Legislative Updates in Pharmaceutical Industry – Uzbekistan – February 2025
New Initiatives for the Development of the Pharmaceutical Industry in the Republic of Uzbekistan
On January 28, 2025, the President of the Republic of Uzbekistan (“Uzbekistan”) signed the Decree “On Additional Measures for the Accelerated Development of the Pharmaceutical Industry” No. UP-13 (the “Decree No. 13”), which came into force on January 29, 2025.
Below is an overview of the key regulatory changes in the pharmaceutical industry introduced by the Decree No. 13. The most significant amendments include the abolition of price markup limitations on over-the-counter medicines and the imposition of a 2% customs duty on certain categories of medicines, effective April 1, 2025.
Abolition of maximum price markups on over-the-counter medicines as of April 1, 2025
Pursuant to the Decree No. 13, as of April 1, 2025, maximum price markups (15% for wholesale and 20% for retail sales) will apply only to prescription medicines. Accordingly, regulatory restrictions on price markups for over-the-counter medicines will no longer be in effect.
Notably, the Decree No. 13 does not provide a clear explanation regarding the retention or removal of price markups on medical devices.
Furthermore, the Decree No. 13 stipulates that the current reference pricing system shall remain in effect for domestic and imported prescription medicines, subject to the following conditions:
- The certification of prescription medicines is prohibited if their reference price is not indicated or exceeds the established reference price,
- If the same manufacturer produces medicines with an identical composition under different trade names, the lowest reference price shall apply to all such products. This rule does not apply in cases where active pharmaceutical ingredients from various manufacturers are used in the production of these medicines,
- The State Enterprise "Pharmaceutical Safety Center" (the "Pharmaceutical Safety Center") shall automatically adjust reference prices denominated in foreign currency without requiring the applications from businesses. If the exchange rate increases by 3%, adjustments shall be made twice a year (in January and July), and if the exchange rate increases by 5%, an unscheduled adjustment shall be carried out.
Introduction of a 2% customs duty on certain categories of medicines
Pursuant to the Decree No. 13, effective April 1, 2025, a 2% customs duty will be imposed on medicines classified under heading 3004 of the Foreign Economic Activity Commodity Nomenclature, based on their customs value.
Furthermore, the exemption from customs duties has been extended until January 1, 2028, for technological and laboratory equipment, components, and spare parts not manufactured in Uzbekistan, as well as raw materials, substances, medical devices, and packaging used for preclinical research and medicine production, imported for own needs of pharmaceutical manufacturers and wholesale pharmaceutical trading enterprises. The relevant amendments have been introduced into the Decree No. UP-55, "On Additional Measures for the Accelerated Development of the Pharmaceutical Industry of Uzbekistan for 2022–2026," dated January 21, 2022.
Requirements for the export of donor blood plasma from Uzbekistan for medicine production established
Pursuant to the Decree No. 13, the proposal of the Ministry of Health and the Agency for the Development of the Pharmaceutical Industry under the Ministry of Health (the "Agency") has been approved, allowing for the export of donor blood plasma from Uzbekistan until the end of 2027 for the contractual production of medicines derived from donor blood plasma. The basis of the decision to export donor blood plasma is the conclusion issued by the Ministry of Health and the Agency.
The surplus volumes of medicines produced from the exported donor blood plasma, exceeding the needs of the Ministry of Health, are allowed to be sold (exported) to foreign countries.
The Ministry of Health has been instructed to submit a draft government resolution to the Cabinet of Ministers of Uzbekistan by March 1, 2025, which shall establish:
- The procedure for granting permission to export donor blood plasma from Uzbekistan for medicine production,
- The procedure for authorizing the export of medicines produced from donor blood plasma to foreign countries.
Comprehensive measures adopted to stimulate the development of the pharmaceutical industry
A plan for comprehensive measures has been developed to further reform the pharmaceutical industry and ensure the population's access to high-quality medicines
The Decree No. 13 introduces a set of measures aimed at further reforming the pharmaceutical sector and improving the availability of high-quality medicines, including:
- Analysis of the application of value-added tax (VAT) on medicines and the development of proposals for improving this system by the Ministry of Economy and Finance, the Tax Committee, and the Agency,
- Enhancement of pharmaceutical product certification rules, including improvements to the sample identification process within certification regulations, the establishment of an appeal procedure for applicants contesting certification decisions issued by the Pharmaceutical Safety Center, improvements to the electronic certification system, increased automation of assessment processes, and the full formation of an electronic database,
- Development of a legal and regulatory framework for the production of biotechnological pharmaceuticals based on cell technologies,
- Development and submission to the Cabinet of Ministers of Uzbekistan of a draft government resolution on the establishment of a Regenerative Medicine Center, as well as measures for organizing its activities by the Ministry of Health,
- Provision of state medical institutions with the necessary equipment for record keeping of the medicines procured for patient treatment for reporting purposes.
