
1.03.2 Security ...................................................................................................................... 11
1.03.3 Legal .......................................................................................................................... 11
1.03.31 Intellectual Property Rights.................................................................................. 11
1.03.4 Foreign Direct Investments........................................................................................ 13
1.04 Demographics ................................................................................................................. 13
1.05 Infrastructure ................................................................................................................... 17
1.05.1 Transportation............................................................................................................ 17
1.05.2 Communication .......................................................................................................... 18
2.0 Pharmaceutical Market ......................................................................................................... 19
2.01 History .............................................................................................................................. 19
2.02 Pharmaceutical Expenditures........................................................................................ 21
2.03 VAT on Medicines ........................................................................................................... 22
2.04 Market Segmentation ...................................................................................................... 23
2.05 Market Drivers & Restrainers......................................................................................... 25
2.06 Pharmaceutical Regulation ............................................................................................ 26
2.07 Drug Registration ............................................................................................................ 27
2.07.1 Documents Requirements for Registration of Foreign Drugs.................................... 28
2.08 Certification Requirements ............................................................................................ 30
2.09 Pharmaceutical Promotion and Advertising ................................................................ 31
2.10 GMP .................................................................................................................................. 31
3.0 Healthcare in Russia ............................................................................................................. 33
3.01 Healthcare Policy ............................................................................................................ 33
3.02 Healthcare Spending....................................................................................................... 35
3.03 Structure of the Healthcare System .............................................................................. 37
3.03.1 Provision of Primary Care .......................................................................................... 39
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3.03.11 Health Posts ........................................................................................................ 39

3.03.12 Health Centres..................................................................................................... 39
3.03.13 Polyclinics ............................................................................................................ 39
3.03.2 Hospitals .................................................................................................................... 40
3.03.3 Health Institutions ...................................................................................................... 40
3.03.4 Sanatoriums and Health Resorts............................................................................... 40
3.04 Health of the Nation ........................................................................................................ 41
3.04.1 Population Demographics.......................................................................................... 41
3.04.2 Life Expectancy and Causes of Death....................................................................... 42
3.05 Disease Prevalence......................................................................................................... 43
3.05.01 Cardiovascular Disease ........................................................................................... 44
3.05.02 Cancer ..................................................................................................................... 45
3.05.03 Tuberculosis............................................................................................................. 46
3.05.04 Diabetes ................................................................................................................... 46
3.05.05 Drug Addiction and Alcoholism................................................................................ 47
3.04.06 Mental Disorders...................................................................................................... 48
3.04.07 Sexually Transmitted Disease (STD)....................................................................... 48
3.04.08 HIV ........................................................................................................................... 49
3.04.09 Dermatologic Diseases ............................................................................................ 50
3.04.10 Injuries, Poisoning and Other Accidents.................................................................. 50
3.04.11 Hepatitis ................................................................................................................... 50
4.0 Clinical Trials in Perspective................................................................................................ 52
4.01 History of Clinical Trials in Russia ................................................................................ 52
4.02 Growth in Trials ............................................................................................................... 54
4.03 The Russian CRO Industry............................................................................................. 55
4.04 Why Conduct Clinical Trials in Russia? ....................................................................... 56
4.04.01 Benefits of the Post-Soviet System ......................................................................... 57
4.04.02 Access to Investigators ............................................................................................ 58
4.04.03 Cost Saving Opportunities ....................................................................................... 59
4.04.04 Access to Patients ................................................................................................... 59
4.04.05 Fast Recruitment Rates ........................................................................................... 60
4.04.06 Patient Compliance.................................................................................................. 61
4.04.07 Quality of Work ........................................................................................................ 61
5.0 Clinical Trial Issues ............................................................................................................... 63
5.01 Study Costs ..................................................................................................................... 63
5.01.1 Investigator’s Fees..................................................................................................... 63
5.01.2 Equipment Expenses ................................................................................................. 64
2
5.01.3 Monitoring Expenses ................................................................................................. 64

5.02 Language ......................................................................................................................... 64
5.03 Logistics........................................................................................................................... 65
5.03.1 Travel ......................................................................................................................... 65
5.03.2 Mail and Courier Services.......................................................................................... 66
5.03.3 Communication .......................................................................................................... 67
5.04 Background Therapy ...................................................................................................... 67
5.05 Cultural Differences ........................................................................................................ 68
5.06 Recruitment Issues ......................................................................................................... 68
5.07 Logistics and Local Support .......................................................................................... 69
5.08 Monitoring........................................................................................................................ 69
5.09 Data Management............................................................................................................ 70
6.0 Study Set-Up .......................................................................................................................... 71
6.1 Regulatory Compliance - the Federal Drug Law ............................................................ 71
6.2 Selection of a CRO and External Vendors...................................................................... 72
6.3 Site Identification/ Investigator Selection....................................................................... 73
6.31 Medical Institutions ....................................................................................................... 75
6.4 Local IECs .......................................................................................................................... 76
6.5 Protocol and CRF Design ................................................................................................ 76
6.51 Protocol ......................................................................................................................... 76
6.52 CRF............................................................................................................................... 77
6.6 Legal Issues, Insurance and Contracts .......................................................................... 77
6.61 Patient Information and Informed Consent Form ......................................................... 78
6.62 List of Documents to be Submitted to Local IRB/IEC or Regulatory Authority ............. 78
6.63 Local Insurance Policy .................................................................................................. 79
6.64Contracts with Investigators and Investigative Sites ..................................................... 80
6.7 Study Approval.................................................................................................................. 80
6.8 Patient Recruitment .......................................................................................................... 81
6.9 Site Training....................................................................................................................... 82
7.0 Importing Clinical Trial Materials ......................................................................................... 83
7.10 Importing the Study Drug ............................................................................................... 83
7.10.1 A Centralised Approach ............................................................................................. 84
7.20 Importing Other Materials .............................................................................................. 85
7.20.1 Study Documents....................................................................................................... 85
7.20.2 Devices ...................................................................................................................... 85
7.20.3 Laboratory Kits........................................................................................................... 85
7.20.4 Packing Materials....................................................................................................... 85
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7.30 Exportation of Biological Media .................................................................................... 86

7.40 Export of Other Clinical Trial Materials......................................................................... 86
7.50 Summary .......................................................................................................................... 87
4
1.0 Politics and Economics
1.01 Background
By the 1980s, communism in the USSR was not working. In 1985, Mikhail Gorbachev came to
power and introduced many reforms in an attempt to modernize the economy and make the
Communist Party more democratic. These reforms ultimately led to the break up of the USSR
and the end of the one-party Communist rule.
Figure 1.01: Changes in the Macro-Environment
1997 2003
Vladimir Putin: fit, consistent, pragmatic,

Boris Yeltsin: ill, erratic, surrounded by
President surrounded by technocrats from young
corrupt oligarchs.
professional elite.
Improved relations, especially with the US
Uncertain ‘engagement’ with US but also with Western Europe and Japan.
World Status
and NATO, following Cold War. Discussions in place on closer relations
with NATO and membership of the WTO.
International Risky emerging market. Partner with the West in business, in
Perception of Serious concerns about law, ownership and supplies of oil and in the fight against
Russia commercial contracts. terrorism.
Continuing strong influence of the Centralisation and consolidation of power
Communists in the Duma. under Putin.
Government Major conflicts within parliament and the Regional governors brought into check.
Regions. Parliament aligned to Presidential
Focus on (conflicting) personal agendas. Administration policies and priorities.
Smaller group with increasing economic
Small group with enormous economic power but decreasing power and influence
Oligarchs power and political influence. in politics.
Dominant in all important sectors. Increasing importance of the new
entrepreneurial class.
Asset shifts with very little attention to value
New managers are installed and motivated
Industry creation.
to carry out real restructuring and value
Restructuring Used to enrich a few at the expense of
creation for shareholders.
economic development.
Policy
Unstable, frequent changes. More consistent, stable and reliable.
Continuity
Putin’s priority. Progress will be gradual

Corporate
Major abuses the norm. but significant improvements have been
Governance
made already.
Policy engaged to reduce corruption
Corruption Pervasive. through restructuring, corporate
governance and legal reform.
Personal 30%; Corporate 35% and dozens Personal 13%; Corporate 24% and major
Taxes
of hidden taxes. simplification of tax codes.
BP announces $6.75 billion investment for

FDI BP at “war”; calling foul.
50% of TNK.
5
With Boris Yeltsin came democracy. Many in the West saw him as a democrat and reformer. He
helped bring down the communist system; but, his biggest mistake, both for Russia and for
himself, was his failure to establish strong political institutions enforcing the economic and
financial stability of the country.
In August 1998 the Russian Financial crisis occurred causing a major downturn in worldwide
financial markets as the rouble was devalued. After this event, foreign investments in the country
were virtually non-existent negatively impacting not only on the economy but also on the
reputation of Russia itself.
Following the election of Vladimir Putin many reforms to the legal system and political
infrastructure have been implemented. The confidence of foreign investors has returned and the
overall picture has changed considerably since the 1980s - Russia has become more stable
politically, economically, socially and commercially and is now one of the fastest growing
economies in the world.
1.02 The Economic Situation
In recent years positive economic growth in Russia has attracted much attention form
international markets. Many multinational giants have expanded their operations into Russia
covering industries such as: energy and power, manufacturing, retail, healthcare and many
others.
Figure 1.02.1
Key Economic Performance Indicators

45
40
Persentage (unless mentioned)
35
30
25
20
15
10
5
0
-5 2001 2002 2003 2004 2005p 2006e 2007e 2008e
GDP Growth % Consumer Spending % Change
Imports (G+S) % Change Exports (G+S) % Change
Inf lation (CPI) % Population Growth %
Local Currency to US$ Local Currency to Euro
p – preliminary results, e – estimates

Source: World Market Analysis: Global Insights – Russia, The Economist – Country Profile, Russia
6
The gradual slow down in GDP growth is a natural result of the economy reaching maturity. GDP
per capita; however, shows no signs of slower growth suggesting a further increase in the
standards of living in Russia.
Figure 1.02.2
Source: DataStream
Slowing growth in imports is a direct result of current government policy and reform - the import
substitution program aims to start substituting imports with domestic production thus supporting
the domestic manufacturers and strengthening the economy. However, it must be noted that
growth is still positive thus encouraging foreign investments into the country.
Figure 1.02.3
Source: DataStream
In 2005, real disposable income was on the rise as were corporate profits fuelling an increase in
investments in fixed capital.
7
Figure 1.02.4
Source: Bank of Russia, January 2006
As was the case in 2004, consumer spending grew faster than household income in 2005 while
the propensity for consumption increased and the share of household spending on savings
declined. Although, there are no clear signs of a deterioration in consumer spending, slower
growth is predicted - real consumer spending grew by 10.7% in 2005 (year on year) compared to
11.8% in 2004.
The increase in consumer spending was accompanied by rapid growth in bank lending to
individuals. The share of household money income spent on the purchase of goods and services
1
rose by 1.1 percentage points in 2005 (year on year) to 70.9%.
Figure 1.02.5
1
The Bank of Russia, January 2006 outlook
8
At the same time consumer prices grew by 10.9% in 2005 compared to 11.7% in 2004, thus
supporting rising consumer confidence and affordability.
Figure 1.02.6
While the pace of economic growth has been enviable over the past several years, the signs are
now clear that record-high world market oil prices are not enough to maintain this momentum. Oil
prices have boosted export earnings, but this has been accompanied by an upward pressure on
the currency and domestic prices. With a dual focus on the exchange rate and inflation, the
Central Bank has been unable to rein in inflation effectively.
The enormous long-term potential for Russia, based on its abundant natural resources and
human capital, is not in doubt; but unlocking this potential will require dedicated, uninterrupted
structural economic reforms and astute macro-economic management.
1.03 Risks
The principal risks to a modestly optimistic medium-term forecast for Russian economic growth
are varied. They include an extended period of sharply lower world-market oil prices, which would
threaten investment growth as well as the country's fiscal situation.
Additional major concerns include the failure of the Russian government and Parliament to
manage key unfinished elements of structural reform effectively, or even an attempt to roll back
some elements of privatization in the interest of increasing the direct influence of the State over
strategic sectors of the economy.
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1.03.1 Political
During his first term, Putin worked hard at bolstering his authority and that of his presidential
2
administration in engineering a system that is regarded as a “managed democracy.” The
strengthening of authoritarian tendencies has been accompanied by reinforcement in the
apparatus of repression. This includes promoting the role of special services, a general attack on
democratic and civil rights, and ever-more aggressive policy in favour of the wealthy. Three years
of Putin’s rule have achieved much in this direction:
− 13% income tax was introduced;
− aggregate social benefits tax was reduced by 5%;
− pension reform was initiated (aiming to turn all pensions over to privately held investment
funds);
− the diminution of already threadbare social programs and benefits continues;
− the long-planned reform of energy systems and of the provision of communal services and
utilities is beginning to be put into action.
Figure 1.03.1: Russian Political System
The Presidency Federal Assembly Higher Courts

(Administration) (Legislature) (Judiciary)
Prime Minister Federal Council Constitutional Court
Council of Ministers
State Duma Supreme Court
(Government)
Supreme
Arbitration Court
The State Duma is the lower house of the Russian parliament with United Russia (Edinaya
Rossiya) being the dominant party. The continued predominance of United Russia in the State
Duma and the positive public support of President Putin and his reforms gives the government
2
Managed democracy’ is a system, under which those problems that it is possible to solve democratically
are solved by democratic means. And those problems, not susceptible to democratic solutions are solved by
authoritarian means. The decision is made by the President and administration. (World Socialist Web Site,
V. Volkov, “Russian elections”, Dec 2003).
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the strength that it needs to bring stability to the country in the short-term, (until the 2008
Presidential elections at least). High oil prices have allowed the government to balance the
budget, but this has masked the fact that liberal economic reforms are needed to create long-term
stability. Nevertheless, despite the apparent dominance of Putin and his genuine desire to
implement these reforms, the inherent conservatism of the United Russia party has the potential
to become an obstacle to reform in the medium-term.
There is concern over whether or not the Duma elections in 2007 will allow liberal and reformist
politicians fair representation or sufficient power to act on their agenda. The election of a new
president in March 2008 will present the biggest opportunity for real change.
Government bureaucracy is at the moment one of the main issues for foreign investors as it
creates unofficial inter-regional trade barriers and the power of the regional authorities may get in
the way of business development. However, this situation is changing in a positive direction as
regional governors will now be appointed by the President instead of being elected as before.
1.03.2 Security
Organised crime is one of the main drawbacks of doing business in Russia. The post-1991 period
has witnessed a real explosion in organised criminal and semi-legal activity. In line with economic
development and growth there is still concern that around 45% of consumer goods and services
fall into the shadow economy. The problem is worsened by widespread corruption in the police
force. Today control over this activity is tightening as the government is constantly working
towards the elimination of organised crime.
1.03.3 Legal
There has been rapid legislative reform since the election of President Vladimir Putin and a more
compliant parliament, with overhauls of land, labour, tax and company law bringing much-needed
changes, at least on paper. Better intellectual property legislation was passed in 2002 as Russia
prepared its bid to join the WTO.
1.03.31 Intellectual Property Rights
Russia’s laws on the protection of intellectual property protection are well drafted and meet many
international standards. Russia also belongs to most of the international conventions on patents,
trademarks, copyrights and other intellectual property. Nevertheless, Russia’s record on the
actual protection of intellectual property has been inadequate at best in the past decade, and the
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country is on the 301 watch list for IPR infringements. Infringement of intellectual property rights
is a nationwide problem but the situation is especially poor in the Russian Far East.
The top 3 industry sectors to be affected by counterfeiting include: the music business (~ 75%),
video products (~ 85%), and computer software (~ 97%); nevertheless, practically all medicines
of commercial interest regardless of their brand names have been targeted at some point. It
should be mentioned that Russian pharmaceutical companies produce mostly low-cost/high
volume generic drugs and are therefore generally not targets for counterfeiters – it is the
imported, innovative product market (around 70% of market share in dollar terms), that is
affected. The Coalition for Intellectual Property Rights (TSIPR) estimates that counterfeit drugs
account for about 15% of total pharmaceutical market resulting in large amounts of lost profits for
legal companies. According to official reports, 63 counterfeit medicines were discovered in 2004.
Authorities have taken steps to strengthen relevant legislation, to allocate law enforcement
resources for combating IPR crime, and to conduct raids of pirate plants. In the pharmaceutical
industry - where counterfeit drugs can seriously harm their users - the government has worked
successfully with companies to counter this grave danger to public health.
In the event of an infringement of intellectual property rights, the IPR owners can apply to several
different agencies to enforce the protection of their rights. To stop illegal usage of a trademark, a
company should contact the Regional Department of the Ministry of Antimonopoly Policy and
Business Support (MAPBS). The MAPBS will send a written order instructing the infringing party
to stop illegal usage of a trademark, and may also impose a penalty. To reimburse lost profit and
restore the company’s reputation through the mass media, a company should apply to the local
Commercial (in Russia called Arbitration) Court.
In addition, Russian Customs can help trademark and brand name owners to combat counterfeit
goods coming into Russia from other countries. The trademark/brand name owner should file an
application with the State Customs Committee requesting assistance in protecting the owner’s
intellectual property rights. The applicant should also provide such documentation as
identification data for the goods to be protected, the main entrance points of the goods into
Russia, and a list of authorised dealers and distributors.
It is recommended that a wider description of the invention or product be used, omitting

insignificant details in the patent formula when patenting a product or invention in the Russian
Patent Department. It is also recommended that companies consult with patent agencies before
filing a patent application. If a company intends to patent a process, it should also patent the end
product of this process.
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1.03.4 Foreign Direct Investments
While the vast majority of FDI in Russia remains in the natural resource sector, there has been
much activity across all sectors; notably in the retail sector, the retail banking sector and in the
food and beverage sector which is set to expand from Moscow and St. Petersburg and into
Russia's regional centres.
A study conducted by the Association of International Pharmaceuticals Manufacturers (AIPM) and

PricewaterhouseCoopers released in August 2005, suggested that the more progressive reforms
in conjunction with improved economic, political and industrial development in Russia, is
attracting more FDI into the country. According to this study, over 50% of 23 major foreign
pharmaceutical companies (Pfizer, Sanofi-Aventis, Novartis, GlaxoSmithKline, to name a few)
operating through representative offices in Russia are planning to set up local production within
the next five years. Specifically, about 33 percent of these companies plan to bring their local
production subsidiaries on-stream in the next two-three years, while 19 percent plan to do so
within the next five years.
While the government continues to implement reforms and to encourage greater inflows of FDI,
fundamental outstanding issues continue to plague investment confidence. Highest on the list of
complaints by foreign businessmen is the pervasive influence of government bureaucracy in all
areas of business operations, as well as unofficial barriers imposed by regional authorities and
the arbitrary application of the rule of law. Bureaucratic barriers include:
− unexpected changes to tax laws;
− customs authorities;
− tax authorities;
− unexpected changes in trade policy;
− harassment by the authorities;
− inter-regional trade barriers.
1.04 Demographics
In 2005, the population in Russia was estimated at around 145 million. Roughly 75% of people
live in the European part of Russia (west of the Urals); in addition, most of the industrial cities with
over 1 million inhabitants are also located in the European part. This is mainly due to the high
level of trade and industry in the region leading to better work prospects and generally better
living conditions.
13
The Russian population is in decline due to natural causes as well as migration form former
USSR; however, an influx from the Baltic countries has helped Russia to compensate for
population losses - for the period of 1989 - 2004, 5.7 million people left the country while around
10 million migrated into Russia.
Fig 1.04.1: Major Russian Cities
Fig 1.04.2: Summary of the 10 Major Russian Cities
The largest city in Russia.
The Russian capital - its political, historical, architectural, scientific and business
centre.
Moscow
Very good transportation and telecommunication infrastructure.
Population > 10
All global companies from all industries are represented here. Location of all
million
major research institutions and scientific centres.
High industrial and economic development.
www.mosreg.ru
The second largest city and the largest seaport in Russia.

