By the Order of the Minister of Health of the Republic of Kazakhstan (“RK”) dated December 25, 2024 No. 110 (the “Order No. 110”) amendments have been made to the Rules for Regulation,Formation of Maximum Prices and Markups for Medicines as well as Medical Devices (“MD”) within the Framework of the Guaranteed Volume of Free Medical Care (“GVFMC”) and/or in the Obligatory Social Medical Insurance System (“OSMI”) approved by the Order of the Minister of Health of the RK dated December 11, 2020 No. ҚР ДСМ-247/2020 (the “Rules”).

The following changes have been made to the Rules for Regulation, Formation of Maximum Prices and Markups on Medicines (the ��Pricing Rules for Medicines”):

  • The change in the concept of the Registered Price for Wholesale and Retail Sales, which previously included, among other things, also marketing costs, in the present version includes only the maximum price of the manufacturer[1];
  • Change in the concept of the Registered Price within the Framework of the GVFMC and/or OSMI, which now does not include the costs of quality assessment, and for imported Medicines – transportation costs from the manufacturer to the border of the RK and customs duties[2];
  • Changes in the list of reference countries, namely the inclusion of Kyrgyzstan, Uzbekistan, and the exclusion of Greece, Lithuania, Latvia, Romania, Slovakia, Croatia, Czech Republic, Estonia[3];
  • Omission of the provision establishing confidentiality of the information provided by the applicant for registration of the price or re-registration of the registered price[4];
  • Omission of the provision on currency adjustment of the price in KZT when registering or re-registering a registered price[5];
  • The list of documents which domestic manufacturers attach to the application for price registration or re-registration of the registered price for wholesale and retail sales has changed, namely:
    • there is no need to provide information on actual expenses incurred for wholesale and retail sales on the applicant’s letterhead[6];
    • the following documents have been added: information with supporting documents (contract, agreement) on the prices of the Medicine sold in other countries for the past 12 months preceding the date of filing an application for registration or re-registration of the Medicine (in the absence of sales in other countries, the applicant confirms the absence of sales on the applicant’s letterhead certified by the signature of the authorized person of the applicant), a copy of the document confirming the existing patent protection of the original medicinal product or a biological original medicinal product by INN indicating the expiration date of the patent protection[7];
  • The list of documents which foreign manufacturers attach to the application for price registration or re-registration of the registered price for wholesale and retail sales has changed, namely:
    • there is no need to provide information on actual expenses incurred for wholesale and retail sales of Medicines[8];
    • now foreign manufacturers will need to provide a copy of the document confirming the existing patent protection of the original medicinal product or a biological original medicinal product based on the INN, indicating the expiration date of the patent protection[9].
  • The criteria for registering the price or re-registering the registered price of a Medicine manufacturer for wholesale and retail sales have changed, namely, the provided manufacturer’s price for imported Medicines for the RK shall not exceed the highest of the three lowest prices from among submitted in the application reference countries (previously did not exceed the average value of Ex-Works prices in reference countries)[10]; if the number of reference countries is less than three, the manufacturer’s price shall not exceed the highest price value from the provided number of reference countries[11]; the provided maximum price of the manufacturer for imported Medicines shall not be higher than the price value (previously not higher than the maximum price value)[12] specified in the provided documents confirming the price of the Medicine in the contract or agreement for the purchase of Medicines[13]; the requirements for marketing and transportation costs have been omitted, and a new criterion has been added, namely, “the maximum price provided by the domestic manufacturer shall not exceed the Medicine prices in other countries” [14];
  • Wholesale and retail markups on Medicines, wholesale and retail markups on Medicines under a special procedure have changed: wholesale markups – from 25% to 10%[15] (in the previous version from 21% to 10%[16]), wholesale markups under a special procedure – from 10% to 5,5%[17] (in the previous version from 10,5% to 5%[18]), retail markups – from 30% to 10%[19] (in the previous version from 55% to 10%[20]), retail markups under a special procedure –  from 15% to 5%[21] (in the previous version from 27,5% to 5%[22]).
  • A rule has been introduced to the effect that the maximum price for the trade name of a Medicine for wholesale and retail distribution for a generic Medicine or biosimilar Medicine shall be below the maximum price for the trade name of an original medicinal product or biological original medicinal product, for a generic Medicine– by 30%, for a biosimilar Medicine – by 10%[23].

