No properly formed and subsequent regulation concept has been presented until now by a number of the issues, which are essential for the pharmaceutical branch. This concerns the position on the pharmaceutical market and participation of state structures in the circulation of medicinal preparations (MP). In the growth of consolidation on the pharmaceutical market, which results in merging of business players, increased concentration and change in the competitional environment, an increase of qualitative attributes of the pharmaceutical market doesn’t warrant growing affordability of drug supply because it has a territorial irregularity, can be accompanied with negative phenomena both in relation to population servicing indicators and profitability of pharmacy business.

Importance of comprehension and distinct, subsequent legalization of the state position on these issues is of principal value as it directly influences how affordability of medicines, one of the most important warranties in the field of health protection, is being implemented.

It is pressing to examine the condition and affordability of drug supply from the perspective of public interests in the sphere of development of regional pharmaceutical markets, affordability of pharmaceutical services for the population from different territories depending on its density, retail infrastructure, and detection of key segments in distribution of social load between participants of the pharmaceutical market.

The purpose of this study was to analyze the structure and condition of the state segment of the regional drug retail market considering assessment of its value in the system of drug supply, prospects and risks for the development established considering the problems of acting and suggested legal regulation.

Methods represent content analysis of regulatory instruments in the field of pharmaceutical activity, regulation of competitive markets, methods of a retrospective and statistical analysis, modeling, comparative and predictive analysis.

RESULTS

Structure and legal conditions of the presence of the state segment on the drug retail market

Legal and institutional structure of the state segment on the regional drug retail market for over than 20 years underwent changes towards complication. It is not homogenous today.

Impossibility to ensure provision of certain social services using the market instruments only resulted in active development of state and municipal unitary pharmaceutical enterprises with the liability established by the legislation as far as decision of these tasks by the state bodies of the entities of the Russian Federation and local authorities goes. The legal basis was established by Federal Law as of November 14, 2002 No. 161-FZ ‘Concerning state and municipal unitary enterprises’. According to it, creation and functioning of enterprises with a respective organizational and legal form were provided if ‘it is necessary to perform an activity to solve social tasks (including implementation of certain goods and services at a minimum cost) …’.

However, the measures were not sufficient and totally effective. The mechanisms that ensure control over compliance of the activity of unitary enterprises with the purposes of their establishment set by the law were not legally determined [1]. Under real economic conditions, the most important task of drug supply affordability for rural population was not solved along with performance of social pharmaceutical services (preferential provision of medicines, discharge of narcotic agents and psychotropic substances, drug preparation).

As a response to the social request established by Federal Law ‘Concerning Circulation of Medicines’, provisions on retail trade of medicines by medical organizations and their rural subdivisions have been introduced considering the following peculiarities:

1) Pharmaceutical activity is performed by medical organizations and their subdivisions in accordance with a close list of their subdivisions (outpatient departments, feldsher stations (FS) and feldsher-midwife stations (FMS), departments of general medical and family practice).

In accordance with the terms accepted by Federal Law No. 61-FZ, the subjects (objects) of retail trade of medicines are not pharmacies.

Thus, rules of binding nature which relate to the provision of pharmaceutical services are associated not with pharmacies, but with medical companies with initially different tasks of the basic statutory activity. To develop the standard, order of the Ministry of Health and Social Development of Russia as of May 15, 2012 No. 543н ‘Concerning Approval of the Provision on Organization of Primary Medical and Sanitary Aid to Adults’ states that the basic tasks of FMS include ‘implementation of medicines and medical devices in the lack of pharmacies on the settlement territory’ (par. 11 of Exhibit No. 15 to Provision on Organization of Primary Medical and Sanitary Aid to Adults, approved by Order of the Ministry of Health and Social Development of Russia as of May 15, 2012 No, 543н).

2) Retail trade of medicines by a medical subdivision is implemented using the territorial location in a village in case of obligatory presence of such a qualifying attribute as a lack of pharmacies in the village.

Thus, the legal field determines how to solve the social and economic issue using not the market (competitive), but administration and organization method as the only possible one under the prevailing conditions. Moreover, it is obligatory to exclude this scheme from the competitive environment.

Thus, the task can be solved beyond industry not by way of intersectoral cooperation but through a transfer of functionality of subjects of retail trade of medicines to institutions of public healthcare with a complete set of civil and administrative legal relations, including the ones of a delicate nature, in the event of liability.

3) Management and organizational decisions to implement the socially significant service are taken by the management healthcare body of the entity of Russia (part 5 article 55 of Federal Law No. 61-Z) and supervisors of a medical organization.

Meanwhile, it should be noted that neither currently invalid order of the Ministry of Health and Social Development of Russia as of August 26, 2010 No. 735н, nor accepted later Rules of Good Pharmacy Practice reflect peculiarities of business processes of organization and functioning of this form of drug retail. Principally different working schemes were practically developed in many regions considering understanding of economic feasibility in the lack of a distinct legal regulation of retail processes in rural medical subdivisions. It was done independently and using organizational means.