St. Petersburg
A major rail junction and industrial, cultural and scientific centre.
Population ~ 5.1
Most global companies in most industries are represented here.
million
Very good healthcare infrastructure.
14
Flight time to Moscow: 1h 30 mins
http://www.spb.ru/eng/
A large Port on the Volga River with a developed transportation and

telecommunication infrastructure.
There are several affiliates of the Russian Academy of Science, and about 100
Nizhny Novgorod scientific research laboratories.
Population > 1.5 Well organised healthcare system.

million
Flight time to Moscow: around 1h
www.government.nnov.ru
A centre of scientific and technological progress.
An entire scientific region inside the city comprised of universities, large scientific
institutions and laboratories.
Novosibirsk
Good transportation and telecommunication infrastructure.
Population > 1.4
million High industrial and economic infrastructure
www.adm.nso.ru
The main industrial and cultural centre of the Ural region.
A highly industrial and resource rich city.
Healthcare system well structured and one of the most advanced in the country.
Yekaterinburg
Population ~ 1.3 Good transportation and telecommunication systems.
million
High level of FDI. High industrial and economic development.
Flight time to Moscow: 2h 45 min
http://www.ekburg.ru/
A dynamic, industrial city with a healthy growing economy and relatively high
consumer income levels.
Samara
One of the main ports on the Volga river. Developed rail and air transport
Population > 1.2 systems.
million
Well organised healthcare system.
Lack of research institutions and laboratories.
15
10 pharmaceutical manufacturers.
www.adm.samara.ru
A significant Volga river port.
Well developed transportation and telecommunication sectors.
Volgograd Well organised healthcare supported by local government.
Population > 1 A number of research institutions.
million Good industrial and economic development.
www.volganet.ru
One of the major industrial centres in Russia.
Developed transportation and telecommunication sectors.
Chelyabinsk Well organised healthcare system.
Population > 1 Scientific research mainly done by the State Medical Academy.
million Good industrial and economic development.
www.ural-chel.ru
A city of commercial and cultural importance being located on the coast of the
Don river.
A major passenger-oriented and industrial shipping port.
Rostov – on – Located in the heart of trade routes connecting 3 seas (Black, Azov and
Don Caspian).
Population > 1 The third largest city in imports/ exports turnover with good transportation and
million telecommunication infrastructure.
High economic and industrial development
www.rostov-gorod.ru
Irkutsk
Industrial and scientific city in the heart of Siberia.
Population ~ 1
Well developed telecommunication structure and good transportation system.
million
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Local government supports and develops the healthcare system.
A number of scientific research centres.
Good industrial and economic infrastructure.
http://www1.irkutsk.ru/
1.05 Infrastructure
1.05.1 Transportation
Although Russia’s infrastructure is vast, the lack of investment in recent decades has had a
negative effect on its quality. The majority of Russian ports, airports, railways and power stations
are around 45-50 years old. Nevertheless, the transportation network has undergone significant
changes in the past ten years, transitioning from a centrally managed system with lack of private
initiative to a Western-type model. The transformation has led to a rapid increase in quality and a
more diversified infrastructure and service. Money is being spent on improving the quality of the
road network, while ports and railways are being reconstructed to attract more business and
investments.
Overall, the transportation system in Russia is good regardless of whether you are travelling
around the country or just within a city. The main problems are delays and relatively old technical
support systems.
The best and fastest way to travel around the country is by air - all cities in Russia and almost
every town can be reached by air. Air travel is most popular for long distances (for example to
Siberia or Asian Russia). A 2 hour flight would typically cost around 3000-5000 roubles (US$ 103-
173 economy class) depending on the airline; however, there are a variety of low-cost carriers
available that make air travel more affordable to the wider population.
The car is the second best mode of transport but traffic conditions can be notoriously bad. Trains
tend to be cheaper than air travel (depending on the “class” of travel) and relatively reliable;
however, the conditions and service are not perfect for long-distances. Moreover, trains take
much longer than air travel - for example, the flight from St. Petersburg to Moscow is just over 1
hour, whereas the fast train takes around 6-7 hours; the flight to Novosibirsk is around 3.5 hours
st rd
while the train takes 48 hours and will cost between US$400 (1 class) and US$70 (3 class).
Inner city travel is generally pretty good barring a few delays.
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1.05.2 Communication
The country’s telecommunication infrastructure is patchy in terms of both quality and

geographical coverage.
The IT market has grown by an average 30% per annum over the last few years, but is generally
confined to the main urban centres with Moscow making up as much as one-quarter of users, and
the citizens of St Petersburg coming in next.
Fixed line and mobile networks are present in every city speeding up business processes;
however, fax transmissions can be unreliable. Although long-distance and international calls are
quite expensive by Russian standards, there are prepaid calling cards that can help to make
these calls more affordable.
Internet providers exist in every Russian city. In the smaller cities, the internet is mostly dial-up
which is not very reliable; but in more developed areas, one can good quality dial-up and broad
band services. In the major cities, new wireless internet technology is slowly coming onto the
market.
Due to an undersupply and scarcity of electricity resources, as well as under-financing of this

sector by local government, electrical supply can be a problem. Consequently, in some areas the
electricity is turned off for a period of time in the day (“veer”); although, this is not common in the
major cities.
It should be noted that in the 10 aforementioned major cities the communications infrastructure is
very well developed and one would not experience any constraints in sending, receiving or
shipping parcels, in mobility, or in communication.
All major world couriers are present in Russia: DHL, TNT, Fed-Ex; providing a fast and reliable
way for companies to import goods and materials into the country.
DHL offices are located in almost every town and city; whereas Fed-Ex and TNT have more
limited coverage. Moreover, the Russian mail system can be used although it is generally not as
reliable as the courier system.
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2.0 Pharmaceutical Market
2.01 History
Prior to the financial crisis of 1998, the pharmaceutical market was viewed as being relatively
successful in Russian terms; however, by Western standards it was considered underdeveloped.
By 1997, consumption of pharmaceuticals had overtaken pre-reform levels and the market
reached $3.1billion in terms of ex-manufacturers prices.
The 1998 economic crash made a huge impact on the market. Consumer spending shrivelled,
along with federal and regional funding for healthcare, and the value of the market tumbled to an
estimated $2.4billion. Imports accounted for $1.3billion (55%) and Russian production was
$1.1bn (45%). Total imports during the first six months of 1999 amounted to $0.33billion,
equivalent to about 40% of the 1998 level for the corresponding period.
Fig: 2.01.1: Russian Pharmaceutical Sales
2003a 3124
2002a 2297
2001a 2039
2000a 1713
1999a 1624
1998a 2330
0 500 1000 1500 2000 2500 3000 3500

US$ million
Source: US Census Bureau; Economist Intelligence Unit
Post-crisis, the Russian pharmaceutical market has witnessed a steady and fast recovery,
exhibiting 10 - 20% annual growth and reaching $7.4billion in retail price terms in 2005 – and it is
still growing. Growth can be attributed to both a rise in real production volume and an increase in
buying power. Stabilisation of the exchange rate against inflation means that people have more
cash available to spend on more effective and expensive drugs, which in turn has led to the
substitution of Russian produced medicines by foreign ones. Thus, by 2004 the market share of
imported pharmaceuticals reached 60% of the total market in dollar value.
Nowadays, the Russian Pharmaceutical market consists of two main segments: the retail
pharmacy sector (80%) where over 40% of pharmacies are privately owned and provide an
19
excellent outlet for expensive, imported products; and the hospital segment (20%) which mainly
focuses on relatively inexpensive generic drugs.
Fig: 2.01.2: Russian Pharmaceutical Market
$bn
4
0
2000 2001 2002 2003 2004 2005e
Ex-works prices Wholesale prices
Retail prices Linear (Retail prices)
Source: Brunswick UBS Warburg, Boston Consulting Group, LCP
However, it must be noted that cheap, domestically produced drugs continue to dominate the
market in terms of volume of sales. This is due to the fact the majority of healthcare expenditure
is financed on an “out-of-the-pocket” basis and that the income of an average citizen (excluding
Moscow and St. Petersburg) precludes them from buying expensive imported pharmaceuticals.
Fig: 2.01.3: Market Share of Imported vs. Domestic Drugs
29 29 29
75 75 76
71 71 71
25 25 24
June July August June July August
Share, $ Domestic Imported

Share, packs
Source: Retail Audit of Russian Pharmaceutical Market by DSM Group, 2005
20
Fig: 2.02.1: Drug consumption per capita (August ’00 – August ’01)
500
452
450
400 381
350
$ per capita
300
250 223
200 184 177
160 152 138 127
150
89
100 67 53
50 26 26
0
*
es
ly
il
om
*
ce
a
da
nd
o
d
ia
n*
az
in
an
ai
ic
Ita
an
ss
at
an
na
la
Sp
nt
pa
gd
ex
Br
m
St
al
Po
Ru
Fr
ge
Ca
Ja
M
er
Ze
d
Ki
G
Ar
te
ew
d
i
Un
te
/N
i
Un
lia
s tra
Au
Source: World Health Organization: * GDP for Russia is estimated for 2001; ** Including hospitals
2.02 Pharmaceutical Expenditures
Russians spend very little on pharmaceuticals compared to Western populations and Central
Europeans - almost 5 times less compared to Poland and 47 less than in the US. In spite of this
fact, the per capita consumption of pharmaceuticals and healthcare products in Russia is
expected to increase in the long-term.
Fig: 2.02.2: Reimbursed vs. Privately Funded Pharmaceuticals
100%
90%
80%
70% Privately purchased drugs

(Pharmacy)
60%
Reimbursed drugs
50%
(Pharmacy)
40%
Hospitals
30%
20%
10%
0%
95
96
97
98
99
00
01
E
02
03
04
05
06
19
19
19
19
19
20
20
20
20
20
20
20
Source: Russian Ministry of Health
21
2.03 VAT on Medicines
The levying of VAT on pharmaceuticals was seen as an important source of revenues in the
Russian government's efforts to render the major changes in Russia's new tax regime revenue
neutral. The compromise amendment to the Tax Code, passed by the Duma in December 2001,
introduced a reduced 10 percent rate on drugs (provided that the drug in question has a valid
registration certificate).
The introduction of the VAT was more or less conducted according to the original plan. The
Customs Committee issued instructions to all customs posts clarifying that the 10 percent VAT
rate should be levied on pharmaceuticals as of January 1, 2002.
Application of the new reduced rate of VAT on pharmaceuticals became the source of much
misunderstanding at customs posts. Some customs inspectors began to request registration
certificates for the drugs, issued by the MoH. Previously, import permits for the pharmaceuticals
were the only documents necessary for importation. In cases, where such registration certificates
are not provided, customs officials are charging a 20 percent VAT. This has caused problems for
pharmaceutical products undergoing periodic re-registration, since in the absence of a valid
registration certificate, they are subject to the 20 VAT percent rate.
The customs authorities' actions contradict the MoH position, which holds that an import license
and a letter indicating that a product is undergoing re-registration should be sufficient to qualify for
the reduced 10 percent rate. Such lack of consistency or coordination between the two
government agencies is causing substantial damage to importers.
Not surprisingly, the levying of VAT on pharmaceuticals is an unpopular measure among

consumers and manufacturers. Russian consumers have little disposable income, and have
difficulty meeting the increased price levels. Consequently the pharmaceutical companies will be
obliged to absorb some of the additional costs of VAT in order to maintain the market. Some
analysts worry that VAT on pharmaceuticals will harm Russia's numerous poor and pensioners,
many of whom will be forced to sacrifice on other basic necessities to buy medicines.
Russia is not unique in having a VAT on pharmaceuticals. Many Western countries levy 15-17
percent VAT on all goods and services, including pharmaceuticals. Such a policy has few
opponents in the West since medical insurance often covers the cost of prescribed drugs. Russia
does not have a developed system of government reimbursement for drugs, and the majority of
patients pay the full price for prescribed drugs. Those eligible for reimbursement include the
disabled, the war veterans, Chernobyl liquidators, and families with many children, people with
HIV, and cancer and diabetes patients.
Many pharmaceutical industry analysts believe that VAT on medicines is stimulating another
problem – because of the high price of all medicines, particularly imported ones, making copycat
22
drugs and selling them in Russia has become a highly profitable business for counterfeiters who
have already captured around 15% of the total market share.
2.04 Market Segmentation
Market segmentation in Russia is considerably different to Western Europe, with branded

generics the strongest growth segment.
A list of essential drugs was compiled by the MoH, containing 7,100 products. The prices for
these drugs must be registered with the State. Hospitals and polyclinics are encouraged to
restrict themselves to the administration of drugs on this essential list, but compliance is
incomplete. There have also been attempts to encourage the prescribing of “generic” generics,
but this has been problematic. Firstly because the supply of unbranded products is unreliable, but
secondly because a new wave of “more informed” patients with increasing amounts of disposable
income are emerging who want to use branded products.
Fig 2.04.1: Market Segmentation Comparisons, Western Europe vs. Russia
Segment Western Europe Russia Trend
OTC 35 – 40% 35 – 40% • Western goods substituted by low cost

providers after crash
• “Comfort” products unlikely to regain

position
• OTC segment growing in general
Innovative 50 – 55% 5 – 7% • Not affordable to wider population

Brands
• Stable, if small, consumer group with
modest growth prospects
Branded 5 – 10% 30 – 35% • High level of customer/patient loyalty

Generics
• Most promising segment
“Generic” 5 – 10% 25 – 30% • Western products vulnerable to low cost

generics alternatives
• Will continue to be an unstable segment
There are about 800 companies who manufacture pharmaceutical products in Russia, and some
70,000 pharmacies. Of the 800 pharmaceutical producers, only 300 are domestically owned;
these mainly manufacture generics drugs, using imported APIs. Many also import bulk
tablets/capsules for blister packing.
23
Collectively, the top eight domestic producers account for around 60% of total domestic
pharmaceutical output (by volume) and for about 15% of the entire pharmaceutical market by
3
value.
The State owns 35% of all pharmacies and around 100 domestic pharmacy chains operate in the
country – the pharmacy market is so fragmented that the top ten chains control a mere 10% of
market share. In Moscow, private pharmacies account for 59% of the market, and around half of
these are part of a chain. The company 36.6 is Russia’s largest domestic pharmaceutical retailer
1
by turnover.
Fig 2.05.2: Top Russian Manufacturers and Top Foreign Importers
Top Russian Manufacturers Top Foreign Importers

Sales, $ Sales, $
(1Q 2005) (3Q 2004)
Veropharm 28.3ml Sanofi-Aventis 42.5ml
Nizhpharm 21.2ml Berlin-Chemie 34ml
Moskhimpharmpreparaty 10.8ml Pharmastandard 27.1ml
Otechestvennye Lekarstva 10.8ml Gedeon Richter 26.7ml
Akrikhin 7.7ml Pfizer International Inc 26.5ml
Bryntsalov 6.3ml Novartis Pharma 21ml
Biokhimik 5.8ml Servier 19.7ml
Biosyntez 4.7ml KRKA 18.3ml
Dalhimpharm 3.9ml Nycomed 18ml
The wholesale sector is highly consolidated. The largest companies are Protek (2003 revenue of
US$900m, 26.6% market share) and SIA International (2003 revenue of US$755m, 22.3% market
1
share). Together, they supply around 16,000 pharmacies and hospitals.
Local production cannot meet pharmaceutical demand - imports help to address this problem, but
there is still a large unsatisfied demand for many classes of medicine.
3
The Economist Intelligence Unit, Russia, 2005
24
Fig 2.05.3: The Best Selling Drug Classes in the Russian Pharmaceutical Market, 2003
Drug Class Percentage (%) of Total Demand
Cardiovascular 18.2
Analgesics, Antiseptics and Anti-Inflammatory 16.7

Drugs
Antibiotics 14.3
Vitamins 9.8
Tranquilizers, Psychotherapeutic and Central 7.5

