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. UP13 (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:

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:

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:

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:

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:

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:

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:

The funding sources for the State Enterprise "Pharm Service" include:

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:            

Zafar Vakhidov

Partner, Vakhidov & Partners

Uzbekistan / Kazakhstan

[email protected]

Kamila Sharipova

Senior Associate, Vakhidov & Partners

Uzbekistan

[email protected]