10MOSCOW335, RUSSIA HEALTH REGULATOR DISMISSED AFTER PUBLIC COMMENTS ON

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Reference ID Created Released Classification Origin
10MOSCOW335 2010-02-16 19:24 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Moscow

VZCZCXRO4932
PP RUEHIK
DE RUEHMO #0335/01 0471924
ZNR UUUUU ZZH
P 161924Z FEB 10
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 6250
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE PRIORITY
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEAUSA/DEPT OF HHS WASHINGTON DC PRIORITY
RUEHPH/CDC ATLANTA GA PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUCNEEC/EASTERN EUROPEAN COUNTRIES COLLECTIVE
RHEHAAA/WHITE HOUSE WASHINGTON DC

UNCLAS SECTION 01 OF 02 MOSCOW 000335 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/RUS, EUR/PGI, OES/PCI, OES/IHB 
HHS FOR OGHA 
HHS PLEASE PASS TO NIH AND FDA 
USDOC 4231 
PTO FOR MLAMM 
WHITE HOUSE FOR USTR - HAFNER, CFIELD 
 
E.O. 12958: N/A 
TAGS: PGOV TBIO PREL SOCI ETRD KIPR RS
 
SUBJECT: RUSSIA HEALTH REGULATOR DISMISSED AFTER PUBLIC COMMENTS ON 
DRAFT PHARMA LAW 
 
REF: MOSCOW 189 
 
MOSCOW 00000335  001.2 OF 002 
 
 
SENSITIVE BUT UNCLASSIFIED -- NOT FOR INTERNET DISTRIBUTION. 
 
1. (SBU) SUMMARY: On February 6, Prime Minister Putin dismissed 
Nikolai Yurgel, head of Russian pharmaceutical watchdog 
Roszdravnadzor, two days after Yurgel publicly criticized the 
government's draft "Law on the Circulation of Medicines," echoing 
numerous objections of the pharmaceutical industry and other 
stakeholders.  The USG has expressed concerns about the draft 
relating to intellectual property rights and drug testing 
requirements.  Yurgel also had a parochial reason to object to the 
bill: if passed, it would move drug and testing from Roszdravnadzor 
into a new agency.  Despite Yurgel's firing, the intellectual 
property rights issue may still be addressed through an amendment 
which has been drafted, but not submitted to the Duma.  But Yurgel 
has had difficult relations with Health and Social Development 
Minister Golikova for some time, and his criticism of the law may 
have been simply a convenient excuse for his dismissal.  END 
SUMMARY. 
 
-------------------------------------- 
HEALTH REGULATOR SPEAKS OUT, LOSES JOB 
-------------------------------------- 
 
2. (U) On February 6, Prime Minister Putin dismissed Nikolai Yurgel, 
head of the Russian Federal Service for Surveillance in the Sphere 
of Health and Social Development (Roszdravnadzor), the agency 
responsible for supervision and regulation of the pharmaceutical 
industry.  Yurgel has headed the agency since March 2007.  His 
dismissal came two days after he publicly criticized the 
government's draft "Law on the Circulation of Medicines," now in the 
Duma.  He commented on the draft law in an interview printed in the 
newspaper "Vzglyad," saying that the draft needed serious work.  He 
also agreed with the concerns raised by the private sector and other 
groups and warned that the law would open the doors to corruption. 
 
3. (U) The official justification for his sacking was "violation of 
the law on state service."  Article 17 of that law prohibits 
government officials from publicly commenting on the activities and 
decisions of state bodies and leaders.  Yurgel is the first federal 
official fired for violating this law.  In announcing the dismissal, 
the government press service explained that Yurgel "publicly 
expressed his disagreement with the position of the Ministry of 
Health and Social Development (MOHSD), allowing statements similar 
to positions of a number of experts who either didn't read the 
details of the text and didn't understand its novelty, or are openly 
lobbying somebody's interests." 
 
---------------------------------------- 
OBJECTIONS TO THE DRAFT LAW ON MEDICINES 
---------------------------------------- 
 
4. (SBU) The draft law was developed by the Ministry of Health and 
Social Development (MOHSD) with no involvement by Roszdravnadzor or 
outside trade and health experts.  It was submitted to the State 
Duma for consideration at the end of 2009.  The draft was approved 
by the State Duma in its first reading on January 29.  (NOTE: Before 
the bill can become law, it must pass two more readings in the Duma, 
and then be approved by a vote of the upper chamber of parliament 
and signed by the President.  END NOTE.) 
 