Nervous System Stimulants
Antivirus 5.8
Antihistamine Preparations 4.2
Purgatives (Laxatives) 3.3
Digestive Aides 3.0
Other Pharmaceuticals 17
Source: http://www.hccp.ru/business/export/farma_market.htm
2.05 Market Drivers & Restrainers
Overall, the social and cultural factors which are driving the positive development of the Russian
economy are very favourable for the development of the pharmaceuticals market in general and
the pharmaceutical distribution market in particular:
− The population of the Russian Federation has been and remains an ageing population;
− The amount of disposable income and, therefore, the level of pharmaceutical spending, have
grown substantially since 1990;
− Lifestyle changes combined with positive attitudes towards new products and services have
led to alterations in consumer consumption;
− The level of consumerism has increased significantly.
The income per-capita is disproportionately distributed, with large cities boasting higher than
average income, with the wealthiest inhabitants (on average) residing in Moscow and St.
Petersburg.
Market restrainers can be generally attributed to the fact that healthcare is a low government
priority:
25
− There is a corresponding low level of healthcare financing;
− Far fewer than 50% of those entitled to reimbursed medicines can actually realise their right;
− Outside of the major centres exists a cash-strapped population with low purchasing power;
− A poor national insurance system with underdeveloped private health insurance and a crippled
obligatory State health system;
− VAT introduction on medicines introduced an added burden on price.
2.06 Pharmaceutical Regulation
Russia has developed a system of State control over the circulation of drug, narcotic and
psychotropic preparations which includes:
− Licensing of their production and imports;
− State registration and certification;
− State control over standards, quality, efficiency and safety;
− State regulation of pricing; and
− Organisation of manufacturing and wholesale trade.
Nevertheless, Russia still lacks a solid legislative base and regulation of the pharmaceutical
sector has suffered as a result of decentralisation and is no longer as coherent as it was in the
1980s.
The main government body involved in the regulation of the pharmaceutical industry is the
Ministry of Health (MoH). The MoH maintains control over practically every aspect of regulatory
activity and is supported by a number of other agencies involved in regulating specific areas of
the market – for example: the State Standards Committee; State Customs Committee; the
Ministry of Industry, Science and Technology; the Ministry of Economic Development and Trade;
the State Patent Office; and the Ministry of Antimonopoly Policy.
The MoH, supported by various regional and local certification committees, is responsible for:
− Registration of pharmaceutical products;
− Obligatory and voluntary certification of such products; and
− Issuing licenses for the wholesale trade of pharmaceutical products, narcotics and
psychotropic substances.
Certification standards have to be approved and coordinated by the State Standards Committee.
However, the MoH has the lead in developing actual certification standards.
26
The Ministry of Industry, Science and Technology is responsible for issuing licenses for drug
manufacture; however, these licenses have to be approved by the MoH in advance.
All imports of medicines must be accompanied by an import license issued by the Ministry of
Economic Development and Trade. The import license requires approval from the MoH.
2.07 Drug Registration
Generally, the Russian drug registration system is very different from the practices adopted in
major developed countries. It is a complicated process which includes a patent search and
potentially, further clinical trials to demonstrate safety and efficacy – although, drugs can be
registered without a trial having been conducted in the country.
The registration and clinical trial period for bringing a single product to the Russian market for the
first time can take anything up to two years or more.
There are many grey areas in registration procedures and the system continues to lack clarity
and transparency. In addition, cultural and language barriers often become a challenge to foreign
companies attempting to register pharmaceuticals by themselves without appropriate legal advice
or help from experienced distributors or consultants.
As the registration procedure is quite complicated and because the documents tend to change
due to constant changes in the regulatory requirements, the only way to accomplish registration
of a pharmaceutical product in Russia is through one of the following types of companies:
− a company incorporated in Russia and belonging to the foreign parent company;
− a Russian distributor/authorized agent or a consulting company.
The registration procedure begins with the signing of a contract and the submission of a number
of required documents to a special entity affiliated with the MoH - the Federal State Enterprise
"Scientific Centre for Expert Assessment of Medical Products". The "Centre" conducts reviews
and expert assessments of the registration documents and directs all required stages of the
registration process.
The "Centre" works in close cooperation with a number of expert committees, including the
Pharmacology and Pharmacopoeia Committees, and the Committee on Ethics, as well as
research institutes on conducting reviews of the documents, pre-clinical, clinical, toxicological,
laboratory and other tests required for registering a drug.
The cost of registering a single foreign drug is around $12,000 while the fee for a domestically
produced drug is $6,000. The registration is valid for 5 years. It should be noted that this fee does
not include any costs of trials which might be assigned to a drug.
27
The registration certificate is issued by the Department of State Control over Drugs and Medical
Equipment of the Ministry of Health. Registration cannot be conducted by phone, e-mail or any
type of correspondence and involves establishing direct contact and an ongoing working
relationship with an expert from the Centre. Foreign manufacturers should perform registration
either through an authorized agent or distributor, in-house Russian-speaking registration
personnel or via a regulatory contact permanently based in Russia.
Many foreign companies have established good working relations with the MoH and have
successfully overcome difficulties in registering or re-registering medical products in Russia. The
good thing about the system is that it is pretty centralised and the applicant needs only to deal
with a few departments within the MoH. Again, legal advice and assistance from the distributor is
strongly recommended.
2.07.1 Documents Requirements for Registration of Foreign Drugs
General:
i. Application for the State registration of a pharmaceutical including the name and contact
information of the manufacturer;
ii. The name of the pharmaceutical preparation, including international non-proprietary name,
scientific name in Latin, trade name and main synonyms;
iii. List of active ingredients and components;
iv. Recommended dosage, instructions for use;
v. Description of the drug and its packaging, shelf life and storage conditions;
vi. Power of Attorney issued by the manufacturer to the authorised company for carrying out
registration procedure (notarised original with apostil);
Certificates:
i. A copy of the Free Sales Certificate (must be notarised and apostilled);
ii. A copy of the license of pharmaceutical manufacture (must be notarised and apostilled);
iii. A copy of the GMP certificate (must be notarised and apostilled);
iv. A copy of the Certificate of manufacturer registration in their own country (must be notarised and
apostilled);
v. The original Certificate of analysis of the drug and its active substance (must be signed and
stamped by manufacturer);
vi. A copy of the Certificate of trade mark (must be signed and stamped by the manufacturer);
vii. Information of registration of the drug in the country of manufacture and other countries;
28
Information and test reports:
i. Summary of method of drug manufacture (must be signed and stamped by manufacturer);
ii. The complete description of the quantitative and qualitative control methods with references to the
pharmacopoeia and specification (must be signed and stamped by manufacturer);
iii. Stability data of three drug series - by date;
iv. Spectral and chromatogram data;
v. Report on the pharmacological (specific) activity study substantiating the indications for use which
are described in the instruction;
vi. Test report of the drug toxicity (acute, sub-acute, sub-chronic, chronic toxicity);
vii. Test report of specific influences (carcinogenicity, mutagenic and teratogenic effects, embryo-
toxicity, allergic and local-irritative effects);
viii. Trial report of the medicine usage in the clinic;
ix. Copies of publications of medicine usage after its registration in the country of origin;
x. Pharmacokinetics and bioequivalence data;
xi. Summary information on side effects, in comparison with other analogous medicines, used for the
same indications;
xii. Instruction for use (must be signed and stamped by the manufacturer);
Samples and packaging:
i. Information on packaging materials: Certificates of packaging materials (must be signed and

stamped by the manufacturer);
ii. The colour and design of internal and external packages (Original and Russian version);
iii. Samples of active substance for quality control;
iv. Standard and referenced samples of the drug for the binding examination of quality (must be in the
standard package).
The MoH, at its own discretion, determines whether existing regulatory approval documents are
sufficient for an exemption of the drug from clinical and other testing in Russia before issuing a
registration certificate. Officially Russia does not recognise FDA and EU certificates.
The registration procedure is not transparent. Lists of registered drugs are published (but often
incomplete); however, information on drugs under registration and on the status of the registration
are not available. Confidentiality of the files provided by the applicant cannot be guaranteed and
the registration system has been unable to prevent counterfeit drugs and low-quality (sometimes
29
dangerous) products entering the market. To combat these problems, a new certification system
was introduced which applies to all domestically produced and imported drugs.
2.08 Certification Requirements
In April, 2002, Government Resolution #287 added medicines to the List of Products subject to
mandatory conformity assessment (certification) in Russia. This new certification system was
intended as a tool to combat counterfeit drugs as well as a means of toughening control over
imported drugs. Previously the drugs were subject to selective, batch-based certification at each
stage of their circulation in the market. Certificates for foreign drugs were issued based on quality
certificates provided by the manufacturers. The new certification system which came into effect
on December 15, 2002, requires total control and inspection of locally made and imported
medicines.
The Ministry of Health together with the State Standards Committee accredited 8 regional
certification centres located in Moscow, St. Petersburg, Nizhny Novgorod, Novosibirsk,
Yekaterinburg, Khabarovsk and Rostov-on-Don. Well-established Russian and foreign drug
manufacturers may undergo simplified certification procedures. All other companies must
undergo full-scale quality and safety testing prior to customs clearance.
The certification, required now for each and every batch of medicines entering the market costs
2,000 roubles (US$ 69) for domestic companies and 3,000 (US$ 103) for foreign firms.
Certificates previously required at each stage of the sales chain were replaced by a single
certificate issued when the product enters the market.
This new certification system led to additional costs associated with the storage of products in
bonded warehouses while tests were carried out. Testing could take up to several months and
these increased costs led to an increase in retail drug prices. Both the Association of International
Pharmaceutical Manufacturers (AIPM) and the American Chamber of Commerce in Russia have
been actively working to eliminate this administrative barrier for foreign manufacturers.
To expedite the certification procedure for well-established pharmaceutical suppliers, the MoH
introduced a new decree into existing certification rules. According to MoH’s new legislation, in
certain cases the number of trials and tests for quality can be reduced if the producer has
extensive experience and there have been no concerns regarding its products over a given
period of time. The MOH publishes a list of qualifying companies - around 60% of which are
foreign.
Vitamins and biologically active additives in the majority of cases are registered and certified in
the same way as ordinary drugs. However, imports of these products should be accompanied by
a certificate of hygiene which is issued by the Institute of Nutrition of the Russian Academy of
Medical Sciences. The hygiene certificate is valid for three years.
30
The new Law on Technical Regulations, which came into effect in the summer of 2003 was aimed
at reforming the existing certification system and will bring the process into compliance with
international standards by making a shift from obligatory certification to technical regulations,
clear-cut standards and manufacturers certificates of conformity. However, a lot of issues still
remain unresolved. According to the law, the transition period to the new system will take seven
years. In addition, there is a lot of uncertainty about which international standards Russia will
accept, which standards should be obligatory and which voluntary, and what the role of the
government body should be in development and enforcement of the standards.
2.09 Pharmaceutical Promotion and Advertising
Appropriate promotion and advertising of pharmaceuticals is of critical importance to the

development of the Russian healthcare system. However, promoting and adhering to strict ethical
standards when marketing pharmaceutical products is essential.
Two pieces of legislations regulate the marketing and advertising of pharmaceutical products: the
Federal laws “About Advertising” and “About Pharmaceutical Products”. These Laws state:
i. Only pharmaceuticals that have the appropriate license and which are registered in Russia can be
advertised;
ii. Advertising of prescription drugs as well as the promotion of medical products and technology can
only be placed in specialised medical and pharmaceutical publications.
Advertising of non-prescription products is allowed provided that the manufacturer produces

registration and license documents and that the advert clearly states all side-effects and does not
give any medical guarantees.
Pharmaceutical advertising should not position products as unique, the most effective or the
safest. It is also forbidden to make comparisons between similar pharmaceutical products.
Because pharmaceutical companies are barred from selling directly to patients and doctors and
cannot advertise medicines on mainstream television, radio and print media; as in other major
pharmaceutical markets, the industry relies on medical representatives to network with medical
professionals and institutions to create demand.
2.10 GMP
Most Russian pharmaceutical companies do not operate in accordance with GMP standards, a
fact that has prevented them from competing in the international arena.
31
With Russia's move toward WTO accession, control over the manufacturing process in
compliance with GMP standards became an important issue; therefore, the MoH mandated that
all Russian manufacturers should switch to GMP standards by January 1, 2005 or their licenses
would be recalled, a mandate that was supported by President Putin.
This drive to bring Russian manufacturers up to international standards has been hampered by
delays in writing and implementing new legislation which remains ongoing; in the interim the MoH
has developed a voluntary system of manufacturing process certification as a means of effective
control over production.
GMP implementation is an expensive process (costing at least $5ml) and not all domestic
producers can afford to pursue this strategy – thus smaller firms have two options: either to
become part of larger entity or to exit the industry. Consolidation in the industry is expected to rise
with a corresponding increase in competitive intensity in the marketplace. On upside, poor quality
producers will be eliminated boosting consumer confidence in locally produced products. The
strengthening of domestic production has public health implications and is expected to improve
the overall health situation in Russia.
Some of the larger Russian manufacturers have grouped together to drive through change.
Veropharm, Pharmsynthez, Nizhpharm, Otechestveni Lekarstva, Ufa-Vita, and the chemical-
pharmaceutical factory Akrihin comprise the newly-formed Association of Russian
Pharmaceutical Manufacturers (ARPM) whose mission is to develop the Russian pharmaceutical
industry. The association's goals include: bringing Russian producers up to GMP and ISO
production standards, actively fighting counterfeits, developing staff, supporting research, and
lobbying for changes in legislation.
The National Pharmaceutical Inspection unit (NPI) has recently been established. Plans are to
recruit 60 inspectors during 2005 and 2006 for GMP, and eventually 200 to 300 inspectors for
GDP.
32
3.0 Healthcare in Russia
3.01 Healthcare Policy
Historically healthcare in Russia has been the responsibility of the Russian Ministry of Health
(MoH). The MoH oversees the healthcare system and is responsible for central policy formation.
It is also in charge of initiating federal health programs, the management of federal level health
facilities, the training of medical personnel, health monitoring and planning, and the regulation of
pharmaceuticals and medical devices.
In theory, the provision of care is uniform throughout the country. In practice, wide regional
differences in the provision and scope of care exist, largely due to the high degree of autonomy of
provincial and municipal governments.
Major capital investments within the health sector are funded at State level although decisions
regarding the setting of budgets for overall health spending have gradually shifted to the regions.
The MoH supervises the Federal Mandatory Health Insurance Fund (FMHIF), which in turn
regulates the Territorial Mandatory Health Insurance Funds (TMHIFs).
Under current legislation every Russian citizen is entitled free access to a basket of basic
healthcare services including:
− Primary healthcare;
− Emergency healthcare;
− Preventative healthcare;
− Hospital care (via referral); and
− Pharmaceuticals used in in-patient care.
More than 100 million Russians are covered by free, State-financed medical insurance policies –
with one-third of the 2,000 Russian insurance companies working with the State on the
mandatory medical insurance programs.
The newly restructured Russian Ministry of Health and Social Development has announced
modernisation of the Mandatory Medical Insurance system as one of its primary goals. The
current Mandatory Medical Insurance system is inadequate and unable to guarantee access for
the population not only to quality, but in some cases to basic healthcare treatment.
The government believes that sound GNP growth supported by tax reform will provide sufficient
revenues for the Mandatory Insurance Funds. However, analysts predict that the Government
won’t be able to significantly increase funds available to cover free medical treatment. In the best
case scenario the government will be able to bring more order into the system and to create a
clear-cut list of free services guaranteed by the government. This list should be complemented
33
by a list of fee-based services. The government has actually admitted that it will have to take
measures to legalise private healthcare services so that the payment for these services is based
on invoicing and carried out through a cashier versus unofficial payments directly to doctors, a
common current practice.
According to the Constitution of the Russian Federation, all citizens have the right to receive free
healthcare. However this right in the majority of case exists in name only. Public health
programs for health promotion, disease prevention and family planning remain low priorities. Low
wages and inadequate training for primary care physicians who do not have full access to the
latest medical technology, results in an underdeveloped national healthcare infrastructure.
Because preventive care has never been an objective, the population has to resort to hospital-
based care, which generally makes the Russian healthcare system inefficient and very
expensive, precluding investments in other segments of the system.
Because public financing of healthcare is insufficient and voluntary health insurance coverage is
very limited and does not include serious, life threatening diseases, the Russian population is
forced to pay out of pocket to cover a significant portion of the cost of drugs and healthcare
services. In addition, doctors are interested in unofficial payments as their wages are generally
very low (in the region of $100-200 a month).
According to research conducted by the Independent Institute for Social Policy, one-third of the
families which need out-patient treatment pay for it out-of-pocket. At the same time half of the
families which need in-patient treatment are also forced to pay out-of-pocket. Wealthy citizens
spend significantly more out-of-pocket on healthcare than the less wealthy. Despite the common
myth that the major part of out-of-pocket money is paid unofficially to doctors under the table, the
research showed that only one-third is really paid under the table while two-thirds are channelled
through cashiers.
Unofficial payments are more common in in-patient hospitals than in out-patient clinics.
Generally, the level of legalisation of private services in the system is quite high, and informal
payments usually complement formal ones. There are several major categories of informal
payments:
− to medium level personnel for conducting procedures such as injections and so on;
− to personnel conducting diagnostic tests;
− to attending physicians who are assigned to supervise the patient for in-patient care;
− to operating surgeons.
Other categories include payments for drugs, supplies and medical devices. There are also
several channels through which drugs, supplies and devices are sourced by the patients: they
34
can be purchased from doctors, in pharmacies, middlemen or informally from the clinics
themselves.
The existing insurance system is definitely inadequate and chances that coverage by the
Mandatory Insurance Funds will increase in the foreseeable future are low. The entire system
needs massive reforms, but taking into account the realities, reform will only be able to clarify the
existing system of guarantees, their provision procedures, lists of free services and standards of
free healthcare.
As voluntary medical insurance is underdeveloped, out-of-pocket coverage of services will remain

significantly high. The government will be forced to legalise increasing portions of the healthcare
treatment by enforcing the list of paid services. Because paying doctors directly, both under the
table and legal payments has deep roots in Russian culture, analysts predict that it will be an
inevitable trait of the Russian healthcare system in the future.
Russia is an ageing nation with a demographic structure mirroring much of Western Europe.
Namely, the country has a highly urbanised population and declining fertility. In addition, there is
a high mortality rate amongst the working-age population. Problems with the existing under-
funded, under-equipped and overstretched health system will be subject to even further funding
pressure in coming years as diminishing numbers of workers have to fund a growing class of
pensioners.
The need to increase the cost effectiveness of healthcare delivery is now the main driver behind
the current primary care restructuring program taking place throughout the country. The main aim
is to decrease the number of low-budget and poor performing polyclinics and hospitals. Since
2004 there has been a 2.2% decline in the number of district medical centres resulting from the
closure of under-performing, small, suburban hospitals and general clinics. The overall efficiency
of the remaining polyclinics has increased and the number of emergency services remains
unchanged.
Healthcare provision for the elderly and handicapped remains poor, but the situation is being
addressed with a focus on home healthcare and further restructuring of the system to increase
the bed count in specialised centres thus giving these patients better access to priority
treatments.
3.02 Healthcare Spending
It is difficult to estimate total healthcare expenditure in Russia. Central government health

budgets are usually very small and inefficiently administered and it is not unusual for actual
government expenditure to be lower than the budgeted figure.
35
4
The share of healthcare expenditure in the consolidated budget of the Russian Federation has
increased over the past years; however, Russia still spends less than 4% of GDP on healthcare,
well below the OECD average of more than 8%.
Public spending makes up about three-quarters of total health spending.
Fig 3.02.1
Trend in Healthcare Spending