The accepted complex of legal and organizational measures resulted in significant qualitative and quantitative changes in the regional and local markets of medicines and increase of a state segment share in their structure. The tendency is not only preserved, but has also been growing stronger.

Meanwhile, various and frequently multidirectional processes occur as far as the functioning of the state segment of the pharmacy sector goes.

The state segment structures on the pharmaceutical market are developed and intensified in a number of regions. At the same time, a tendency of conversion of unitary enterprises into more commercially free structures such as business companies with preservation of the public owner, and establishment by unitary enterprises of business entities as branch organizations with a single management system has been lately observed.

The processes were activated in 2018 following entry into force of changes introduced by Federal Law as of December 31, 2017 No. 505-FZ ‘Concerning introduction of changes into certain legislative acts of the Russian Federation’ into Federal Law as of July 18, 2011 No. 223-FZ ‘Concerning purchase of goods, works and services by separate types of legal entities. In accordance with them, a list of legal entities was expanded including unitary enterprises subject to requirements to organize purchases.

On the contrary, unitary enterprises in some regions were transformed into non-commercial companies such as state and municipal institutions (budgetary institutions and autonomous companies) with preservation of profile functions of wholesale and/or retail trade of drugs:

Thus, the structure of the state segment on the drug retail market was complicated slowly in relation to the subjects involved and a variety of business structures. It was all due to the following tasks:

• warranted provision of social services of drug supply by unitary enterprises and subsequently by companies of other legal organizational forms,
• ensuring competitiveness of the functioning companies within the growing competition and more stringent requirements to performance of financial and economic activities by way of transfer of unitary enterprises and establishment of commercial companies such as business entities;
• to prevent risks of losing control while liquidation of unitary enterprises/privatization of commercial entities, preservation of the resource by public and local authorities by way of transfer of the mentioned economic entities into other, non-commercial companies such as budgetary and autonomous organizations.

In a broad sense, the state segment in the drug retail market is represented by economic entities, establishing and/or coordinating the activity of which are done in direct or indirect involvement of a participant (authorized bodies) of public entities such as constituents of the Russian Federation and municipal formations. This is how the presence of the state segment on the local markets within separate municipal entities and on the entire regional pharmaceutical market has been formed.

In accordance with the narrow legal corporate classification, the state and municipal organizations relate to different forms of property. However, analysis of logics and meaning during the study allows to include these structures into the single state segment on the drug retail market considering their principles and activities.

In the legal aspect, elements of the following types shape the state segment of the regional retail market of medicines at the present stage:

1. pharmacy organizations of state (municipal) unitary enterprises;
2. pharmacy organizations of business entities with a representative of the public owner being included into the composition of the founders;
3. pharmacy organizations of subsidiary economic companies with state (municipal) unitary enterprises being their founder;
4. pharmacy organizations represent separate (structural) units of state (municipal) institutions such as medical organizations;
5. pharmacy organizations represent separate (structural) units of state (municipal) institutions not represented by medical organizations;
6. state (municipal) institutions represented by medical organizations and their subdivisions (feldsher stations (FS), feldsher-midwife stations (FMS), outpatient clinic (OC), GPs) that exercise retail trade of medicines in rural areas with no pharmacy organizations.

The schematic image of the legal structure of the state segment of the regional drug retail market at the present stage is presented in fig. 1.

The used model of the legal structure of the state segment of the regional drug retail market was applied to a certain regional pharmaceutical retail market of medicines in the Kostroma region. Organization of the state segment occupies a valid position in its functioning (fig. 2). In the region, this segment consists of 28 entities, which perform retail trade of medicines within 423 sites including 76 pharmacies and 347 separate medical subdivisions. Legal and organizational forms of the entities that sale medicines, organizational and structural interactions are presented in the figure.

Apart from the subjective composition of the state segment of regional and local retail markets of medicines, it is also necessary to consider quantitative attributes of regional pharmaceutical market participants and their role in provision of socially significant services of giving medicinal aid to population.

Quantitative attributes of the state segment of retail trade of medicines, role in establishing the infrastructure of dispensing medicines and providing socially significant services of medicinal aid

The performed analysis of distribution of objects (implementation sites) in the structure of the state segment of retail market of medicines within the region by the example of the Kostroma pharmaceutical market (fig. 3) clearly shows the correlation in the structure of the state segment of pharmacy organizations (PO) and subdivisions of healthcare institutions.

In accordance with the presented analysis, 84% of places of medicine supply in the market state segment structure of the Kostroma region are represented by healthcare institutions mainly through separate subdivisions of OC, FMS, FS and, to some extent, by establishing pharmacy organizations. 18% can be attributed to pharmacy organizations of unitary enterprises and enterprises of other organizational and legal forms of a state (municipal) origin.

A change in the qualitative composition of the state segment on the drug retail market altered the market infrastructure, promoted a considerable quantitative growth of objects of retail trade of medicines and increased warranted affordability of medicinal aid provided to population owing to healthcare institutions.

