National regime in public procurements after the 2025 reform

Although there is no acute product shortage on the Russian market of drugs and medical devices, the legislator and the Government have been taking active measures to improve sustainability of drug supply for several years. One of the courses of such measures is the stimulation of local production of pharmaceutical and medical products.

As part of this policy, at the end of 2024, amendments were made to the Federal Law No. 44-FZ “On the Contract System for Procurement of Goods, Works, and Services for State and Municipal Needs” (“Federal Law No. 44”) and the Federal Law No. 223-FZ “On Procurement of Goods, Works and Services by Certain Types of Legal Entities” (“Federal Law No. 223”) (collectively – the “Laws”).

As a general rule, when procured in accordance with the Laws, goods of foreign origin are granted the national regime under which such goods enjoy equal conditions with goods of Russian origin.

However, to support Russian production, the Government may establish exemptions from the national regime. Until 2025, these were scattered in a number of legal acts and included, among others, the well-known “third one out^[1]” rule.

The above-mentioned amendments have consolidated the exemptions from the national regime in Article 14 of the Federal Law No. 44 and Articles 3, 3.1-4 of the Federal Law No. 223, as well as in the Government Decree No. 1875 of 23 December 2024 (the “Decree”).

The Laws establish three types of exemptions from the national regime:

• Prohibition – any bid offering goods of foreign origin is rejected.
• Restriction – all bids offering goods of foreign origin are rejected if there is at least one bid which offers goods of Russian origin (the “second one out” rule).

The similar “third one out” rule, which previously applied to certain medical devices (for example, bandages and microscopes) and to drugs from the EDL^[2], has been abolished.

• Preference – a bidder who has offered to supply goods of Russian origin benefits from a 15% price preference (i.e. a reduction in price offer for the sole purpose of determining the winner; in the event of winning the contract is concluded at the price offered by the winner).

For the purposes of applying the exemptions, goods from the Eurasian Economic Union (“EAEU”) are equated with Russian goods.

The applicability of the exemptions from the national regime to medical devices (the “MDs”) is described in the table below:

In addition, for MDs from Annex No. 3 to the Decree, a mandatory minimum share of procured goods of Russian origin is stipulated. In particular, it is set for medical gauze (90%), rubber and latex surgical gloves (20%), devices based on the use of α-, β- or γ-radiation (45%), computer tomographs (30%), fluoroscopic and radiographic devices (75%).

Drugs are specified in item 433 of the list of goods (Annex No. 2 to the Decree) which under clause 1 of the Decree are subject to the restriction. At the same time, paragraph “p”, clause 4 of the Decree specifies that the established restriction applies only to the procurement of EDL drugs. In other words, the restriction does not apply to the procurement of drugs that are not included in the EDL^[3].

Preference is applied to drugs from the EDL considering the degree of their localisation.

In the original version of the Decree, not only the restriction, but also the preference applied only to EDL drugs. The antitrust authority even started to form a corresponding practice^[4]. This came as a surprise to many companies in the industry, as previously, before the Decree was adopted, the preference was applied to all localised drugs regardless of their presence in the EDL.

In June 2025, the reference to the preference was deleted from the clause of the Decree stating that the restriction and preference apply only to EDL drugs. On the one hand, this can be interpreted as a return of the applicability of the preference to localised drugs that are not included in the EDL. On the other hand, due to the lack of changes in some other clauses of the Decree^[5], it is still difficult to expect the antitrust authority to adopt such an interpretation in practice. Especially considering that in July 2025, the Ministry of Industry and Trade pointed its view that preference should apply only to EDL drugs^[6].

Some drugs from the EDL are also included in the List of Strategically Important Drugs, the production of which must be guaranteed within the territory of the Russian Federation, approved by the Russian Government Order No. 1141-р dated 6 July 2010 (the “SID List”)^[7]. At present, the procurement of drugs from the SID List is carried out on the same terms and conditions as procurement of EDL drugs^[8], but from

1 September 2025 they will be subject to a restriction based on the degree of localisation:

Added as a result of the national regime reform, Article 33(1.1) of the Federal Law No. 44 requires that when describing the goods subject to procurement for which exemptions from national regime are established, the characteristics of the goods of Russian origin must be specified. Compliance with this requirement caused difficulties for public customers who have a need for drugs and MDs that are not produced in Russia^[9]. This requirement also contradicted the established court practice, according to which medical organisations have the right to establish requirements for goods taking into account their own needs and based on the specifics of their activities^[10].

It is likely that the radical nature of this rule and its inconsistency with the established positions of the courts caused the antitrust authority's relatively “soft” stance towards its compliance. For example, one of the decisions of antitrust authority notes^[11]:

“... the requirement to specify the characteristics of goods of Russian origin in the description of the object of procurement prevails over the customer's need for goods of foreign origin if there is production of such goods in the territory of the Russian Federation ...”.

In another decision^[12], the antitrust authority upheld a customer who had specified characteristics of catheters that were not manufactured in the EAEU. The customer explained that neither in the Register of Russian Industrial Products (the “RRIP”) nor in the State Register of MDs it may find catheters that fully meet its needs.

Finally, the Government took notice of this difficulty by amending the Decree^[13] in June 2025 to include special provisions for the procurement of goods not produced in Russia:

• declare in a procurement documentation the fact that goods with the required characteristics are not manufactured in Russia.

Thus, a customer planning to procure foreign drugs and MDs covered by national regime exemptions is expected not only to take a reasonable approach to describing the characteristics of the foreign goods, but also to be sure that such goods do not exist in the RRIP or that there is no production of such goods in Russia (depending on the position of the goods in the Annexes to the Decree). In the latter case, it may be especially problematic for the customer to draw up the procurement documentation, as the declaration of complete absence of the production is only possible in case of in-depth knowledge of the particular industry sector.

Among other things, the above declaration should encourage customers to be more careful with the justification of the required characteristics of the goods to be procured, because now the potential bidders and the supervisory authority will immediately see that the need for specific characteristics is the reason for the procurement of foreign goods.

Considering that, references to the needs of medical practice may help to justify the customer’s desire to procure the foreign goods with some specific characteristics.

For example, in a dispute^[16] over the procurement of immunoglobulin in packages of a size which are not produced in the EAEU, the antitrust authority agreed with the customer who justified its need for such packages by arguing that doses are calculated on an individual basis and the required size prevents the occurrence of adverse events that could cause the need for additional medication and complications of the patient's condition.

In another case, the argument was that Russian catheters had absolute contraindications to use, which were absent in the foreign MD described by the customer^[17].

The fact that the product specifications set out in the procurement documentation are met by several manufacturers — even if foreign — may also support the position of the customer^[18]. This may serve as evidence that the customer has no intention to violate the law or to restrict competition in procurement.