1000
490
160
122
100
112
Value 16.4 17.5

10 6.1
3
4.2
1
1998a 1999a 2000a 2001a 2002a 2003a 2004a
Healthcare Spending (Rb bn) Healthcare Spending (% of GDP)

Healthcare Spending (US$bn) Healthcare Spending (US$ per head)
Physicians (per 1000 population)
Source: US Census Bureau; Economist Intelligence Unit; a – actual
In December 2005, parliament approved the State healthcare budget for 2006 after a third and
final reading. Some 113.4 billion roubles (US$ 3.9bn) was set aside for the budget, of which 40.6
billion roubles (US$1.4bn) will be used specifically at the territorial (regional) level for much
awaited improvements. The president announced that healthcare spending will be increased by
60% in 2006. A planned increase in the rate of unified social tax from 0.8% to 1.1% will partly
fund the budget as well as profits from high oil prices.
The vast majority of health expenditure is funded through the public sector via the central budget
and a mandatory insurance system. The Federal Mandatory Health Insurance Fund (FMHIF)
oversees the insurance system and monitors the activities of the Territorial Mandatory Health
Insurance Funds (TMHIFs).
At a local level the TMHIFs were expected to appoint independent, private sector insurance
companies to purchase care and promote competition between third-party payers in a bid to
reduce the cost of healthcare. In cases where there are no private purchasing companies the
TMHIFs have the responsibility of establishing so-called branch funds (BMHIF) to act as short-
4
The consolidated budget consists of federal budget and regional budgets.
36
term insurers for the local population and make provision for those not covered under the
mandatory system.
Generally simple and primary medical services are the only ones provided free via the State
system, with public health policy of little help to those patients requiring a serious operation or for
those in receipt of long-term, expensive and/or sophisticated treatment.
The lack of coverage of the mandatory health insurance has resulted in the burden of healthcare
spending becoming increasingly the responsibility of employers or citizens themselves - with out-
of-pocket spending and private insurance driving growth in healthcare expenditure. Out-of-pocket
spending increased from 27.5bn (US$ 0.95bn) roubles in 2000 to 87bn (US$ 3bn) in 2004, and is
growing at a faster pace than total government spending. Moreover, the low income population
are becoming victims of this trend being forced to undergo longer, more painful and lower quality
treatments.
However, the situation is changing for those entitled to social benefits. At the beginning of 2005,
the government introduced a new system of drug reimbursement for these people called
Additional Pharmaceutical Provisions (DLO in Russian). Under the old system, people on benefits
were entitled to free healthcare and free medications; but due to a lack of financing, the system
did not work well especially on a regional basis. As a result, beneficiaries were unable to receive
medications and treatments in time or were finding hospitals and polyclinics being short of supply.
The new scheme - which provides compensation for medicines from a list of over 1,800 - has
seen cash payments to those on social benefits replaced via a discount-card system. These
patients can now receive timely medications by purchasing drugs in pharmacies and polyclinics at
discounted prices using the money equivalent of their benefits. The price differences are
reimbursed to the manufacturer by the government. A lot of pharmaceutical companies are now
fighting for the right to supply products under the DLO scheme.
3.03 Structure of the Healthcare System
In recent years, the healthcare system has gradually become more decentralised with more
responsibility afforded to the federal regions – although the MoH retains a considerable hold over
healthcare policy.
Russia has 89 federal units comprising republics, provinces and regions with smaller sub-
divisions at the local level. Federal health departments report to the MoH and are responsible for
funding over half of all healthcare expenditure. District Health Authorities (DHAs) play an
executive role at local level although, again, their remit varies greatly across the country.
37
The lack of the enthusiasm and motivation of many healthcare workers in Russia is noticeable
and can be attributed in the main to low levels of pay. The Ministry of Health estimated that the
average salary of a doctor in 2004 was 4730 roubles per month (approximately $169). There is of
course, much variation from region to region – for example doctors practicing in St. Petersburg
and Moscow receive around twice that amount, while doctors in smaller cities and rural areas
receive in the region of $100 - $135 per month. Salary also depends on the specialisation of the
doctor, experience and the institution in which he/she works.
Fig 3.03.1: Russian Healthcare System
The Ministry of
Health of the
Russian
Federation
Federal
Mandatory Health Federal Health
Insurance Fund Departments
(FMHIF)
Territorial Mandatory
Health Insurance District Health
Funds Authorities
(TMHIF)
Local Insurance
Funds
Sanatoriums
Health
Polyclinics Hospitals & Health Other
Centres
Centres
Health
Posts
There are rumours that low remuneration is leading to a decline in the number of doctors in
Russia. However, according to the Minister of Health - M. Zubarov - the actual number of doctors
38
in the country has grown by 10% over the past 8 years (from 550,000 to 610,000) – hence today
there are around 6 doctors per 1000 citizens. Statistics indicate that around 60% of physicians
are specialists, 20% work in the primary care sector and a further 20% hold administrative and/or
5
research positions.
3.03.1 Provision of Primary Care
The primary care network overlaps slightly with secondary and tertiary care. General practitioners
and other primary care personnel are employed by the facilities in which they work and
contracted indirectly to local government, which provides the core funding for primary care
services.
Some primary care facilities also secure contracts with local insurance funds in order to obtain
compensation for services provided to insured patients.
It should be noted that many patients in Russia have no primary care physician. Patients have the
right to visit any specialist (hospital or polyclinic) without any referral from a GP or nurse.
3.03.11 Health Posts
Often found in rural areas, health posts offer immunisation services, basic health examinations
and routine examinations. Health posts often treat minor injuries and make home visits or offer
emergency services.
3.03.12 Health Centres
Generally staffed by a general practitioner, a paediatrician and often a gynaecologist, health

centres offer a range of primary health services including the treatment of minor ailments and the
supervision of chronic conditions. Physicians at health centres, who are supported by nurses, are
permitted to prescribe pharmaceuticals.
Health centres offer a limited supply of beds, which can be used to carry out minor in-patient
procedures.
3.03.13 Polyclinics
Polyclinics offer first line treatment for acute and chronic conditions and longer term chronic care.
Staff at polyclinics comprise of a number of general physicians supported by auxiliary staff, as
well as other specialists in areas of cardiology, oncology and obstetrics/gynaecology. Patients are
assigned to polyclinics by postcode.
5
The World Market Analysis, Russia, Healthcare Infrastructure
39
3.03.2 Hospitals
According to the Russian statistics agency (Goskomstat), there are around 10,700 hospitals
throughout the country staffed with highly trained personnel. However, many hospitals and other
facilities would require heavy capital investment and increased funding for modern diagnostic and
medical equipment to bring them in-line with Western standards.
There are a few thousand private hospitals, clinics and other health facilities (around 3,000),
which are located in larger urban areas and offer Western standards of care. Many private clinics
and hospitals are costly facilities with high-quality equipment and personnel established by
Western firms. A large number were established to cater for diplomatic personnel, businessmen
and ex-patriots, although the number of Russian patients has increased gradually over the last
decade. Nevertheless, establishment of private health facilities remains complex due to
bureaucracy and licensing issues.
3.03.3 Health Institutions
A feature of the Russian healthcare system is the existence of huge specialised institutions
dedicated to a specific area of medicine, for example the Institute of Oncology, the Research
Institute of Cardiology, the Vivalov State Optical Institute, etc. These institutions are well
respected and are considered to provide the best of care; institutions also provide outpatient
facilities, conduct research and are usually involved in teaching.
3.03.4 Sanatoriums and Health Resorts
There are many sanatoriums and health centres in Russian that have few analogues in the rest of
the world (aside from Germany). Here patients are treated using only natural medicines and
therapies. Health centres and sanatoriums have become more popular over the last few years
due to the stabilisation of the economy and rising disposable income. These facilities are mostly
used for:
− prophylactic treatments;
− recovery support; and
− for those undergoing long-term treatment for chronic diseases.
There are more than 2.4 thousand sanatoriums spread around the country providing around 450
thousands beds – the majority being located in the wealthier, European part of the country.
According to a report issued by the MoH, the number of beds has been on the increase thus
suggesting growth and strengthening of this particular sector of the healthcare system. Statistics
40
shows that in 2004, over 5.7million patients received treatment at various health resorts
compared to around 5.3 million in 2003.
Because health resorts and sanatorium are so popular amongst the Russian population, there
has been much investment in constructing new centres and re-developing existing facilities – this
activity has also attracted much foreign investment. The number of private sanatoriums and
health resorts is also on the rise.
According to Rosstat (Russian Statistics database); in 2004, 38% of patients treated in these
centres and resorts were sponsored by government, 12% were sponsored by their employer and
22% of patients financed their stay as an out-of-pocket expense.
3.04 Health of the Nation
3.04.1 Population Demographics
For much of the last decade, the country has suffered a population decline unprecedented for an
industrialised state outside of wartime. Russia’s population declined from 149 million in 1992 to
143 million in 2003, and in the next 50 years it could fall by 30% to 100 million. With rapid ageing
of the population, this fall is increasing the dependency ratio (the ratio of the economically
dependent part of the population to the productive part) and producing an economic burden that
Russia may not be able to afford, given that its gross domestic product (GDP) is the lowest of all
the G8 countries (the eight most industrialised countries).
Fig 3.04.1
Source: EarthTrends 2004, Country Profile, Russia
There are many contributing factors to the population decline including: poor diet, high alcohol
consumption, and the general average-to-low standards of living and lack of government benefits
outside major cities. The latter being the major concern discouraging people from starting a
41
family. However, because the Russian economy is developing fast, small cities and towns are
becoming wealthier as more and more employment opportunities are created.
3.04.2 Life Expectancy and Causes of Death
Russia is one of the few developed countries where life expectancy has fallen in recent years.
Massive regional variations in life expectancy exist. The situation is at its worst in the Far North
and Far East, as well as in many rural areas due to both environmental conditions and low
incomes. Russia's total life expectancy of 66 years lags behind that of Japan by 16 years, the
European Union by 14 years, and the United States by 12 years. High mortality and morbidity
from non-communicable diseases, along with a low birth rate, mean that Russia’s overall
population is rapidly becoming smaller and sicker. The situation is compounded by the stresses
related to economic transition - collapse of the social safety net, lack of strict road safety measures,
poor diet, and sedentary lifestyles. Furthermore, when the burgeoning epidemics of HIV infection,
multiple drug resistant tuberculosis, intravenous drug use, sexually transmitted disease, and hepatitis
C are also taken into account, the severity of Russia's health crisis is magnified substantially.
Mortality for Russian men substantially exceeds that in countries with similar per capita income
levels. Within Russia, mortality varies fourfold between regions, and differences in life expectancy
can be as much as 18 years. The picture is different for women, who live about 14 years longer
than men – much greater than the average gender gap of eight years found in other G8 nations.
Morbidity and mortality from non-communicable diseases and injuries - the leading causes of
death - in Russia are three to five times higher than average rates in the European Union.
At 994 per 100 000, Russia has one of the highest death rates from cardiovascular disease in the
world, accounting for 52% of all deaths nationally each year. Similarly, the rate of traffic injuries,
at 20.6 per 100 000, is double that in EU and G8 countries, and the rates for cancer mortality,
homicide, and suicide far exceed EU levels.
Fig 3.04.2: Causes of Death in Russia

Causes of Death
Per 100,000 citizens
2001 2002 2003 2004
Total 1564.4 1627.9 1636.5 1596
Includes:
Circulatory diseases 869.4 913 927.5 895.4
Cancer and cancer related 204 204.5 202.5 201.7
problems
42
External causes 230.1 236.8 233.6 227.5

Out of which:
Alcohol poisoning 28.5 31.2 31.4 29.7
Road accidents 28.3 29.1 30.3 29.1
Suicide 39.7 38.6 36.1 34.3
Murder 29.8 30.9 29.1 27.3
Respiratory disease 65.9 70.5 70.5 64.6
Digestive disorders 482 52.7 56.8 59.3
Certain infections 24.5 25.8 25.9 25.7
Includes:
Tuberculosis 20 21.8 21.9 21.4
Source: World Market Analysis, Healthcare, Russia, 2004
In 2003, deaths from cardiovascular disease, cancer, and injuries accounted for 15.2 million lost
years of potential life. Around 75% of deaths and 46% of the disability adjusted life years (DALYs)
in Russia can be attributed to high blood pressure, high serum cholesterol, and tobacco use. Six
out of 20 men smoke, but alcohol is also a big killer, accounting alone for 16.5% of the total
DALYs lost in 2002.
3.05 Disease Prevalence
All patients with diagnosed pathologies are registered in regional databases - every year there
are around 200 million new disease registrations, the most frequent being:
− respiratory disease (26%),
− cardiovascular disease (11%), and
− digestive disorders (8%).
Moreover, every year around 1million people become registered as disabled. Lifestyle ailments
like heart diseases and diabetes are on the increase.
Fig 3.05: Number of Registered Patients, 2004

Disease Type Total Number of Registered
Patients
Cardiovascular (per 100,000 citizens) 21,840
Malignant tumour & other oncology (per 100,000 326

citizens)
Tuberculosis (per 100,000 citizens) 81.3
43
Diabetes 2.3ml
Drug Addiction 342,000
Alcoholism >3.5ml
Mental Disorders 7.7ml
Sexually Transmitted Diseases >730,000
HIV/AIDS (estimated) 860,000 (>1.3ml)
Hepatitis >5ml
Source: The Russian Ministry of Health statistics
3.05.01 Cardiovascular Disease
Over the last 40 years cardiovascular disease (CVD) and stroke mortality rates in Japan, Western
Europe and North America have fallen very sharply. In the US, for example, the age-adjusted
decline between 1965 and 2000 was over 56%. Russia, by contrast, suffered an explosion of
cardiovascular deaths over the same period. In 2004, 285,000 adults were newly registered
bringing the total number of patients registered with cardiovascular disease to 24.8 million in this
year.
The increase in cardiovascular mortality has been attributed to stress brought on by the social
and economic changes; alcoholism, which is on the rise in both men and women; tobacco
smoking and a more sedentary lifestyle with very little focus on any exercise other than walking.
Because many of the elements associated with the surging mortality rate are connected to social
behaviour and the need for education, there is little hope that the government, with its regionally
limited medical infrastructure, will be able to incorporate enough changes to slow or stop the
trend in the near future. However, improvements in the quality of diagnostic procedures have
resulted from the development and implementation of regional healthcare programs.
Fig 3.05.01: Number of Patients with Circulatory Diseases

Disease groups and other illnesses Absolute Numbers Per 100,000 citizens
2003 2004 2003 2004
Blood circulation disorders 22,671,358 24,754,099 20216.4 21 841.6
Hypertension 6,945,151 7,883,877 6,193.1 6,956.3
Ischemic heart disease 5,867,346 6,262,714 5,232 5,525.90
Out of which:
Stenocardia 2,429,577 2,639,814 2,166.50 2,329.20
Acute myocardial infarction 163,776 166,803 146 147.2
44
Repeated myocardial infarction 24,471 24,305 21.8 21.4
Complications following myocardial infarction 2,817 2,812 2.5 2.5
Other major ischemic conditions 45,321 50,201 40.4 44.3
Cerebro-vascular disease 5,603,262 6,169,500 4,996.50 5,443.60
Endarteritis, thromboangitis, obliterating 435,794 471,460 388.6 416

endarteritis
Other 3,819,805 3,966,548 3,406.20 3,499.8
Source: The Russian Ministry of Health statistics
3.05.02 Cancer
A major unmet need in Russian healthcare is the development of a system that allows for the
early detection and diagnosis of cancer. Currently, a large percentage of different cancers are
only detected at very late stages (III-IV):
− 69.5% of mouth and throat cancers;
− 57% of intestinal cancers;
− 39.5% of cervical cancers.
Patients themselves are partially to blame - around 30% of patients only present at late stages
(there exists a mentality of not wanting to “bother” the doctor).
Surgery is the most popular treatment for malignant tumour (44. 3% of cases). Around 18% of
malignant tumours are treated by radiotherapy. Drug treatment is quite rare and only used in
about 6% of cases - on average only around 2.6% of cases receive chemotherapy simply
because the money is not available to pay for it.
Fig 3.05.02: Number of First-Time Patients with Malignant Tumour (per 100,000 citizens)
Localisation Per 100,000 citizens % Change*