Price Registration within the framework of the GVFMC and/or OSMI

  • The list of documents which domestic manufacturers attach to the application for price registration or re-registration of the registered price within the framework of the GVFMC and/or OSMI has changed, namely:
    • The following documents have been added: information with supporting documents (contract, agreement) on the prices of Medicines sold in other countries for the past 12 months preceding the date of filing an application for registration or re-registration of the Medicine, a copy of the document confirming the existing patent protection of the original Medicine by INN indicating the expiration date of the patent protection, the requirement to provide information on expenses has been omitted [24].
  • Requirements have been changed for the documents which contract manufacturing customers attach to the application for price registration or re-registration of the registered price within the framework of the GVFMC and/or OSMI, for example, the requirement to provide information on actual expenses incurred has been omitted; a requirement has been added to provide a copy of a document confirming the existing patent protection of the original medicinal product by INN, indicating the expiration date of the patent protection, a requirement to provide information on prices in reference countries, in case of absence of prices in reference countries, information on prices in the country of the manufacturer has been added[25];
  • The list of documents which foreign manufacturers attach to the application for price registration or re-registration of the registered price within the framework of the GVFMC and/or OSMI has changed, namely:
    • a provision has been added to the effect that in the absence of actual imports over the past 12 months, copies of documents for the previous 12-month period shall be provided, and in the absence of actual imports for the specified period the applicant confirms the absence of imports on the applicant’s letterhead, certified by the signature of the applicant’s authorized person[26];
    • a requirement to provide information on actual expenses incurred has been omitted[27].
  • The criteria for registering the price or re-registering the registered price of a Medicine within the framework of the GVFMC and/or OSMI system have changed, namely:
    • Exclusion of the criterion that transportation costs from the manufacturer to the border of the RK, specified in the application shall not exceed 15% of the manufacturer’s price within the framework of GVFMC and/or OSMI system[28].
    • Adding a criterion that the maximum price of a domestic manufacturer’s Medicines within the framework of the GVFMC and/or in the OSMI shall not exceed the prices of Medicines sold in other countries[29];
  • The markups within the framework of the GVFMC and/or the OSMI system for Medicines have changed, in the present version – from 20% to 10% (in the previous version – from 20% to 14%)[30]. The markups for Medicines within the framework of the GVFMC and/or the OSMI system under the special procedure have changed – in the present version from 10% to 5% (in the previous version from 10% to 7%)[31];
  • A provision has been added stating that the draft maximum price for a trade name of a Medicine within the framework of the GVFMC and/or in the OSMI system shall not be higher than the approved maximum price for a trade name of a Medicine for wholesale sales[32];
  • A rule has been introduced stating that the maximum price for the trade name of a Medicine within the framework of the GVFMC and/or in the OSMI system for a generic Medicine or a biosimilar Medicine shall be lower than the maximum price for the trade name of the Medicine of the original or biological original medicinal product, for a generic Medicine – by 30%, for a biosimilar Medicine – by 10%[33];
  • The provision has been omitted to the effect that during the formation of the draft maximum prices within the framework of the GVFMC and/or the OSMI system if it is observed that the maximum prices are higher by 10 percent or more compared to the approved maximum prices for Medicines, the state expert organization conducts an analysis of prices based on the manufacturer’s price, import prices, costs and according to data from the official websites of authorized bodies in reference countries with a similar INN, taking into account the dosage, concentration, volume and packaging of the Medicine[34].

The Rules for Regulation, Formation of Maximum Prices and Markups on MD within the Framework of the GVFMC and/or the OSMI System (the “Pricing Rules for MD”)

Amendments include the following:

  • It has been established that price regulation applies to a trade name and technical characteristics of Medical Supply (“MS”) as well as to Medical Devices for diagnostics outside a living organism (in vitro) manufactured in the territory of the RK within the framework of long-term contracts with a Single Distributor (“MD in vitro”)[35];
  • The definition of reference countries has been omitted[36];
  • Now to register the price or re-register the registered price for a MS within the framework of the GVFMC and/or in the OSMI for the trade name of the MS information on the actual supply price is provided indicating a link to the procurement web portal of SK-Pharmacy LLP, a link to the state procurement web portal with the provision of supporting documents (protocol, procurement agreement and/or supply agreement) of the last purchase within the 12 months preceding the date of application submission[37];
  • The provision that the information provided by the applicant for the purpose of price formation shall be confidential has been omitted[38];
  • A list of documents for registering the price or re-registering the registered price of a MS within the framework of the GVFMC and/or the OSMI system for domestic manufacturers has been determined[39];
  • When registering or re-registering the price of MS the requirement to provide information on the actual costs incurred has been omitted for foreign manufacturers as well as the requirement that the total costs incurred shall not exceed 25% of the manufacturer’s Ex Works price[40];
  • The criteria for registering the price or re-registering the registered price of MS within the framework of the GVFMC and/or the OSMI system have been changed, namely:
    • the criterion has been omitted stating that the manufacturer’s price within the framework of the GVFMC and/or in the OSMI system for imported MS shall not exceed the maximum value of three minimum Ex-Works prices from among submitted in the application reference countries[41];
    • New criteria have been introduced, namely, the maximum price for MS of a domestic manufacturer within the framework of the GVFMC and/or the OSMI system shall not exceed the prices of MS sold in other countries, the registered price within the framework of the GVFMC and/or in the OSMI shall not exceed the price of the last purchase on the web portal of SK-Pharmacy LLP, on the public procurement web portal within the 12 months preceding the date of filing the application for the MS[42].
  • Markups for MS under the GVFMC and/or the OSMI system have been reduced, in present version – -from 20% to 10% (in the previous version- from 33% to 20%)[43];
  • The list of documents to be provided for an analysis of prices for in vitro MD has been established[44].