Approval of the Establishment of a Venture Fund and an Investment Fund for the Development of the Pharmaceutical Industry
Pursuant to the Decree No. 13, the proposal of JSC "Asakabank" and the Agency to establish a venture fund under the founding ownership of JSC "Asakabank" has been approved, with a deadline set for the end of March 2025. The venture fund, to be registered in the form of a limited liability company, will have an authorized capital of USD 10 million and will finance startup projects in key pharmaceutical sectors, including biopharmaceuticals, cell technologies, and oncology research.
At the same time, the Reconstruction and Development Fund, JSC "Asakabank," and the Agency are to establish the Investment Fund for Prospective Pharmaceutical Industry Projects (the "Investment Fund") under JSC "Asakabank" with no separate legal identity. The Reconstruction and Development Fund and JSC "Asakabank" will each contribute USD 50 million to the Investment Fund.
The Investment Fund is authorized to participate in equity financing in applied research and investment projects within the pharmaceutical sector.
The formation of the Investment Fund’s resources will be contingent upon the approval of pharmaceutical industry investment projects, with the following requirements:
- Feasibility studies of projects financed by the Investment Fund shall be subject to the review by the Scientific and Technical Council under the Agency,
- Import contracts within these projects shall be assessed by the State Unitary Enterprise "Center for Comprehensive Expertise of Projects and Import Contracts".
Within two months, the Reconstruction and Development Fund, JSC "Asakabank," and the Agency are required to submit a draft Regulation on the Investment Fund for consideration by the Cabinet of Ministers of Uzbekistan.
Financing Scientific Research and Startups in the Pharmaceutical Industry
Pursuant to the Decree No. 13, the Ministry of Higher Education, Science, and Innovation, in cooperation with the Ministry of Economy and Finance, has been tasked with ensuring the annual allocation of up to UZS 20 billion from the State Budget to the Science and Innovation Support Fund until 2030.
The allocated funds will be utilized within state programs for scientific activities, specifically for:
- Integrating projects into incubation and acceleration programs,
- Financing scientific research conducted by the Agency for Innovative Development, aimed at the development of domestic medicines,
- Supporting the Agency's startup projects in the pharmaceutical industry.
Support Measures for Reimbursement of Registration Costs and Participation in International Exhibitions and Fairs of Domestic Pharmaceutical Manufacturers
Pursuant to the Decree No. 13, the Trade Facilitation Fund is authorized to provide financial compensation to domestic pharmaceutical manufacturers based on their stability rating, as follows:
- 100% reimbursement of expenses related to the registration of medicines by domestic manufacturers with the US Food and Drug Administration (FDA) or the European Medicines Agency (EMA), upon submission of supporting registration documents,
- 50% reimbursement of expenses incurred for the registration of pharmaceutical products by domestic manufacturers in foreign countries, upon submission of supporting registration documents.
Additionally, the Trade Facilitation Fund will introduce a 100% prepayment mechanism to cover the participation costs of domestic pharmaceutical enterprises in prestigious international exhibitions and fairs with exhibition stands, based on applications submitted by the Agency.
Agency's Structural Unit to Provide Consulting Support to Pharmaceutical Enterprises
Pursuant to the Decree No. 13, the State Enterprise "Pharm Service" is being established within the organizational structure of the Agency. The institution will specialize in providing marketing and consulting services aimed at assisting pharmaceutical enterprises in the implementation of advanced industry standards.
The State Enterprise "Pharm Service" has been assigned the following core areas of activity:
- Supporting domestic pharmaceutical enterprises in registration of pharmaceutical products, providing legal and consulting assistance in the implementation of national and international standards, as well as offering marketing services,
- Facilitating the participation of domestic enterprises in prestigious international pharmaceutical exhibitions and fairs, including assistance in organizing exhibition stands,
- Overseeing the digitalization of the pharmaceutical industry,
- Providing consulting services on the design and construction of pharmaceutical enterprises.
The funding sources for the State Enterprise "Pharm Service" include:
- Funds from the Pharmaceutical Industry Support and Development Fund,
- Revenue from paid services,
- Charitable donations from individuals and legal entities.
Additional Responsibilities Assigned to the Agency and WHO Prequalification Requirement for the Pharmaceutical Safety Center Laboratory
Pursuant to the Decree No. 13, the Agency has been assigned an additional responsibility — the development of the biologically active supplements and cosmetic products industry. This includes market research and analysis, product localization, and facilitating the adoption of advanced international practices and standards by industry enterprises.
Additionally, under the Decree No. 13, the Ministry of Health has been instructed to ensure that the Pharmaceutical Safety Center Laboratory undergoes the World Health Organization (WHO) prequalification process by the end of 2025. This certification will confirm the laboratory’s compliance with international standards and regulations for conducting chemical and microbiological research.
Contacts:
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Zafar Vakhidov Partner, Vakhidov & Partners Uzbekistan / Kazakhstan |
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Kamila Sharipova Senior Associate, Vakhidov & Partners Uzbekistan |