1999 2004
Total malignant tumours 302.5 326.3 6,9
Oesophagus 5.4 5 -
Stomach 33.5 30.8 -8
Colon 17.4 20.3 16.5
Rectum 14.2 15.9 11.6
Pancreas 8.9 9.3 4
Trachea, bronchial, lungs 43.2 41.2 -6.1
45
Skin - malignant melanoma 4 5.1 24.2

Other malignant skin tumours 31.6 37.8 16.9
Kidney 8.8 10.7 21
Bladder 8.1 8.7 8
Thyroid gland 4.8 5.8 17.4
Lymphatic and haematopoietic tissue 13.3 15.2 13.9
* The percentage change has been adjusted for disease dynamics for the 5 year period
Source: The Russian Ministry of Health
3.05.03 Tuberculosis
Tuberculosis remains a problem in Russia; however, a new and more thorough system has been
put into place to control the spread of the disease through earlier diagnosis and more effective
treatments. As a result, there has been a significant reduction (8.4%) in the tuberculosis epidemic
over the past 4 years. Improvements in the standard of living in the poorer areas are needed to
offer the hope of further stabilisation of the tuberculosis situation in the country.
3.05.04 Diabetes
Russia occupies third place in the ‘top 10’ of countries with the highest number of people with
diabetes in the world – obesity is on the increase, unhealthy diets high in fatty foods and alcohol
over-consumption all contribute to health complications in the Russian population.
In 2004, there were 2.3 million patients registered with the diabetes, of which 260 thousands were
registered with type I diabetes; but according to the International Diabetes Federation (IDF), it is
currently estimated that diabetes is present in approximately 9.613 million people - 90% of which
have diabetes type II. Such a large number of unregistered cases can be attributed to a lack of
awareness on the part of people with diabetes and of healthcare professionals. In general, most
cases of diabetes are only detected by general practitioners when patients present with other
health concerns.
46
Fig 3.05.041: Prevalence of Diabetes Type I in Selected Russian Regions
Bryansk Region 66.5

Mari-El Republic 75.3
Kalmikija 78
Tambov Region 102.6
Nizhny Novgorod Region 112.2
Perm Region 122.2
Moscow Region 132.1
Komi Republic 156.2
Orlov Region 175.4
Tver Region 185.9
Saratov Region 249.1
0 50 100 150 200 250 300

Number of patients with Diabetes Type I per 100 000 people
Source: The Ministry of Health of Moscow region, Diabetes epidemiology report, 2004
Fig 3.05.042: Prevalence of Diabetes Type II in Selected Russian Regions
Tver Region 112.1

Bryansk Region 579.5
Orlov Region 685.4
Kalmikija 714.9
Mari-El Republic 817.8
Tambov Region 839.5
Perm Region 1242.9
Komi Republic 1266.1
Saratov Region 1345.1
Nizhny Novgorod Region 1671.9
Moscow Region 1744.7
0 200 400 600 800 1000 1200 1400 1600 1800 2000
Number of patients with Diabetes Type II per 100 000 people
Source: The Ministry of Health of Moscow region, Diabetes epidemiology report, 2004
3.05.05 Drug Addiction and Alcoholism
Another burden on the health system is the spread of addictive disorders - around 2.4% of the
total Russian population are affected. Alcoholics account for the majority (over 84%) and in 2004,
it was estimated that about 70% of men and 47% of women were drinkers; with spirits comprising
three quarters of the total alcohol consumption. However, the alcohol addiction growth rate is
47
reported to be slowing down – 8.4% in 2003 compared to 4.3% in 2004. Psychological diseases
caused by the alcoholism are also on the increase.
Drug addiction is also a growing concern – with the majority (88%) being addicted to opium.
The total number of hospitalisations due to addictive disorders has been on the increase and
amounted to 707 thousand in 2004.The increase was mainly driven by the rise in hospitalisations
due to alcoholic connected disorders (1% increase).
3.04.06 Mental Disorders
In 2004, there were over 7.7 million patients registered with mental disorders - most of those
being over 18 years of age, but a significant number of 0 -14 year olds (>800 thousand) also
suffer with some form of psychological disease. Overall, the mental health of Russia's population
has deteriorated considerably over the past decade and the number of newly registered patients
is on the increase (4.9% increase from 2003 to 2004).
Not all people have access to psychiatric assistance in Russia. The reason for that is the high
number of regions, low population density, and the low level of development of transport
networks. In addition, psychiatric clinics receive only about 50% of the funding to which they are
entitled. At the same time, the ongoing State program for the development of psychiatric services
is aimed at "making psychiatric assistance available to the wider population." To achieve this
goal, it is planned to open psychiatric rooms in polyclinics and psychotic sections in hospitals.
However, these plans are not being implemented as fast as wished to date.
3.04.07 Sexually Transmitted Disease (STD)
In the 1990s, Russia experienced a rapidly increasing incidence of syphilis and gonorrhoea -
sterility caused by STD is also the hidden factor behind the collapse of Russia's birth rate. But
STDs are now on the decline – the number of registered patients is almost 3 times less than in
2001, standing at around 730 thousand in 2004. However, experts do not believe that this reflects
reality. The trouble is that the official figures are based on records generated by the system of
state registration of diseases inherited from Soviet times. The recent rapid expansion of
commercial medical services offering anonymous treatment without registration removes an
increasing proportion of cases from the statistics. Moreover, even where registration does still
occur it tends to be at a later stage of the disease, as people delay seeking treatment for
economic reasons - in particular, out of fear of losing their job if their employer finds out that they
are syphilitic. This shift also biases the figures downward.
48
The number of people carrying and suffering from syphilis in Russia remains very high - more
than 10 times greater than in Europe – and the younger the age group, the faster the spread of
syphilis within it. Thus between 1992 and 1998 the prevalence of syphilis increased by 5.5 times
among adults, but by 17 times among children under 15. Unlike the figures for adult syphilis,
those for child syphilis have continued their upward trend in the last few years, presumably
because the economic motives for concealment do not apply to children. The incidence of
congenital syphilis, which is largely preventable, is high because many infected pregnant women
are treated inadequately or too late in their pregnancy.
There is also a developing concern in the country about treatment resistant Chlamydia
trachomatis and human papilloma virus (HPV). Alternative treatments to antibacterial drugs need
to be approved and included in treatment lists for Chlamydia and there is a growing need for the
early diagnosis and treatment of HPV.
3.04.08 HIV
Fig 3.04.08: HIV Registrations
Number of new HIV cases registered in Russia

60
52,342
50
39,699
33,000
Thousands
40
30
20
10
0
2002 2003 2004
Source: UNAIDS
Russia has one of the fastest growing Aids epidemics in the world, with 100 new infections every
day and accounting for 70% of all cases in the Eastern Europe and Central Asia region. There
were an estimated 860,000 people living with HIV at the beginning of 2004, but it is widely
acknowledged that this figure is vastly underestimated and there could be closer to 1.3 million
HIV infected individuals in the country.
Many HIV/AIDS cases are among the young (18 – 29 years) and the problem is no longer limited
to injecting drug users. Increasingly, women and their infants are being affected (roughly 40% of
all new registered cases of HIV in 2004 were women, most of who are of childbearing age).
49
The number of new HIV cases being reported is falling however, with 88,577 new cases reported
in 2001, 52,349 new cases in 2002 and 39,699 cases in 2003. This reduction could be due to
fewer people being tested, or it could be that HIV prevalence rates have reached saturation point
amongst injecting drug users, or it could be that there is a real reduction in the growth rates of
HIV amongst adults resulting from heavy anti-AIDS campaigns.
3.04.09 Dermatologic Diseases
The prevalence of dermatologic disease is considered an epidemic. Over the past 10 years there
has been a 16% rise in dermatological disorders with almost 9 million dermatologic patients
registered in 2004 – this equates to 6% of the total population and around 7% of all diseases.
This figure continues to rise.
3.04.10 Injuries, Poisoning and Other Accidents
Over the last few years the number of injuries, poisoning and other accidents has been constantly
rising. In 2004, the absolute number of injuries was in excess of 13 million. Out of every 100
people, 9 -10 are receiving injuries that require medical help or even hospitalisation. The number
of injuries/poisoning amongst the teenaged population is the greatest being 6% more than that
amongst children and 12% more than that amongst adults.
3.04.11 Hepatitis
There is a high incidence of infectious disease in Russia, hepatitis in particular. In 2005, the
healthcare system was stretched by another hepatitis A outbreak. This event was associated with
the consumption of contaminated food and liquids; some even claim there to be terrorist links.
The rates of hepatitis A decreased during the 1990s thanks to improvements in water supply and
better quality food stuff; but the rates of hepatitis B and hepatitis C increased steadily. Reasons
may be a sharp increase in intravenous drug use, lack of hygiene, and high-risk sexual
behaviour. Half the patients with acute hepatitis B and hepatitis C are 11 to 30 years of age. Mass
vaccination of children against hepatitis B and support for the development of a vaccine for
hepatitis C are needed to control these diseases.
Yet the population does not participate in vaccination programs actively; the reason being that in
most cases they have to fund it at their own expense, and a vaccine against hepatitis costs about
$100 which not everyone can afford. Nevertheless, the fact that vaccinations will be funded by the
State from 2006 will help to improve the situation.
50
It is estimated that about 200 thousand carriers of the hepatitis virus and about 75 thousand
people with chronic hepatitis are identified in Russia every year. In 2004, in excess of 5 million
people were registered with hepatitis in Russia - with hepatitis B forming around 10% of cases,
and hepatitis C, 80% of cases. The numbers of newly registered cases and of chronic forms of
the disease are growing.
The incidence of all forms of hepatitis vary on a regional basis and depend largely on the
availability of emergency and hospitalisation services, as well as the underlying socio-economic
conditions.
51
4.0 Clinical Trials in Perspective
4.01 History of Clinical Trials in Russia
Large-scale clinical trials have been conducted in Russia since 1989. The major driver for the
increased interest by Western pharmaceutical companies to include Russian sites in multinational
projects has been the enormous enrolment potential which offers a solution to the competition for
patients among clinical trials in North America and Western Europe. There are a large number of
hospitals that are huge and highly specialised, as though they were specifically designed for
clinical research. These medical centres may have modest interiors but this does not preclude
their clinicians from doing quality work.
However, back in 1989 when interest in Russia first began, regulators and the medical research
community were largely unaware of good clinical practice (GCP) and clinical trials were not
governed by any regulations – anyone could do anything. There was the Constitution of the
USSR, which protected patients’ rights, but that was it, ethics committees had yet to be
established.
The Clinical Pharmacological Research Institute (CPR) carried out the first translation of the GCP
guidelines in 1989. A decade later in 1999, the official text of ICH GCP in Russian was published.
That same year the Russian language version of GCP - National Standard OST 42-511-99, a
close translation of ICH GCP - became a part of national regulations on clinical research. The
whole process took so long because domestic regulators did not want to accept international
rules; instead, they wanted to produce their own national GCP guidelines in support of Russian
drug companies who did not have the resources to conduct well-designed clinical studies. In the
interim, double standards operated – GCP for Western pharmaceutical companies, and Russian-
GCP for poor domestic drug manufacturers; until in 1999, when it was finally agreed by a new
generation of Russian officials that it was not wise to continue operating the double system.
At the same time, at the end of the 80’s, no customs regulations were in place – therefore, any
drug could be imported. It was up to each customs-house officer to decide what could cross the
border. The situation was even worse in the field of communications. Faxes and copy machines
were prohibited by law. There were no automatic phone connections, no private foreign economic
activity, no hard currency transfers from abroad, and no money exchange points. Foreign
pharmaceutical companies had no representative offices in Russia.
Things have changed drastically, and nowadays an established system of national regulations for
drug development and clinical research exists, with clinical trials being approved in a way similar
to that in the West.
More than a hundred foreign pharmaceutical companies are now accredited in Russia, mostly
52
located in Moscow. In addition, many international companies which do not have representation
in Russia still conduct clinical trials there. Many major CROs have opened representative offices
and in addition, there are several local CROs. Moreover, some federal medical and science
institutions, while undertaking scientific research projects and developing new technologies, also
engage in large programmes for helping practical healthcare – such as clinical research and drug
discovery.
Fig 4.01.01: Medical Institutions Involved in Clinical Trials in Russia, 2005
Educational Clinical hospitals

institutions, 29.20% and outpatient
clinics, 39.20%
Scientific
institutions, 31.60%
Source: www.regmed.ru
Companies involved in the organisation of clinical trials in Russia include: representative offices
of pharmaceutical companies; representative offices of the international CROs; and CROs of
Russian origin.
Fig 4.01.02: Companies Involved in Clinical Trials in Russia 2000-2005
55%
46%
42%
35% 37%
29%
25%
21%
10%
2000-2003 2004 2005 (Q 1-3)
Local pharmaceutical and biotechnological companies

International pharmaceutical and biotechnological companies
Contract Research Organizations
The number of these companies has grown amazingly fast during the last few years, especially
the numbers of Russian CROs.
53
4.02 Growth in Trials
The number of clinical trials conducted in the country has increased considerably over the past 10
years and this trend continues with on average close to 100 new trials being approved every
year. Interestingly, the number of trials outsourced to specialised CROs is also growing allowing
international companies to benefit from local recourses, intelligence and expertise.
Fig 4.02.01: International Clinical Trials Approved in Russia, 1992-2005
250
200
150
100
50
0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
(Q1-3)
Source: www.regmed.ru/
The slight decline in the number of clinical trials approved between 2003 and 2004 can be
attributed to the increase in the number of mergers and acquisitions in the healthcare sector
worldwide at that time. Post-integration companies focus on internal reorganisation – thus we see
an increase of number of trials in 2005 as these new entities resume normal operations.
54
Fig 4.02.02: Multi-Centre Clinical Trials in Russia by Therapy Area, 2005
Gastro-
enterology,
7.6% Infectious
Other, 20.0% diseases,
10.6%
Endocrinology, Cardiology,
9.9% 14.7%
Rheumatology,
6.7%
Pulmonology, Oncology,
5.6% Psychiatry, 15.8%
9.1%
4.03 The Russian CRO Industry
When clinical trials first came to Russia, foreign pharmaceutical companies had no
representatives in the country. Thus, they started to work through local groups of researchers.
The first group was based in the Research Institute of Cardiology in St. Petersburg which later
became the CPR Institute.
The first CROs began to appear around 1990 - the first three were:
− The Clinical Pharmacological Research (CPR) Institute (St. Petersburg);
− PSI Pharma Support Inc. (St. Petersburg); and
− Innopharm (Smolensk).
The role that these first three played in shaping the clinical research market in Russia cannot be
underestimated. They translated GCP guidelines and introduced them to regulators, medical
professionals and the community; implemented the most reliable communication technologies;
established data management systems; and implemented modern methods of statistical analysis.
They created comprehensive standard operating procedures (SOPs) and invented effective
project management technology.
In the early days, there was no competition – each CRO worked in its own niche. The second half
of the 1990s was marked with rapid development of local CROs as well as an invasion of
international ones.
55
There are currently around 10 international and domestic CROs in Russia – the largest
domestically owned companies include: (for a more detailed profile see the Appendix)
− PSI Pharma Support - now the largest CRO in Russia and CIS running trials across 11
times zones, from Kaliningrad in the Far West to Yuzhno-Sakhalinsk in the Far East;
− CPR Institute, now called Evidence-CPR - the first CRO to conduct multinational clinical
trials in Russia and Eastern Europe. With offices in St. Pertersburg, Moscow, Siberia, the
Republic of Georgia, and Ukraine the company has moved its corporate headquarters to
California, USA in order to better serve study sponsors;
− Innopharm Ltd – founded by the faculty members of the Department of Clinical

Pharmacology of Smolensk Medical Institute, originally as an SMO. InnoPharm has since
expanded into an independent CRO offering a wide range of services across Russia and
Ukraine;
− Congenix – based in Moscow, this independent CRO operates in Russia and in the
countries of the former USSR;
− RCT Global - established by a group of research professionals in 2001, the company is

located in St. Petersburg and performs clinical research across the breadth of the
Russian Federation, in the former Soviet Republics and in Eastern Europe;
− OCT (Outsourcing Clinical Trials) - a CRO with head office in St. Petersburg, Russia. The
company was founded to provide services to Pharmaceutical companies interested in
conducting clinical trials in Russia, Ukraine, Baltic States, Bulgaria and Eastern Europe. At
the beginning of 2006, OCT expanded its operations into Latvia and Lithuania.
The main difference between Russian CROs (including the Russian offices of international
CROs) and CROs in other countries is that in Russia all clinical research associates (CRAs) are
medical doctors. The CRO is able to pay much higher wages than government owned medical
institutions, and can therefore select the best, most highly experienced professionals. Many
CRAs speak fluent English, which helps a great deal in communication between investigators and
sponsors, in monitoring, in reporting, and so on. Russian CRAs are trained in GCP, and many are
also members of international professional organisations such as DIA and ACRP.
Russian CROs provide the full spectrum of services including regulatory submissions, medical
monitoring, project management, handling clinical trial supplies, reporting, medical writing, and so
forth.
4.04 Why Conduct Clinical Trials in Russia?
Russia ranks highly among other Eastern European countries on the availability of basic medical
resources for conducting clinical trials.
56
Fig 4.04.01: Medical Resources in Selected Eastern European Countries
Country Major Cities Physicians per Medical Hospital Beds per

1000 inhabitants Universities 1000 inhabitants
Czech Republic 1 3.4 5 8.6
Hungary 1 3.6 4 8.4
Latvia 0 3.2 2 8.7
Lithuania 0 3.8 2 9.2
Russia 13
4.2 55 13.1
(European part) (9)
Slovak Republic 0 3.2 3 8
Ukraine 5 4.6 18 10.4

