Transcript of the start of the meeting: 

V. Putin: Good afternoon, Ms Golikova. As you know, one of the most sensitive issues for our people, for the citizens of our country, is the issue of medication supplies. At every meeting, including the meeting in Toliatti yesterday, people ask about medications. I know that your Ministry has prepared certain proposals regarding the measures that should be taken to improve the situation with medication supply, especially considering that imported medications have become more expensive. Please report on these proposals.

T. Golikova: Mr. Putin, our Ministry, together with the constituent entities of the Russian Federation, is administering two portions of the state segment of medication supplies. The Ministry directly funds the acquisition of medications for seven diseases requiring expensive treatments. For the first six-month period, we acquired the medications in December and, therefore, the rouble devaluation did not impact their supply. In this segment, we also procure some medications from one domestic manufacturer whose products meet the quality requirements. We may need to acquire some additional quantities of this medication as it is supplied both by domestic and foreign producers.

The second element of the Government medication supplies financed from the federal budget are the subventions provided to the constituent entities of the federation since last year. These are provided as supplementary medication supplies to replace the so called "natural" benefits. When adopting the budget last year, we agreed that to secure ourselves, the federal budget would allocate funds not only based on the citizens' choice of medication supplies and the established size of the social package, but will also fund an extra one-third part to ensure the supplies remain at the 2006 level. The medication supplies were at their highest level in 2006. In this segment, the regions have largely completed their acquisitions for the first six months, just as the federal government did. Some of the regions have acquired medications for the whole year. The government has transferred two-thirds of the funds that will be allocated for these purposes, and those regions that have not acquired the supplies for the rest of the year are preparing to organize tenders for the second half of 2009.

In this respect, our Ministry, together with the Ministry of Industry and Trade, has reviewed the overall trend of the medication acquisitions by the constituent entities of the federation; we have come to the conclusion that in some cases, priority is given to foreign medications.

V. Putin: They are more expensive, and consequently, the prices are higher

T. Golikova: We have also learned that some of the domestic medications are compatible in terms of quality with their foreign analogs and, therefore, we could save funds by purchasing them. This would have a positive effect on the overall supply situation and, at the same time, would support our pharmaceutical industry in its capacity to produce medications in sufficient amounts. So far, the pharmaceutical industry did not feel that the Government was interested in its products.

Therefore, based on this analysis, we have submitted to you a report suggesting that you instruct the constituent entities of the federation to acquire domestic medications if possible, and if the quality of the domestic product is compatible with foreign analogs in terms of quality. This, however, is part of the state segment and we are not under any strain here. We are just securing ourselves. As you know, a social benefits reserve fund has been established in the framework of the amendments to the budget law.

There are still problems in the commercial segment. As you know, prices have grown significantly in a number of regions; at Commission meetings (the Government Commission on Sustained Economic Development) Mr Shuvalov considered the question of a complex of priority measures that must be undertaken to restrict or control price growth in the commercial segment.

We delimited areas of responsibility because it is not only the Ministry of Healthcare that is in charge of this issue, rather, corresponding services, including the Federal Tariff Service and the Economic Development Ministry, are also responsible for it. In the near future, within a month or two, we are going to prepare draft changes to the Government's regulatory base following a number of directives. These changes suggest phasing in the federal mandatory registration of prices on essential and necessary medicines, as opposed to voluntary registration.

So far only 20% of essential and necessary medicines are registered. We are aiming to boost this share to 100%; I am referring to both Russian and foreign medicines.

Vladimir Putin: What effect do you expect?

Tatyana Golikova: We expect to receive a proxy measure of the prices at which medicines are shipped; and, along with the implementation of another directive given to the Federal Tariff service, which envisions developing methods of setting trade markups, now the regional administrations' domain, we will be able to analyse the price growth margin by comparing the registered price and the commercial trading price.

Vladimir Putin: What is this price based on?

Tatyana Golikova: This price is based on the registration procedure that the Federal Supervision Service for Healthcare and Social Development will be carrying out.

Vladimir Putin: How will this price be defined?

Tatyana Golikova: Russian commodity producers have to undergo quite a complicated registration procedure. They register prices and we see the difference...

Vladimir Putin: Do they register it as they want it, or are there restrictions?

Tatyana Golikova: As far as domestic medicines are concerned, there are specific methods; they are old, but we can apply them. What causes greater concern is foreign producers. There is a challenge we are addressing: it is necessary to interact with the Federal Customs Service to define the price at which the consignments of medicines that cross our border must be declared. It is the most challenging issue because it is sensitive information.

Vladimir Putin: What can be "sensitive" about it? They declare a minimum customs cost to pay minimum customs taxes and duties. Let them sell medicines at these prices, too.

Tatyana Golikova: It is the key indicator that will reveal the real price and allow us to compare prices.

Vladimir Putin: Let us formulate a relevant order to the Customs Service, too.

Tatyana Golikova: There is one-Igor Shuvalov has made it, though, possibly, with vague wording.

Vladimir Putin: It must be not vague but explicit to rule out price juggling in the domestic market.

Tatyana Golikova: It envisages other measures, as well. We will ask Mr Shuvalov's commission quite soon to analyse the formative concept of a list of essential medicines. It has not been revised since the middle of 2007. We did not revise it last year because of turbulences in the pharmacy market. As you might remember, we were paying stale debts and could not do anything to improve the situation.

Next, we will proceed from the methods we plan to suggest for what is in the immediate competence of my ministry - that is, amendments to the list of the minimum pharmacy assortment because low-price medicines are vanishing from the shelves, a trend launched by the crisis. We will have to compile such a list. The Federal Supervision Service for Healthcare and Social Development will monitor the assortment, availability, and prices, as Mr Shuvalov's commission has ordered it. The service will also control such matters after we amend its statute to add supervisory duties.

Vladimir Putin: So far, so good. Please give me a detailed list of all measures intended in this sphere within the week.

Tatyana Golikova: We will.

Vladimir Putin: Thank you.