The Order No. 110 enters into force on January 7, 2025, except for the provisions stating that:

  • when registering or reregistering prices for Medicines the state expert organization compares the data provided by the applicant for compliance with the requirements of the Pricing Rules for Medicines and data from the integrated information system of customs authorities;
  • the maximum price for the trade name of a Medicine for retail sale shall not be higher than the average prices in pharmacy chains indicated in the integrated information system of the authorized state revenue body based on cash receipts,which come into effect on July 1, 2025[45].

Footnotes

[1] sp. 14, p. 2 of the Pricing Rules for Medicines as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63, sp. 14, p. 2 of the Pricing Rules for Medicines as amended by the Order No. 110;

[2] sp. 27, p. 2 of the Pricing Rules for Medicines as amended by the Order No. 110;

[3]sp. 23, p. 2 of the Pricing Rules for Medicines as amended by the Order No. 110;

[4] p. 11 of the Pricing Rules for Medicines as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63;

[5] p. 10 of the Pricing Rules for Medicines as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63;

[6]. p.18 of the Pricing Rules for Medicines as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63; p. 18 of the Pricing Rules for Medicines as amended by the Order No. 110;

[7] sp. 2, 3, p. 18 of the Pricing Rules for Medicines as amended by the Order No. 110;

[8] p. 18 (for foreign manufacturers) of the Pricing Rules for Medicines as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63;

[9] sp.5, p. 18 (for foreign manufacturers) of the Pricing Rules for Medicines as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63;

[10] sp. 1, p. 24 of the Pricing Rules for Medicines as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63;

[11] sp. 1, p. 24 of the Pricing Rules for Medicines as amended by the Order No. 110;

[12] sp. 3, p. 24 of the Pricing Rules for Medicines as amended by the Order No. 110;

[13] sp. 3, p. 24 of the Pricing Rules for Medicines as amended by the Order No. 110;

[14] p. 24 of the Pricing Rules for Medicines as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63, of the Pricing Rules for Medicines as amended by the Order No. 110;

[15] p. 27 of the Pricing Rules for Medicines as amended by the Order No. 110;

[16] p. 29 of the Pricing Rules for Medicines as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63,

[17] p. 28 of the Pricing Rules for Medicines as amended by the Order No. 110;

[18] p. 30 of the Pricing Rules for Medicines as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63,

[19] p. 33 of the Pricing Rules for Medicines as amended by the Order No. 110;

[20] p. 34 of the Pricing Rules for Medicines as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63,

[21] p. 34 of the Pricing Rules for Medicines as amended by the Order No. 110;

[22] p. 35 of the Pricing Rules for Medicines as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63,

[23] p. 30, 36 of the Pricing Rules for Medicines as amended by the Order No. 110;

[24] p. 47 of the Pricing Rules for Medicines as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63, of the Pricing Rules for Medicines as amended by the Order No. 110;

[25] p. 47 (for contract manufacturer customers) of the Pricing Rules for Medicines as amended by the Order No. 110;

[26] sp. 2, p. 47 (for foreign manufacturers) of the Pricing Rules for Medicines as amended by the Order No. 110;

[27] p. 47 (for foreign manufacturers) of the Pricing Rules for Medicines as amended by the Order No. 110;

[28] sp. 3, p. 53 of the Pricing Rules for Medicines as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63, p. 51 of the Pricing Rules for Medicines as amended by the Order No. 110;

[29] sp. 4, p. 51 of the Pricing Rules for Medicines as amended by the Order No. 110;

[30] p. 54 of the Pricing Rules for Medicines as amended by the Order No. 110; p. 58 of the Pricing Rules as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63;

[31] p. 55 of the Pricing Rules for Medicines as amended by the Order No. 110; p. 59 of the Pricing Rules as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63;

[32] p. 54 of the Pricing Rules for Medicines as amended by the Order No. 110;

[33] p. 58 of the Pricing Rules for Medicines as amended by the Order No. 110;

[34] p. 61 of the Pricing Rules for Medicines as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63,

[35] p. 5 of the Pricing Rules for MD as amended by the Order No. 110;

[36] p. 3 of the Pricing Rules for MD as amended by the Order No. 110;

[37]sp 3, 4 (for domestic manufacturers), sp5, 6 (for foreign manufacturers), p. 14 of the Pricing Rules for MD as amended by the Order No. 110;

[38] p. 7 of the Pricing Rules for MD as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63;

[39] p. 14 of the Pricing Rules for MD as amended by the Order No. 110;

[40] p. 14 (for foreign manufacturers) of the Pricing Rules for MD as amended by the Order No. 110;

[41] p. 20 of the Pricing Rules for MD as amended by the Order No. 110;

[42] sp. 3, 4, 5, p. 20 of the Pricing Rules for MD as amended by the Order No. 110;

[43] p. 21 of the Pricing Rules for MD as amended by the Order No. 110; p. 20 of the Rules as amended by the order of the Acting Minister of Health of the RK dated 20.08.2024 No. 63;

[44] p. 29, 36 of the Pricing Rules for MD as amended by the Order No. 110;

[45] p. 4 the Order No. 110;

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