Source: the Imformer GmbH, Newsletter, June 2003
At present, most clinical trial work is conducted in Moscow and St. Petersburg (owing to better
infrastructure, higher population and the presence of major research centres); while the well-
equipped academic sites located to the east from the Ural Mountains in Siberia to the Far East
(rich regions due to their enormous natural gas and oil resources), remain largely underused.
Fig 4.04.02: Potential Russian Sites
4.04.01 Benefits of the Post-Soviet System
The ‘Soviet’ structured central healthcare system created large medical institutions specialising in
specific therapeutic areas. These institutions, both general and therapeutically aligned, have large
patient pools to draw from making enrolment in clinical trials very accessible to the patient and
rapid for the sponsor.
57
In addition, many of the medical practices in Russia call for hospitalisation, when in the West the
same treatment may be done in an outpatient setting. Hospital costs, as part of standard practice,
do not add to the trial expenses. The additional level of attention is helpful in informing the
patients of their obligations in the trial and providing the opportunity to more closely monitor and
instruct the patients early on, thus helping to facilitate compliance.
In summary benefits of post-Soviet system include:
− A centralized medical system with a chief specialist in each major area;
− Huge specialized research centres, for example:
Cardiology
Oncology
Infectious disease
Psychiatry
− Giant multipurpose hospitals in regional centres;
− Large number of hospitals in cities (> 50 in St. Petersburg alone).
4.04.02 Access to Investigators
Access to experienced, highly motivated and compliant investigators:
− Minimum of 6 years in medical school, 2 years in residency, 3 years of specialisation;
− Licensed every 5 years by the authorities;
− Certified in GCP and experienced in clinical trials;
− At least 40% are University professors, around 60% possess PhDs and at least 90% have
more than 10 years of professional experience;
− Many speak English fluently, attend international conferences, and are members of
European and American professional societies.
Investigators are highly motivated to participate in multinational clinical trials for several reasons.
First, taking part in a global project gives them an opportunity to interact, directly or indirectly, with
the international medical community from which they were almost entirely excluded during the
Soviet era.
Second, Russian clinicians are scientifically curious and the pioneering essence of a new drug
always presents an additional incentive for them.
58
Third, most investigators are very eager to get familiar with new quality standards and
methodological approaches. This is why the GCP concept is normally readily accepted by
clinicians who have had no prior practical experience with the guidelines.
Finally, the financial component of sponsored clinical trials is extremely important. It is no secret
that many physicians in Russia are grossly underpaid. Understandably, investigator fees
represent vital support to both investigators and ancillary personnel.
4.04.03 Cost Saving Opportunities
Man-hours are much less expensive in Russia than in the West, so labour can be found at
significantly reduced rates. Although some Russian CROs have begun to globalise, and are
realising the financial responsibilities of that growth, there are still many local CROs that can
provide significant savings in clinical fees. Experienced regional CROs can provide savings
upwards of 20 - 50%, compared with those in the West, while still providing experienced MDs as
project managers and monitors.
4.04.04 Access to Patients
The demographic setting in Russia can be termed as ‘fast recruitment-friendly’. Approximately

150 million people live in the Russian Federation and about one half of those live in town. There
are more than 10 cities in Russia with a population exceeding one million people. Almost all
patients with diagnosed pathologies are registered in databases managed by their regional
healthcare administrations; and data on newly diagnosed patients is collected within these
databases on a regular basis - at least annually.
Fig. 4.04.040: Patient Reservoirs, 2002 (millions)
Russia, 150 Sour

ce:
EVI
DEN
European Newly
CE
Independent European Union,
States, 80 394 Clini
cal &
Non-members, 34 Phar
mac
eutic
al
Candidates to EU,
168 Res
earc
h, 2003
59
The region offers huge numbers of treatment naïve patients particularly in oncological,
cardiovascular, neurological, respiratory and infectious diseases. As a result, Russia often
participates in multi-national mega-trials contributing thousands of patients.
This huge and well-educated patient population participates in clinical trials because of a specific
medical need. These patients tend to make all the planned appointments and comply with
treatment as directed – they take all the required medication, they fill in the questionnaires and
diaries, and only very rarely do they withdraw their consent. Unlike Western patients, Russian
patients hardly ever move from place to place. They usually spend their whole lives in the place
they were born. That is good for research and follow-up purposes.
Fig. 4.04.041: Profile of Russian Patients
Academic Degree,
5% Secondary, 7%
University, 38%
High School, 50%
Source: S.Varshavsky et al., GCPJ 2002; 9 (11):11-14
4.04.05 Fast Recruitment Rates
The pace of patient enrolment is rapid, averaging between 2 – 4 months ahead of sites in more
developed areas. Patients in Russia are both eager to participate and extremely compliant. Given
the overall healthcare situation of Russia, it is not difficult to understand why patient enrolment
continues to be so strong. Typically, the treatment provided in clinical research is better than the
standard of care available through the national health services. The protocol requirements for
complete physicals and more personal interaction with the investigator may in itself offer incentive
enough to join a trial. Combined with the additional incentives of Western medicines and
therapies, it is easy to see why the prospective patients are excited to participate.
60
Individual patient benefits combined with social factors (a centralised healthcare system, a lack of
competition due to the low number of clinical trials in Russia) makes for a fast recruitment
environment.
4.04.06 Patient Compliance
Many patients in Russia require specific treatments that are beyond their reach. Participation in
clinical trials is a good opportunity for them to get the appropriate long-term treatment because it
offers patients free access to:
− The best medical facilities
− The best diagnostic methods;
− The best physicians; and
− Potentially the best medications (if it is not a placebo).
Their only cost is to be compliant, which they consider more than acceptable. The high
educational level in general with no illiteracy means that there is a high level of understanding in
the nature of research and the need to follow treatment regimens. In addition, the combination of
a greater respect for authority compared with the West and a settled way of life provides an
explanation for a higher level of compliance among patients in Russia. Cultural differences
between East and West result in:
− Higher acceptance rates;
− More disciplined patients;
− Increased compliance with physician instructions;
− Low drop out and low lost to follow-up rate.
It is worth mentioning two other cultural differences: firstly Russian patients use alternative
medicine, particularly physical therapy, herbs, acupuncture, and massage far more frequently
than their Western counterparts; and Russian doctors use autopsy several times more frequently
than in the West.
4.04.07 Quality of Work
Despite rumours and existing prejudice, Russia remains a solid and reliable arena for conducting
clinical trials – cases of fraud in general, have been found to be much less frequent than in the
United States.
61
The European Forum for GCP (EFGCP) supports initiatives for developing better conditions for
clinical trials in and around Europe – since 2000 it has been supporting efforts in Russia to
conduct trials to world quality standards thus paving the way for today’s sponsors from the
research-based pharmaceutical industry to place their studies in the region with confidence.
FDA audit data suggests that data quality in Russia is at least as good as that from other regions
around the world.
Fig: 4.04.07: Summary of FDA inspections performed in Eastern European countries, January 1 1994
to March 31, 2002.
Country Number of Observations

Inspections
NAI VAI OAI
Czech Republic 2 1 3 0
Croatia 2 0 4 0
Hungary 6 2 8 0
Poland 5 4 1 0
Romania 1 1 0 0
Russia 6 4 7 0
Slovenia 1 1 0 0
Total 23 13 23 0
NAI = no action indicated. VAI = voluntary action indicated (objectionable conditions found but justifying only local
measures and not any further regulatory action). Any correction is left to the investigator to take voluntarily. OAI =official
action indicated.
Source: http://www.fda.gov
62
5.0 Clinical Trial Issues
5.01 Study Costs
On average, investigator grants are tangibly smaller than in the West and this may represent a
substantial saving when a large number of patients are allocated to Russian sites. However, it
would be wrong to imply that the cost of clinical studies in Russia is lower than in the United
States or Western Europe. It is still possible to save on investigator’s fees, but local insurance
requirements, the imposition of customs duties (including 20% VAT), along with the higher cost of
courier services, telephone, and internet communications; will even out the differences.
Pharmaceutical sponsors should also be prepared to bear additional costs for miscellaneous
items such as installation of additional equipment at study sites. This might be a modern fax
machine, a laptop, a filing cabinet, biopsy needles, vacutainer tubes and the like. On the other
hand, clinicians taking part in large projects are now learning to reinvest a portion of their study-
derived income in computers, communication systems and new diagnostic equipment.
In some studies, it may be important to supply concomitant medication to the sites in order to
standardise therapy across participating centres. The cost of concomitant treatment in
combination with additional equipment may well push study costs over the level incurred in more
developed countries. Nevertheless, these added costs are outweighed by the speed of study
completion – often shaving weeks, if not months off overall study times in comparison to the
United States or Western Europe – and time costs more than money.
To minimize costs, it is advisable to do as much locally as possible, both in terms of basic

resourcing (e.g. CRAs) and management (such as negotiation with investigators and local
providers).
5.01.1 Investigator’s Fees
To date fees in Russia have not been higher than in the West - often they are much lower but the
amount paid will depend on a number of factors, aside from particular local circumstances.
Involvement of the sponsor's local affiliate in negotiations will, in general, tend to keep the price
down. On the other hand, sponsor or CRO head office's involvement will tend to raise the price
(although this is not often recognised), either due to a lack of local knowledge in negotiating, or
because of a perceived need to pay all investigators in a multi-country clinical trial the same (or
similar within a tight range). Sponsors are often uncomfortable that an investigator in the United
States may receive three times the pay per patient for the same work compared to those in
Russia.
63
Lastly, one must consider the investigator's expectations based on previous experience with
Western sponsors (which will again tend to inflate the price). As with so many issues, this is
always best handled by local agents, who will be able to negotiate a fair, low (compared to
Western investigators) but motivational price, without engendering any bad feeling.
5.01.2 Equipment Expenses
Instances may arise where investigators, whose medical qualification and access to adequate
patient population would make them perfect performers, but the lack of particular equipment or
means of communication (such as internet lines, fax machines, scanners etc.) could present an
obstacle. In addition the site may lack some diagnostic equipment that is absolutely necessary
for the conduct of the study, (e.g. a flow-cytometer, CAT-scan, computerised treadmill, etc).
A third party can always be hired to perform certain tests or else a possible solution is to supply
equipment to such high recruitment potential sites prior to the study, with arrangements for the
payment of the equipment from investigators’ grants. The equipment and experience then
qualifies the site for future trials, an approach which can be beneficial to both the sponsor and the
investigative site. Of course, considerable local expertise is required when choosing such an
approach, and it should be noted that most equipment costs (such as a laptop, fax machine,
modem) will follow international prices, and not be cheaper locally.
5.01.3 Monitoring Expenses
Monitoring expenses will be much lower for a local monitor, however a Western monitor travelling
on a co-monitoring visit may well experience prices similar to what they are used to in the West,
as they will tend to stay in international hotels at standard rates. As stated above, careful thought
must be given when considering sites away from principal cities. The monitoring travel time can
be considerable, as even local monitors can be reluctant to fly on some local airlines. Also, the
time cost involved for a Western monitor on a co-monitoring visit or QA auditor must be
considered.
5.02 Language
Usually the following documents must be translated into Russian:
i. Patient information and Informed Consent Form (ICF);
ii. Labels of the investigational product;
iii. Study protocol and investigators brochure; and
64
iv. Investigators’ and site contracts.
Although the vast majority of investigators are fluent in English, language skills among study staff
can be a problem:
− Good enough for reading, but not for listening or fluent verbal communication;
− CRFs can remain in English but templates in Russian are very helpful;
− Training in Russian is an important requirement for setting up studies;
− If investigators do not have a good command of English, then do not be ask them to make
free-text CRF entries in English. The results could be partially or totally incomprehensible
records, which in turn will impede in-house review and data entry;
− It may also be appropriate to offer translation assistance during investigator meetings –

even where individuals can read and comply with the protocol.
Among medical professions, knowledge of spoken language is usually weaker than written, be-
cause improvement of language skills is acquired mainly through reading of scientific papers and
not through personal contacts. Russian investigators may often hesitate to speak English
because they are afraid of misperceptions due to their accents, pronunciation, or poor
vocabulary, although their general knowledge of English is very good. It is important, therefore, to
encourage the investigators to speak out and to pose questions.
If you wish to attract the attention of Russian investigators, communicate in the local language,
particularly in the study newsletters. This will significantly increase interest in the study.
5.03 Logistics
Good communication is a key factor in the success of any clinical trial, and attention to
communications: written, telephonic, and travel, are important to success when operating in
Russia.
Working in large population centres will optimize logistical considerations in relation to travel (for
both subjects and the sponsor), communications (postage and telecoms), and any requirements
for more advanced IT services. Local-based support both for monitoring and other issues,
preferably within the population centre, will further expedite the processes.
5.03.1 Travel
Getting patients and CRAs to the right place at the right time is a fundamental concern in a study.
Travel arrangements in Russia, notably outside major cities, can be interesting and should be
reviewed carefully before committing to a particular site.
65
Throughout the world, rural populations have greater travel requirements than city dwellers, and
this is the same in Russia. It is therefore natural to focus on principal cities as the starting point
for site and patient recruitment, with their high-density populations.
Moscow and St. Petersburg enjoy the best infrastructure in the Russian Federation and also have
high populations (>10 million and >5 million, respectively); however, there are 8 further major
cities that have a highly developed communications infrastructure and populations in excess of 1
million.
Perhaps more important from a patient point of view is the practical organisation of the Russian
healthcare system - primary and specialist care is organized around very large hospitals serving
very large populations. Once diagnosed, patients are quickly referred to specialists for treatment,
or they can go directly to the specialist without a referral. The key point here is that study subjects
in Russia expect to travel to large specialist centres for treatment. This is of considerable
advantage for clinical trials.
CRAs undertaking their monitoring duties also benefit from these arrangements. Journeys are
shorter, time on site more productive, and several sites are often within easy reach within a single
day. The problem is often the number of study subjects to be reviewed.
In conclusion, the value of each site to the study needs to be considered carefully to ensure that
any travel difficulties or increased travel costs are compensated for by the contribution of the site
to the study, and plans are in place to respond to the requirements of unforeseen travel.
5.03.2 Mail and Courier Services
Careful consideration must be given to confirming how mail, packages, and other deliveries or
pickups will be made. While robust in general, the postal and delivery infrastructures may not
perform to service standards common elsewhere. Courier services may not be able to guarantee
delivery times, sometimes due to the courier's own organisational issues and sometimes due to
"paperwork," of which customs clearance is the most significant. Close local attention to this is
essential, even if a Western courier's headquarters have given assurances of support and service
levels. Familiarity with the specialist needs of clinical trials by Russian courier services is often
not as well developed, and may be completely lacking.
If courier times are long or unreliable, and critical samples have to be transported under particular
conditions back to a central lab, prior understanding of how this can be achieved is essential to
success. Contingency planning will help here to both respond to these issues should they arise,
and to offer study teams clear approaches to balancing scheduled with unscheduled work.
66
5.03.3 Communication
While considerable progress has been made over the past 10 years to improve the
communications infrastructure, it is still the case that large variations in equipment and service
levels occur. It is therefore essential to review the electronic communications requirements
against study requirements, especially when Internet (TCP/IP)-based services are required.
The general telephone (voice) infrastructure does not usually present an issue. Where the
telephone infrastructure has been upgraded, it is often as good as comparable Western systems.
In some instances there is limited access to long distance and international lines but a solution
here is to provide pre-paid calling cards. In private buildings (field CRA locations, private clinics)
or in more remote locations, older systems may still be present and need to be accommodated
(buildings where the exchange has been upgraded, say, but the distribution to individual locations
has not). Situations such as this may cause problems if, for example, an IVRS randomisation
system is to be used. If the telephone system itself is satisfactory, facsimile transmission will
usually be unproblematic. But if fax technologies are essential to the study, provision of dedicated
additional lines may result in a bureaucratic exercise with telecom providers. In the absence of
fax, sites rely on scanning and email.
Services for mobile phones are generally well supported in the principal cities. It should not be
expected that mobile phone services will be available in rural or even some urban areas. Mobile
phone services such as laptop connectivity should be checked if essential for supporting
monitoring visits, as the service levels provided can be mixed, and may not be usable in some
areas.
TCP/IP (Internet)-based services (email, Web browsing, etc.) using direct connections are widely
available and are now often based on the best available technologies. The types of coverage can
vary widely, however, and if the reliance required is high (for EDC tools, for example) checks on
speed, stability and configurations are essential prerequisites to initiating and training sites.
5.04 Background Therapy
Background therapy may not be marketed or not available:
− Check this well in advance;
− Discuss unification of background therapy with local partner;
− Involve local partner in protocol review.
67
5.05 Cultural Differences
Lack of familiarity with cultural differences may lead to poorer quality data being collected. For
example, Russian patients tend to have greater tolerance to pain. Certain side effects may thus
seem more apparent in Western European or US studies:
− Patients may not report ”minor” problems because they do not want to bother their doctors
with a complaint like a headache or dry mouth;
− Less AEs are reported by investigators;
− Investigators must be made aware of the problem.
It is also worth mentioning that Russian patients very often use alternative medicines - particularly
physical therapy, herbs, acupuncture, and massage. This has the potential to interfere with the
trial results and should be taken into consideration. The use of alcohol is also higher than in the
West and this factor along with dietary differences, should be taken into consideration.
In addition, the importance of relationships should not be underestimated:
− Investigators show hospitality and respect;
− It is very important to allocate more time for communication and socialisation in

