Results of Research Study on Low-Priced VED Import to Russia (January – November 2017)
Between January and November 2017, 86.3% of all imported ready-made pharmaceuticals from the VED list (in monetary terms) had a lower price than recommended by the State Register. In most cases (60.5% of the volume in monetary terms), the difference did not exceed 10 RUB. The difference is most likely due to the peculiarities of the calculation of actual manufacturer prices, as well as the desire of the companies to insure themselves against exports exceeding the register prices.
For 24.7% of the exports, the price difference amounted to more than 100 RUB, though. The drugs that had the maximum difference are Temomid (Jodas Expoim Pvt.) and Genfatinib (Laboratorio Tuteur), with 76,800 RUB and 74,900 RUB, respectively. This discrepancy can be explained either by declaration errors, or by a purposeful strategy of a company. While errors are possible, they are usually very few. However, serious underinvoicing of ready-made pharmaceuticals is more often of a systemic nature, and this is the result of a very definite strategy of companies participating in foreign trade activities.
This behavior may indicate either a price war within a certain INN, or the optimization of the amount of customs duties and VAT by specific importing companies, and the size of this economy is huge. Over the first 11 months of 2017 alone, importers were able to save around 2.66 bln RUB, including 2.02 bln RUB on VAT, and around 0.64 bln RUB on customs duties by underinvoicing.
The companies that were able to save the most are Teva (299 mln RUB), Baxter (247 mln RUB), and Laboratorio Tuteur (214 mln RUB).
Amounts saved on customs duties and VAT by underinvoicing VEDs (January – November 2017) (single shipments)