5. (SBU) The text has come under fire from the pharmaceutical 
industry, health experts, patients' rights groups, and the Federal 
Antimonopoly Service.  In December, Ambassador Beyrle explained U.S. 
concerns with the law to MOHSD Deputy Minister Veronika Skvortsova 
(reftel).  Specifically, the draft law does not provide six years of 
data exclusivity protection as agreed to in the 2006 IPR side 
letter, part of the U.S.-Russia bilateral agreement for Russia's 
accession to the World Trade Organization.  The bill also requires, 
if only by implication, that any new drugs undergo clinical testing 
in Russia in order to be registered in the country.  (NOTE: The 
draft requires that trial results presented at registration come 
from facilities and medical institutions accredited by the Russian 
 
MOSCOW 00000335  002.2 OF 002 
 
 
government; the government cannot accredit medical institutions 
outside of Russia.  END NOTE.) 
 
6. (U) Diverse stakeholders met with the ruling United Russia 
faction in the Duma on February 4 to discuss concerns about the 
draft law.  Their wide-r
anging complaints included the fear that the 
law would give excessive powers to MOHSD, and that a massive 
proposed hike in drug registration fees would raise drug prices for 
consumers and government health services and threaten producers of 
low-cost drugs and some innovative drugs.  According to health 
experts quoted in the media, the requirement for all drugs to be 
tested in Russian facilities would risk depriving Russian patients 
of critical medications that have already been successfully tested 
in other countries.  In a press quote, Timofey Nizhegorodtsev, a 
department director in the Federal Antimonopoly Service, called the 
law "weak" and expressed astonishment at the idea of requiring 
clinical trials in Russia for drugs already approved abroad. 
 
-------------------------------------- 
ROSZDRAVNADZOR VS. THE HEALTH MINISTRY 
-------------------------------------- 
 
7. (U) Yurgel also had his own parochial reasons to object to the 
law, which reflect a rivalry between Roszdravnadzor and MOHSD, its 
parent ministry.  Although Roszdravnadzor is the lead agency on drug 
registration and quality control, it is almost not mentioned in the 
text of the draft law.  The law would create a new agency 
responsible for testing of new drugs, a function that now belongs to 
Roszdravnadzor. 
 
8. (U) Roszdravnadzor was established in 2004 as part of a 
government restructuring that separated public health policymaking, 
supervision, and implementing functions into three separate 
entities.  Roszdravnadzor, a supervision agency, received control 
over registration and quality control of drugs and medical devices, 
licensing of health care facilities, authorization of clinical 
trials, and other functions.  Aleksey Makarkin, Vice-President of a 
Russian think-tank, the Center for Political Technologies, was 
quoted in the newspaper "Nezavisimaya Gazeta" saying that Minister 
of Health and Social Development Tatyana Golikova has worked to 
gradually bring some supervision and implementing functions back 
under the Ministry's direct control.  Two implementing agencies 
created in the 2004 restructuring have already been eliminated, 
returning most of their functions to MOHSD. 
 
---------------------------------------- 
COMMENT: CONSEQUENCES OF YURGEL'S FIRING 
---------------------------------------- 
 
9. (SBU) Despite Yurgel's dismissal, we understand from discussions 
with the Ministry of Economic Development that that ministry is 
working on amendments, either to the current Law on Medicines, or to 
MOHSD's new draft, to address the intellectual property provisions 
for compliance with the Trade Related Aspects of Intellectual 
Property (TRIPs) Agreement.  But these amendments have not yet been 
submitted to the Duma.  In terms of our work with Roszdravnadzor, 
our senior contacts at the agency have indicated to us that Yurgel's 
departure will not affect those activities -- specifically, a 
proposed project with the U.S. Food and Drug Administration aimed at 
implementing Good Clinical Practice in Russia.  And judging from 
press comments on the difficult relationship between Yurgel and the 
Health Ministry, Yurgel's comments on the draft law may have been 
only a convenient excuse for his dismissal. 
 
BEYRLE

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