comparison to Western investigators.
5.06 Recruitment Issues
Currently, the demand for clinical studies lags behind the potential supply. Therefore, the
competition between investigational sites for contract research projects and patients is not
particularly fierce, and the spirit of fellowship among physicians is very high.
However, the big trial sites in the major cities are beginning to get busy – notably in Moscow and
St. Petersburg. It is not uncommon for respectable clinicians to ask their colleagues from other
hospitals to refer patients with a certain diagnosis to them. The request is likely to be satisfied
simply due to goodwill shown by fellow physicians.
It should also be noted that there are no recruitment companies in the market (no SMOs and
advertising for patients is a new concept); however, this is not expected to hamper recruitment
rates in the short to mid-term.
68
5.07 Logistics and Local Support
It is often critical to develop an infrastructure to support multicentre studies. For large projects a
regulatory interface with healthcare authorities is recommended both to expedite regulatory
review and to facilitate importation of clinical supplies.
Some clinical centres are not equipped for long-term storage of large amounts of study drugs,
especially of biotech products that require very stringent storage conditions. To resolve this
problem a buffer storage for supplies and accompanying GMP-compatible paper work needs to
be set up. Sometimes a stand-by car is needed for transporting blood samples from hospitals to
contract labs.
5.08 Monitoring
It is critical for the monitor to establish a productive working rapport with the investigator. This
should be done from the very beginning of the investigator-monitor relationship. Failing to build
mutual respect at the outset often does not result in a second chance. That is why it is generally
advisable that a senior monitor or seasoned project manager should recruit investigators.
Sending an inadequately trained freelancer will not build respect - an experienced investigator will
sense this right away. As a result, instead of the fruitful peer relationship, the monitor will have to
withstand being “talked down to” by the investigator. For this same reason, Russia is not the
place where studies can be efficiently monitored by nurses - monitors need to be a physician,
preferably with a clinical background, in order to establish the right rapport with the investigator.
Most Russian investigators are also scientists and the monitor's ability to competently discuss pet
scientific ideas of the investigator is often the best way to win his/her respect. It is not enough for
monitors to just memorize the protocol; more importantly, they should be able to provide scientific
and methodological rationale for any feature of the study design.
Often, due to the large number of subjects per centre and the increased centre support required
(in areas such as ongoing investigator training), the monitoring frequency may need to be as
much as two to four times higher in Russia than in the West. A strategy of monitoring sites with
Western frequencies that have high patient recruitment rates is often a route cause of sponsor
dissatisfaction with Russian sites. The reasoning behind this is not just the necessity for recurrent
quality control. Most investigators who have little prior experience with international clinical
projects feel insecure about their performance in the beginning of the study and often need
reassurance and guidance from the monitor. In addition, more patients per week at each site will
take more time, and issues will accumulate more quickly. Longer visits at Western frequency will
not have the same efficiency as an increased numbers of visits. The consequence is that the
69
number of visits may need to increase – but it may be that during the study a judgement can be
made that the higher level of support can be reduced as confidence increases.
The importance of local expertise in setting up and conducting clinical studies has to be stressed.
For successful conduct of quality studies in Russia, a profound knowledge of the local medical
community, customs, practices, and the language is of paramount importance. There have been
clinical studies successfully or semi-successfully monitored from abroad, but those incidents are
infrequent. Russia is rapidly becoming more and more internationally minded but, in certain
respects, peculiarities remain therefore for the time being Russian sites should preferably be
monitored by Russian CRAs. CROs having Russian offices have a definite advantage in this
regard.
5.09 Data Management
CRF reviews should be conducted in Russia. Local CRAs are much more efficient in deciphering
obscure CRF records and facilitating query resolution. Coding of concomitant medications may
become a nightmare when not familiar with numerous combination products used in Russia,
which are not listed in international drug databases.
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6.0 Study Set-Up
6.1 Regulatory Compliance - the Federal Drug Law
The Federal Drug Law, 1998, established a legal basis for drug development and clinical trials
and brought the Russian system closer to Western standards. It regulates all aspects of clinical
studies from ethics compliance to subject’s rights and reporting.
According to this law only the Department of Quality, Efficacy and

Administration for State
Safety of Medicinal Products and Medical Devices from the Russian
Control of Drugs and
Ministry of Health (commonly known as the Russian Drug Agency
Medical Equipment
or the Federal Drug Agency) issues approvals for a clinical trial.
Vladkovshki per. 18/20
Within its structure, the agency has the State Pharmacological
Moscow 101431
Committee (SPC), which is responsible for the pharmacological
Tel: +7 095 973 1735
(scientific) content of the study, and the National Ethics Committee
(NEC), which provides ethical expertise. The NEC is constituted in strict accordance with ICH
guidelines.
It should be noted that regulatory requirements in Russia are subject to constant change and
require close examination in order to ensure compliance and smooth study conduct.
Implications of the Federal Drug Law include:
− Only one government body – the Federal Drug Agency of the Ministry of Health –
approves clinical trials.
− The Federal Drug Agency requires approval from the National Ethics Committee before a
trial can commence.
− Trial subjects must be covered by health insurance acquired locally – in addition to any
global insurance policies already held by the sponsor.
− Only medical institutions licensed and approved by the Federal Drug Agency may
participate in clinical trails - licenses are only issued to GCP- compliant establishments.
− The head of the medical institution must approve the study protocol and assign a
supervisor which must be a medical doctor with no less than 2 years experience in
medical research/clinical trials. The assigned supervisor must be familiar with the results
of pre-clinical trials of the study drug and has the right to ask for any additional information
regarding the same.
− The study plan/protocol must be developed in conjunction with the Ethics Committee of
the institution performing clinical trial – i.e. the local IEC.
71
− Non-registered drugs can be imported for clinical trails purposes; however, an individual
shipment license must be acquired for each specific shipment of the study drug from the
Federal Agency.
− Only drugs manufactured in Russia can be exported thus all unused clinical trial material
must be destroyed by Central Pharmacy or specially accredited local companies.
− Drugs for clinical trials must be clearly marked “For Clinical Trial.”
− No subject can be involved in a study without written informed consent.
− Clinical trails cannot be conducted on:
Orphans,
Under-aged children (under 18 years) - unless the drug under trial is being
developed especially for paediatrics; or when the aim of the trial is to collect
better data for this patient group. In the latter case, the trial has first to be
conducted in an adult population.
Pregnant women - unless the drug is being developed for this patient population
and when there is absolutely no risk to the woman or the unborn child.
Military personnel.
Prisoners – unless they provide a written agreement and that the appropriate
authorities are notified.
− Any adverse events (AE) must be reported to the authorities; however, the obligations for
AE reporting are not transparent - i.e. it is not quite clear when, how and to who the report
should be made.
It is worth mentioning that according to current legislation, international agreements in which

Russia is participating take priority over and above Russian legislation for in-country projects.
This means that, firstly, with the absence of the appropriate norms in Russian legislation the
international legislation comes into power. Secondly, if any norm in Russian legislation disagrees
with the internationally accepted norm, then the trial should follow the latter.
6.2 Selection of a CRO and External Vendors
Selection of a CRO is an important part of the study set up process. Many large pharmaceutical
companies have established their own clinical research units in Russia due to the obvious benefit
of conducting clinical research in this region. However, there is still a need for reliable partners in
the management and monitoring of clinical trials in the country, especially for smaller
pharmaceutical and biotechnology companies.
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It is important to check whether a CRO has a physical presence in Russia – many Western CROs
still operate via partners. Knowledge of local specific regulations and language is a key success
factor and use of local expertise is essential in the smooth running of any study – there is great
value in familiarity with the capabilities of local sites and the frequently changing regulations.
Contract research organisations may represent a new phenomenon in Russia, but they provide
the full spectrum of services and many domestic CROs now operate across CEE/CIS borders.
To avoid long custom clearance procedures, it is recommended to set-up one central pharmacy
in Russia to distribute the study drug to the sites. There are many licensed pharmaceutical
warehouses in full compliance with GMP and GCP guidelines. Study drugs sent by courier
directly to the hospital (from abroad) must be cleared through customs by hospital administration,
a very inefficient and time-consuming process. Contracting a local/central pharmacy is a much
more effective drug shipment and distribution process.
When it comes to a central laboratory, sponsors usually contract a central laboratory based in a
Western European country. However, one may significantly decrease the study cost by
contracting a Russian laboratory as the central laboratory for the entire region. Such laboratories
have been found to meet the most advanced standards in laboratory procedures.
6.3 Site Identification/ Investigator Selection
More often than not, project managers first look for experienced investigators in Moscow and St.
Petersburg. However, when considering a drug trial in one of the most actively researched
indications, for example in oncology or cardiology, the most prominent investigators in these large
cities are often overloaded with protocols and the best hospitals are already busy beyond their
capacity.
In such situations, the sponsor should ensure that there will be a qualified physician capable of
investing the time necessary to secure smooth performance of the study and that study
documentation will be appropriately stored and kept out of other monitors' sight. Where this
cannot be ascertained it is strongly advised to explore other locations.
There are a large number of good clinical sites in other Russian cities. The cities themselves may
lack five-star hotels and have fewer cellular phones per capita, but they do have skilled
physicians and well-equipped facilities - in some instances, sponsors may have to invest extra
time in educating these investigators to GCP and training them in various clinical trial procedures
but the flipside of this is that these investigators will be less spoiled by the courtship of large
Pharmacos and more motivated to partake in clinical studies. Those far-sighted enough to do
some educational work in advance will be in a more advantageous position to recruit investigators
and provide for quality performance on a pan-Russian scale.
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There are a number of clinical centres in Russia that are so large and highly specialised that it
would be possible to open several study sites at one particular centre. In some respects, this
scenario presents organisational advantages, but in such a setup it is difficult to accurately
estimate the enrolment potential. Investigators would be competing for the same patients
resulting in fierce inter-departmental competition – the results could be poor recruitment rates.
When working with a clinical centre for the first time, it is very important to be aware of the
hierarchy - the complexity of which should not be underestimated. The general rule is "don't
bypass the boss", but there may be numerous nuances that cannot be fully appreciated as an
outsider. The investigator is likely to know very well how the local power structure works and
sponsors should allow their investigators to navigate them through this hierarchical maze.
Sponsors who are unobservant of, or insensitive to whatever subordinate relationships there
might be, will pay the price. For example, instead of providing much needed assistance when
needed, centre staff will club together to give a united front of carefully calculated inaction. In the
worst-case scenario, the study may experience a series of delays and never sail through at this
site. Study monitors would be wise to observe any "diplomatic" protocol and think ahead.
When selecting an investigator, there are generally two options available:
− The opinion leader - a well-known physician, a policy maker and often a full professor, a
head of the chair, or director of a hospital; or
− A less prominent but more enthusiastic individual, usually a departmental head or an

assistant professor.
Project managers often strive to recruit opinion leaders but this approach is more expensive
because the opinion leader or policy maker expects higher fees. Moreover, opinion leaders are
not necessarily good investigators. They may not be good practicing physicians either. They
probably will not do the work themselves, but will hire a couple of investigators who will also
require salaries. Another problem with the opinion leader or policy maker is that they conduct
multiple clinical trials simultaneously – sometimes competitive ones – so they have less time to
devote to each study and lower motivation. This option is generally employed when the sponsor’s
priority is marketing goals and the clinical trial would benefit by being associated with big names.
If the study is mostly about the drug's efficacy, reliable hard-working investigators capable of
doing a quality job and staying on schedule in terms of patient enrolment are needed. In this
instance sponsors often prefer a less prominent but more effective investigator who will seek
subjects personally, complete all forms on time, attend all meetings, promptly answer phone calls
and work closely with the study monitor.
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Individual projects will require a trade-off between the advantages of the two approaches to
decide which one to implement. Feedback suggests that a mixture of both approaches is the
most effective way to conduct a study in Russia.
6.31 Medical Institutions
As already discussed, the medical system in the country is highly centralised – a heritage of the
Soviet past. Each area of medicine has a “chief specialist” and this is also true for geographical
areas – e.g. chief cardiologist of Moscow, chief oncologist of North West Russia, etc. However,
this system is still very Moscow-centric.
There are in general, two categories of medical institutions of interest for conducting clinical
studies:
− Huge specialised institutions in each field of medicine – e.g. Institute of Oncology, Centre
for Cardiology. Normally, each will also be a teaching and research hospital with
outpatient facilities.
− Huge multi-purpose regional hospitals covering almost all medical specialities in a certain
geographic area and each with an outpatient facility. Such hospitals will be named after a
Saint or by number – e.g. Saint Elizabeth Hospital, Hospital # 32.
Both types of institution have in general between 500 and 1500 beds and process tens of
thousands of inpatients and hundreds of thousands of outpatients annually. The hospitals are well
equipped, have more-or-less modern diagnostic and treatment capabilities, and are staffed with
highly trained personnel.
When it comes to conducting clinical trials, there are a few major differences in the Russian
compared to the Western model:
− Nurses are much less involved in the process of medical care and are hardly ever
involved in clinical trials – they may perform study procedures, such as injections or
taking blood samples, but they neither deal with subject consent or complete study forms.
− In most cases, the study drug is kept at the investigator’s office – not in the hospital
pharmacy – and pharmacists are usually not involved in the clinical trial at all.
− The hospital administration should not only be notified about the clinical trial, but also be
a contractual party in the study agreement.
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6.4 Local IECs
Although not every hospital, out-patient clinic or medical university has its own institutional review
board or ethics committee, the situation has changed remarkably since the early 1990s when
there were no institutional review boards (IRBs) or IECs at all.
Usually, today, there are one or more IECs in every region of Russia. They are usually located at
medical universities or at the largest hospitals of the region. The members of these IECs are
entitled to review and approve clinical trials in the regions where they work. The number of these
committees is on the rise constantly, and the professionalism and skills of their members are
improving continuously.
6.5 Protocol and CRF Design
6.51 Protocol
The study protocol must be developed in conjunction with the Ethics Committee of the institution
performing clinical trial – i.e. the local IEC – and approved by the head of the medical institution.
This is the case for all sites involved in the clinical trial and this function must be co-ordinated
when dealing with multiple sites.
It is generally advisable, unless dealing with truly experienced investigators, that the protocol
should be somewhat more detailed than an ordinary protocol for a purely Western study.
Experienced investigators often accept an outline protocol that leaves a lot of details to their own
discretion; but the less seasoned investigator is much more comfortable with a protocol that is
explicit rather then implicit about almost every element of the study. However, prior to the
commencement of the study, the monitor should emphatically explain that although the protocol
as such should be meticulously adhered to, when it comes to purely clinical decisions the
investigator should apply his/her best medical judgement rather than anything else.
A Russian version of the study protocol must be submitted as part of the “clinical trial package” to
the Federal Drug Agency for review and approval. Some pharmaceutical sponsors also choose to
provide investigators with a Russian translation of the protocol. When preparing a Russian-
language version of the protocol, sponsors should be aware of the potential disastrous
consequences of hiring a translation bureau. Translation by a non-medic may quite literally ruin
the protocol. This may seem a trivial issue, but, regrettably, this is not a hypothetical situation –
many sponsors have fallen foul of this process and ended up with protocols that are not only
unintelligible and laughable due to faulty translation but also full of statements that are entirely
wrong and may be detrimental, if observed, to the study as a whole. Ideally the study protocol
should preferably be translated by a physician and in addition, it is strongly advised to provide the
76
investigator with the original English-language protocol. If, in the investigator's view, some
statement in the translated version does not make much sense, then he/she can always look it up
in the original text.
6.52 CRF
Although the vast majority of investigators and CRAs are fluent in English, many may still get lost
in an English-language CRF. One possible solution is to prepare an entirely bilingual
English/Russian CRF. This would make the CRF substantially bulkier, but would probably be
worth it if the study covers a large number of sites in Russia.
An alternative solution could be to have a Russian-language template that could be

superimposed on the original form prior to making entries. Finally, an additional solution that has
worked well in Western Europe would be to have the white CRF page in Russian and the other
pages in English.
In situations where the investigator does not have a very good command of English, then he/she
should not be asked to make free-text CRF entries in English as the result could be partially or
totally incomprehensible records, which in turn will impede in-house review and data entry.
Unless the CRF is entirely self-explanatory, which is rare, it should contain various tips prompting
the correct completion of a particular form. This is not to say that the CRF should be
overcrowded, which would both confuse the investigator and complicate subsequent in-house
review and data entry. If the CRF cannot be sufficiently instructional by itself, then a CRF
instruction manual would be a good idea. Especially in the beginning of the study, the investigator
would feel much more confident about filling out the CRF, if he/she had a clear supplementary
document to consult.
6.6 Legal Issues, Insurance and Contracts
This is often the most important factor, frequently overlooked by Western sponsors, which
impacts the whole process and can significantly delay completion of a project. There are many
local regulations and it is sometimes difficult for a central Project Manager based in the U.S. or in
the Europe to follow all of them - this is another good reason to rely on local staff based in the
country.
Local regulations impact mainly four areas of a clinical study:
i. Patient information and informed consent form;
ii. List of documents to be submitted to the IRB/IEC or to the Regulatory Authorities;
77
iii. Insurance policy (need for a local insurance policy), indemnity issues; and
iv. Contracts with investigators and their institutions.
6.61 Patient Information and Informed Consent Form
The master informed consent form (ICF) should not be translated word-for-word, but Russian
specifics and laws should be observed and incorporated into the translated ICF. One cannot
assume that the ICF master text is perfect if it contains all GCP-required elements. This is the
worst strategy, which significantly delays the study start through double submission. Moreover,
such approach discredits the sponsor in the eyes of the local IRB/IEC or Regulatory Authority.
Instead, despite including all GCP-required elements, one should review the local regulations,
producing a Russia-specific ICF. The internal (sponsor’s) approval process of the country-specific
version should follow applicable standard operating procedures (SOPs). There are two elements
in the patient information document that frequently cause problems. One is the indemnity
statement. Some sponsors transfer a statement directly prepared by a U.S. lawyer to the ICF text.
Such a statement, usually favourable to the sponsor, often does not fulfil expectations of the local
IRB/IECs and does not usually comply with ethical principles. It is more reasonable to refer in the
ICF text to the insurance policy or outline the insurance/indemnity situation. The second
misunderstanding is specifying the jurisdiction, where a claim can be submitted outside the
patient’s country of residency. This is unacceptable for high-standard clinical research.
When hiring a third party to translate the informed consent form it should be noted that as with the
study protocol poor, commodity translation often carried out by translation bureaus can be
disastrous - the translation should be scrutinised by native Russian speakers to ensure that
nothing has been missed or inverted.
6.62 List of Documents to be Submitted to Local IRB/IEC or Regulatory Authority
A Good Manufacturing Practice (GMP) certificate for the product manufacturer (drug or placebo)
is required, but it needs to be prepared for submission of a sample of the investigational product.
To gain study approval, the sponsor is required to submit a clinical trial regulatory package to the
Department of State Control of Quality, Efficacy, and Safety of Drugs at the Ministry of Health of
the Russian Federation (Federal Drug Agency).
The clinical trial package should contain the following core documents:
− study protocol and amendments;
78
− investigator’s brochure – containing data on pharmacology, toxicity, pharmacokinetics,

