Controls that open EU markets: why Ukraine needs a new pharmaceutical regulator

Ukraine is entering the home stretch in establishing an independent state control body (ICB) in the pharmaceutical sector. It is scheduled to start its work on January 1, 2027, in accordance with the new Law "On Medicines". A transitional year for adaptation is also envisaged.

The UDC will become a central executive body with a special status. Its sphere of responsibility is the entire chain of circulation of medicines: from production and market authorization to quality control, safety and efficacy of medicines. It will also regulate medical devices, cosmetic products, narcotic drugs and psychotropic substances, substances of human origin (tissues, cells, including reproductive cells, and blood).

This reform is a strategic step towards integration into the EU pharmaceutical market. The need to harmonize the legislation with EU standards has been brewing for years, and real changes have become possible thanks to the partnership of the Ministry of Health of Ukraine, the European Commission and the European Medicines Agency (EMA).

How the UDC will solve the problems of the old system

Currently, the Ukrainian pharmaceutical market operates under a law adopted in 1996. Many of its provisions are outdated and do not meet modern realities and regulatory requirements.

Regulation of the industry is divided between three structures: The Ministry of Health, the State Expert Center, and the State Administration on Medicines. The overlap of powers between the different structures slows down the development of the industry. The creation of the UDC will help resolve this issue. The new regulator:

• eliminate duplication of functions,

• strengthen drug quality control and fight against counterfeiting,

• introduce transparent procedures and digital services to simplify drug registration and pharmacovigilance.

The result is less bureaucracy for business and faster access to quality medicines for patients.

What will the "pharmaceutical visa-free regime" with the EU give to Ukrainian business

On the way to the EU, international partners expect Ukraine to introduce a strong regulatory system in the pharmaceutical industry – the same as in the EU.

Our goal is to obtain the status of a country with a so-called Stringent Regulatory Authority (SRA). This status is held by the EU member states, the United States, the United Kingdom, and Canada, which are trusted countries in terms of the quality of medicines. Medicines from SRA countries undergo simplified procedures for entering other markets because their quality is trusted. Ukraine is also striving to join this circle to increase confidence in domestic pharmaceutical products and expand opportunities for their export.

Today, Ukrainian pharmaceuticals are subject to double checks, both national and European, and each export batch is additionally controlled. This increases the cost and reduces its competitiveness in international markets.

At the same time, even in the face of Russia's full-scale invasion, the pharmaceutical industry continues to grow and increase the supply of domestic products for export.

Expanding the presence of Ukrainian pharmaceutical companies in the European market will significantly strengthen Ukraine's economy. Our country can become a pharmaceutical hub in Europe: attract foreign investment, create joint ventures and develop innovations.

The EU is actively building up strategic stockpiles of critical medicines and centrally coordinating large purchases through the Health Emergency Preparedness and Response Authority (HERA). The HERA budget for 2022-2027 is 6 billion euros.

Diversifying the supply chain of medicines is one of the main challenges for the EU. To overcome the shortage of medicines in the EU, the European Commission proposes several response models. One of the solutions is to form strategic partnerships or alliances in the pharmaceutical sector with the participation of countries outside the EU. This requires support from regulatory authorities .

We see our role in this process and are ready to become a pharmaceutical hub for the production of critical medicines – we have everything we need for this. Six Ukrainian plants have already joined the Critical Medicines Alliance. The next step is to build trust in the Ukrainian pharmaceutical industry by creating a strong regulator. The UDC will allow us to introduce strict European approaches to quality control, which will increase the EU's confidence in our market.

How the JDC will ensure transparency and accountability

The Ministry of Health is preparing a number of safeguards for the transparent operation of the ACC. In particular, an external control commission will be set up to conduct an annual independent assessment of the new regulator's work. To strengthen public control, a Public Oversight Council is being created, which will include nine experts from the patient and medical communities.

Additional anti-corruption requirements are also being introduced for UDC employees, in particular, regarding the so-called special conflict of interest – when a person has financial or other interests in the medical, pharmaceutical or related fields.

Another important aspect is the financial capacity of the new body. Unlike the State Administration on Medicinal Products, which operates with a limited budget, staff shortages and low salaries, the new state control body will have stable funding. More than 70% of revenues are planned to be received through paid services, contributions and fees from market participants. This will guarantee decent salaries, modern technical equipment, a sufficient number of inspectors and quality service for business.

We are building a strong, modern and independent body that will work in the interests of patients. Its main task is the safety of medicines. The results of this reform will be: less counterfeit medicines on the market, high-quality and affordable medicines for people, as well as better conditions for business due to transparent rules and fair competition. The reform is of strategic importance for successful European integration and development of the healthcare system in Ukraine.