and previous clinical trials;
− case report form and other data collection forms;
− information for patients and consent form;
− data collection forms for patients (diaries, questionnaires);
− insurance policy from a Russian insurance company;
− list of investigative sites; and
− curriculum vitae of the principal investigator.
The documents should be translated into Russian in full (i.e. the protocol, patient information and
informed consent forms) or partly (i.e. the investigator’s brochure).
6.63 Local Insurance Policy
Many study sponsors have global product liability insurance in place issued by an international
insurance company; however, no trial can be approved without an additional insurance policy
issued by a local insurance company and should include civil and product liability. Usually there is
no indemnity limit, but there is a requirement for a full insurance policy to be submitted (an
insurance certificate is not enough).
Sponsor representatives and researchers must be insured in addition to patients. This insurance
is the full responsibility of the sponsor and the sponsor is fully liable for all adverse patient
reactions to the study drug(s) regardless of the fact that patients are made fully aware of the trial
specifications and risks.
The local insurance policy should be the first document to be arranged while approaching the
study set-up phase. No IEC will accept any submission or start to review the planned study if a
local insurance policy does not accompany the study protocol.
Many international insurance brokers, although very familiar with the legal aspects, may not
appreciate the specifics of the clinical research process. Problems may arise in cases of
termination of some sites during the study and the recruitment of additional sites which requires
the need for a new policy – this generates additional costs, delays progress and increases the
complexity of documentation. This is a situation where local representation is highly
recommended.
The cost of such insurance will vary depending on the phase of the study: the earlier the phase
the higher the price. For Phase I studies, the cost may reach $80 per patient; whereas in Phase
IV, it may be around $40 per patient. All consented patients must be insured, even if they have
79
not been randomised (i.e. all patients who have signed the consent form). Cost also varies from
company to company.
6.64Contracts with Investigators and Investigative Sites
Even with the best local team, the contract negotiation is usually a time-consuming process and
requires a lot of effort, if not well prepared. Ideally, the sponsor should mail the master contract
template to the local staff, asking them to customise it to meet local standards. Then, after such
customisation, the country-specific template should be reviewed by the sponsor’s legal adviser
and submitted to the investigators and their institutions. Following such process, additional cus-
tomisation is minor and can be changed without further delay.
The signed contract must be in Russian. This presents another challenge for legal advisers based
outside the country. Below are two possible solutions to this problem:
i. Prepare a bilingual contract template. Every paragraph (or sentence) in English should be
followed by identical text in Russian, often in a different font style. Or:
ii. Prepare a local language version and obtain an official certificate from a CRO or other
institution in charge of customisation, stating that both versions are identical.
6.7 Study Approval
Approvals for clinical trials are based on the Federal Drug Law and issued by the Federal Drug
Agency. The submission process usually does not exceed two to four months and the process
flow (Ethics Committee vs. Regulatory Authority) is sequential. As already discussed, the sponsor
is required to submit a clinical trial regulatory package to the Federal Drug Agency who then
forwards the package to the Federal Scientific Centre for Evaluation of Medicinal Products (the
Centre).
To process the documents the Agreement should be signed by the study site(s) and the
organisation which submits the package (CRO or pharmaceutical company). If it is a CRO, there
should be a notarised ‘delegation of authority letter’ from the sponsor pharmaceutical company
(manufacturer of the study drug) in place before the Centre signs an agreement. Both the letter
and agreement should be in Russian. A fee of about $1,000 is charged for processing the
documents.
When the agreement is signed by the Centre, copies of the clinical trial package are
simultaneously sent from the site to the State Pharmacological Committee (SPC) and to the
National Ethics Committee (NEC). In the case of a vaccine study, the Immunology Committee
may also become involved.
80
The SPC provides scientific expertise on the study, after approval from the Safety and Efficacy
Committees is obtained. The SPC usually has its meetings every two weeks, except in summer
months when most members are on vacation. It should therefore be noted, that there are no
meetings from mid-June until mid-September. At all other times of the year, SPC approval is
normally issued within approximately two months.
The National Ethics Committee is established in strict accordance with the ICH GCP. It works
effectively and the review procedure does not exceed more than one month in most cases. The
most common issue with the NEC is the wording of the ‘informed consent form’. If the study has
already been approved for US or Western European sites, no issues usually occur during the
NEC review.
When both the SPC and NEC approve the study, the Russian Drug Agency issues a general
approval for the clinical trial. The Agency lists the investigation sites and the total number of
patients to be consented (patients who must sign the consent form). Hence, if there is any
change or addition to the sites during the study, or if the number of enrolled patients increases, a
new approval should be obtained – this is something to bear in mind.
Although in theory it is possible to apply to the Regulatory Authorities without involvement of the
local staff operating in these countries, it is not recommended. Local representatives can
communicate with authorities in the native language, which facilitates a more effective dialogue
and helps to prevent delays from miscommunication. Such individuals usually are more familiar
with the procedures of the regulatory authorities, guaranteeing a more effective follow-up of the
regulatory review. Many local CROs offer regulatory and clinical trial approval services - this
greatly facilitates the process for international companies planning on conducting trials in the
country.
6.8 Patient Recruitment
Russia, with a population totalling approximately 145 million, is the most advanced CIS country
having been active in international clinical trials since the late 1980s, yet its huge human
resources are still underutilised. Most clinical trial work is conducted in Moscow and St.
Petersburg and some sites are getting very busy while well-equipped sites in the rest of the
country remain underused.
It is a well known fact that Russian study sites recruit patients quickly as Russian patients are
less reluctant to take part in high-standard clinical trials as patients in Western Europe. For many
of them, international clinical projects sponsored by Western companies, are synonymous with
state-of-the-art medical technology. They expect more advanced diagnostic procedures,
81
immediate access to modern medical equipment, and supervision and/or monitoring of the
process by international professionals.
Regardless of the type of study, no subject can be involved without written informed consent. All
patients must be fully informed on the reasons, aims, methods, and possible results of the trial as
well as to the possible risks and disadvantages of participation. Participants must be informed on
their right to decline and/or abrogate the contract at any time. For all trial patients, the physician in
charge must provide a written agreement stating the candidate has been fully informed and
accepted all the terms and conditions of the trial.
For trial subjects unable to give informed legal consent, the informed consent of a legal
representative must be obtained and the interests of the patient must prevail over those of
science and society. Administration of the medicinal product must be expected to produce a
benefit to the patient.
In addition to gaining ethical approval prior to the commencement of a study, sites are also
inspected for ethical compliance while studies are ongoing. Ethical monitoring teams examine
compliance with GCP, as well as with local and international rules. Audit checks usually only
occur once during a trial and the length of the audit process depends on the complexity of the
study but usually lasts several days.
6.9 Site Training
As already mentioned, language skills among study staff can be a problem; therefore, training in
Russian is a must.
Particular effort should be made to educate investigators and to monitor clinical sites – this is
particularly important for sites new to clinical research. Local CROs working in the region often
spend substantial time counselling investigators about site management to ensure that work is
done properly and that investigator grants are fairly distributed among the team members to
maintain efficient site performance.
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7.0 Importing Clinical Trial Materials

When the study has been approved by the authorities, it is necessary to obtain approval for the
importation of the clinical trial materials (CTM) from the Ministry of Health – it should be noted
that study approval does not include an import license.
This approval is specific for each shipment and should be obtained every time the study drug is
shipped to Russia. The process normally takes between two and three weeks in total but
complications can arise.
7.10 Importing the Study Drug
According to the Federal Drug Law, which regulates imports of the study drug to the Russian
Federation, it is necessary to get Ministry of Health import approval for each shipment.
Gaining such approval is a multi-step process. First, a detailed pro-forma invoice should be
submitted to the Russian Drug Agency along with the petition to approve importation. The Drug
Agency issues an import approval letter, which then should be signed by the Deputy Minister of
Health and sealed by the Permanent Committee on Narcotic Drugs.
In the worst case scenario, collection of the signatures and seals may take weeks. Thus, it is
strongly recommended that a shipment begins only when the letter with all the signatures and
seals is ready. Otherwise the study drug may be embargoed at the Russian customs, waiting for
the completion of the paperwork. It is also recommended that a dry run test is performed prior to
the shipment of a real drug.
A pro-forma invoice needs to be prepared for each shipment of clinical supplies, including the
study drug. It should match exactly the shipment content and must be identical to the pro-forma
invoice submitted to the MoH for drug shipment approval. It should be noted that specific pro-
forma invoice requirements can vary according to the courier employed.
The next step for study drug importation is customs clearance. The selection of a courier is
important: the shipping company chosen to deliver the drug to Russia should have strong local
representation. Once all the papers are ready, two things should be done: completion of the
customs declaration and processing the payment of fees. Customs fees depend on the declared
value for customs and the shipping cost. A fee of 20% VAT and the cost of a customs broker
must also be added on. As a result, one should expect to spend about 35 - 40% of the declared
value.
Customs clearance usually takes between two and five days. If a temperature-sensitive drug is to
be imported, it should be stored at a certain temperature (typically +40C), and a special
83
agreement with the customs office should be prepared at the entry point, which will allow one to
deliver drugs to the storage, satisfying the required conditions before clearance is completed. The
drug is then sealed in a quarantine area until the clearance paperwork is done.
There is one very important issue relating to the importation of the study drug and other materials
into Russia: it is strongly recommended that materials are not shipped directly to the study sites
but via a central depot in charge of importation, accountability, inventory and distribution. Sponsor
companies are not legally obliged to use this approach; but, it is important to bear in mind that if
materials are sent direct to the sites, each site will be obliged to do all customs clearance by
itself. A centralised method of importation avoids the difficulties arising from this position.
7.10.1 A Centralised Approach
There are two ways of dealing with the importation of the study materials: centralised methods
and decentralised methods.
The centralised approach utilised in Russia involves the use of a Central Pharmacy and
dramatically cuts down the time and costs associated with the importation. With the centralised
approach only one drug shipment needs to be made to the Central Pharmacy with one pro-forma
invoice being completed, one time customs clearance and so on. The study materials are sent to
the sites from the Central Pharmacy based on the needs of the sites and patient recruitment. The
following procedures can be performed at Central Pharmacy: storage, packing, labelling,
retention, destruction and accountability of the study drug.
Central Pharmacy should guarantee limited access, security, temperature control, alarm systems,
and an uninterruptible power supply. There are obvious advantages of using a centralised
approach rather than a decentralised one, where multiple shipments of the study materials to the
sites are associated with time-consuming multiple pro-forma invoices, multiple customs
clearances and so on. A centralised approach allows for some flexibility if the study materials
cannot be stored at customs due to the special requirements for the study drug storage. In this
case it is possible to receive permission from customs to store the study drug in the Central
Pharmacy sealed, while waiting for customs clearance. As soon as the paper work is done, the
study drug can be shipped to the sites.
Most major courier companies such as DHL, Fed-Ex and TNT, offer their services in Russia. It is
helpful to know the specifics of each courier operation in Russia in order to be able to deliver the
study materials to the sites within 24 hours.
84
7.20 Importing Other Materials
7.20.1 Study Documents
This process is much easier than the importation of the study drug. There are neither specific
conditions, nor any need for importation approval. Customs clearance is simple and the customs
fee depends mainly on the weight of delivery and the shipping cost.
7.20.2 Devices
Regulations for the importation of the investigational devices are not clearly defined. If the device
is not registered in the country, it requires approval from the National Bureau of Standardisation,
which may take months or even years to obtain. Temporary importation might be a solution.
Unregistered clinical trial materials included in the laboratory kits (such as glass tubes and
needles) can be imported into Russia, but nevertheless, the National Bureau of Standardisation
will still have to issue an approval letter in this case.
7.20.3 Laboratory Kits
The situation with laboratory kits is similar to that of devices in that there are no regulations for
unregistered materials, but the importation rules depend on the content of the kit. Additional
approval from the National Bureau of Standardisation may be required.
All these material types are subject to customs fees. A good solution for the importation of
devices and laboratory kits can be temporary importation, but in this case you would pay for every
month the goods are in Russia.
7.20.4 Packing Materials
There are no specific regulations for the importation of packing materials. There may be a
requirement for an import license and a certificate of safety has to be obtained in most cases.
Customs fees vary for different kinds of packing materials and depend on the weight and content
of the package. If possible, some packing materials should be purchased in Russia – this saves
both time and money as it is generally much cheaper to purchase these materials locally than to
import them. This general approach can be used for packing materials (such as cooler boxes and
coolers), general study equipment (ECG machines, treadmills and so on) and concomitant
medications as well.
85
7.30 Exportation of Biological Media
In most international clinical trials there is a need for exportation of blood samples and other
biological materials to the central laboratories in Western Europe or in the US. In order to do this,
Ministry of Health export approval for the entire study is required. It is important to get this
approval before the study commences, otherwise samples can be spoiled or lost. The petition for
this approval consists of the detailed description of material including size and/or volume,
information on whether the materials are contaminated or not, and the total quantity of samples
for the entire study. Sudden changes in regulations may put the entire study at risk. Thus, the
selection of a good courier service and intensive everyday monitoring of the regulations is the
only way to avoid serious problems. The Ministry of Health will issue one approval (export
license) for the specified number of samples per study.
It takes 24 hours to deliver biological samples from St. Petersburg and Moscow to central labs
located in Europe or the US, and 36 to 72 hours from the other cities. Some sponsors consider
using Russian central laboratories to cut down the time and cost associated with the exportation
of biological samples.
7.40 Export of Other Clinical Trial Materials
There are no obstacles to exporting study documents or CRFs. However, the export of
information on videotapes, diskettes, CDs and so on is regulated. This media may be monitored
by customs to confirm that it does not contain information or materials prohibited for export (such
as classified information), and such control may cause delays in delivery. It is important to know
that only developed film can be exported.
According to the Russian Federal Drug Law, only drugs manufactured in Russia can be exported.
Therefore, the unused study drug cannot be returned to the sponsor and must be destroyed by
the Central Pharmacy or local companies with special accreditation. There are several companies
available who can conduct study drug destruction in accordance with the local regulations, GCP
and sponsors requirements.
Drugs for clinical trials must be clearly marked; for example, labelled ‘For Clinical Trial’.
Investigational drugs for in-hospital use may be labelled in English, but study drugs for outpatient
use should have instructions for the patients in Russian.
86
7.50 Summary
Useful tips to successful importation of CTM:
− All approvals should be prepared in advance, prior to shipment of clinical trial materials – a dry
run test prior to real shipment is recommended
− If a sponsor has no local affiliate, it is of crucial importance to employ a reliable CRO with
strong experience in Russia and an excellent record of conducting successful clinical trials in
Russia – knowledge of local requirements is a must
− For importation of CTM, it is better to use a ‘centralised’ approach
− Wise selection of courier service is very important – one with strong local presence in Russia is
recommended
− It is recommended not to export the unused study drug and to avoid circulation of the study
materials among different countries
87

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THE HEALTHCARE,

PHARMACEUTICAL & CLINICAL

THE HEALTHCARE, PHARMACEUTICAL AND CLINICAL

1.0 Politics and Economics .......................................................................................................... 5

3.03.11 Health Posts ........................................................................................................ 39

5.01.3 Monitoring Expenses ................................................................................................. 64

7.30 Exportation of Biological Media .................................................................................... 86

1.0 Politics and Economics

Figure 1.01: Changes in the Macro-Environment

Vladimir Putin: fit, consistent, pragmatic,

Putin’s priority. Progress will be gradual

BP announces $6.75 billion investment for

1.02 The Economic Situation

Key Economic Performance Indicators

p – preliminary results, e – estimates

Source: Bank of Russia, January 2006

Source: Bank of Russia, January 2006

Source: Bank of Russia, January 2006

− 13% income tax was introduced;

− aggregate social benefits tax was reduced by 5%;

− the diminution of already threadbare social programs and benefits continues;

Figure 1.03.1: Russian Political System

The Presidency Federal Assembly Higher Courts

Prime Minister Federal Council Constitutional Court

1.03.31 Intellectual Property Rights

It is recommended that a wider description of the invention or product be used, omitting

1.03.4 Foreign Direct Investments

A study conducted by the Association of International Pharmaceuticals Manufacturers (AIPM) and

− unexpected changes to tax laws;

− unexpected changes in trade policy;

− harassment by the authorities;

− inter-regional trade barriers.

Fig 1.04.1: Major Russian Cities

Fig 1.04.2: Summary of the 10 Major Russian Cities

The largest city in Russia.

High industrial and economic development.

The second largest city and the largest seaport in Russia.

High industrial and economic development.

Flight time to Moscow: 1h 30 mins

A large Port on the Volga River with a developed transportation and

Population > 1.5 Well organised healthcare system.

Flight time to Moscow: around 1h

A centre of scientific and technological progress.

Flight time to Moscow: 3h 5 mins

The main industrial and cultural centre of the Ural region.

A highly industrial and resource rich city.

Flight time to Moscow: 2h 45 min

Lack of research institutions and laboratories.

High industrial and economic development.

Flight time to Moscow: 1h 45 mins

A significant Volga river port.

Well developed transportation and telecommunication sectors.

Volgograd Well organised healthcare supported by local government.

Population > 1 A number of research institutions.

million Good industrial and economic development.

Flight time to Moscow: 1h 35 mins

One of the major industrial centres in Russia.

Developed transportation and telecommunication sectors.

Chelyabinsk Well organised healthcare system.

million Good industrial and economic development.

Flight time to Moscow: 2h 30 mins

A major passenger-oriented and industrial shipping port.

million telecommunication infrastructure.

High economic and industrial development