Having considered the composition, structural features and tasks of activity of state organizations on the pharmaceutical market, it is necessary to estimate the position and value of the state segment in relation to other participants of the entire regional market.

Analysis of the pharmaceutical market in the Kostroma region regarding detection of the state segment share is presented in table ‘Distribution of retail trade objects of medicines in the structure of the pharmaceutical market in the Kostroma region regarding detection of the state segment share (table). State pharmacy organizations and separate subdivisions of medical organizations, which retail medicines, account for 10% and 47% in the structure of regional market objects, respectively. Thus, in total, the state objects have a share of up to 57% of the whole retail market of medicines in the Kostroma region.

The state segment occupies even a more significant share in municipal entities with rural population (except for municipalities). In this case, state pharmacy organizations and separate subdivisions of medical institutions retailing medicines have totally made 83% of the structure of the mentioned local markets. The analysis is clearly demonstrated in fig. 4.

During analysis of distribution of pharmacy organizations in municipal districts and urban areas of the Kostroma region, a difference in the approaches to development strategies and territorial location among state and private pharmacies of the regional pharmaceutical market has been found out. The obtained results (table, fig. 4) confirm the available regularity of distribution of state pharmacy organizations within the region: the share of their presence in municipal districts with rural population almost corresponds to the share in the retail regional market of medicines (9% and 10%, respectively).

At the same time, private business is presented mainly in urban areas forming the largest market concentration. Thus, the share of private pharmacy organizations in the structure of regional retail market of medicines mainly constitutes 42.7% and decreases to 17% in municipal districts with rural population. So, while moving away from the largest settlements to remote regions with a lower population density, business becomes much less interested in opening the dispensing centers.

Lack of interest of private business in performing an activity within remote and economically unattractive areas results in irregular territorial distribution of private pharmacy organizations on the regional pharmaceutical market. The action of market mechanisms doesn’t completely ensure creation of accessible infrastructure of pharmacy servicing of population. This task is mainly solved using the administrative management resource by state pharmacy structures.

There is also a difference in approaches to the activity of state and private pharmacy organizations regarding socially significant services. In the Kostroma region, 30 pharmacy organizations dispensing narcotic drugs and psychotropic substances and 47 organizations providing service to population as far as privileged vacation leave goes have a share of 96% and 93% of state/municipal segment, respectively (fig. 5). Thus, pharmacy organizations of the state segment are presented in all 30 municipal entities and carry a complete load on provision of socially significant services.

Increased role of healthcare institutions regarding provision of medicinal aid on the regional drug retail market

Another marked peculiarity of the pharmaceutical market and state segment, in particular, means performing functions of retail sale by non-commercial structures such as public healthcare institutions. In accordance with Federal Law as of April 12, 2021 No. 61-FZ ‘Concerning circulation of medicines’, retail trade of medicines in rural areas is done by medical organizations if pharmacy organizations are lacking. This confirms a lack of competitive environment and its value under the given conditions.

In accordance with the performed analysis, 19 medical organizations without establishment of a pharmacy organization carry out a retail trade. It constitutes 20% of the total number of retail subjects of medicines within the region. This form of retail trade of medicines is seen in the majority of municipal formations, except for urban areas. From among objects of retail trade of medicines (places of sale), 347 are subdivisions of medical organizations such as OC, FMS, FS (see table), constituting 47% of the total number of places of retail sale within the region and 82% (fig. 3) in the structure of the state segment on the regional market of retail trade of medicines [2].

Availability of the state segment on the local markets of retail sale of medicines in 24 municipal regions with rural population constitutes 74% of the total number of places dispensing medicines in these regions. There is a variation of this parameter in different municipal formations depending on the territorial remoteness of regional and district centers, involvement of other market participants in the retail trade of medicines and whether business structures are interested in promotion to the regional settlements. A smaller proportion of medical organizations in the sector of retail trade of medicines is observed for the Pavinsky district (40%), Neisky district (57%), Nerekhta and Manturovsky districts (62%) in relation to other areas. However, a significant contribution to the infrastructure of medicine dispensing is done. Meanwhile, in the Galichsky, Buysky and Kadyysky districts, the retail trade sale of medicines was 100%, 92.8% and 86.4% formed at the expense of healthcare institutions, respectively.

Depending on the share of medical organizations and their separate subdivisions on the local market (FMS, FS, OC), which perform retail sale of medicines, municipal areas (MA) of the Kostroma region can be subdivided into three groups by a number of objects:

• first group: MA with a share of medical organizations from 40% to 60% — 2 municipal districts (8% of MA);
• second group: MA with a share of medical organizations from 61% to 80% — 16 municipal districts (67% of MA);
• third group: MA with a share of medical organizations from 81% to 100% — 6 municipal districts (25% of МР).

Distribution of municipal areas by the share of a presence of objects such as subdivisions of medical organizations in the structure of the local market of retail sale of medicines is presented in fig. 6. Based on the analysis results, the second group is the most numerous one (67%). It is represented by municipal areas with a share of objects of medical organizations in the structure of retail sale of medicines from 61% to 80%.

Thus, state medical organizations introduce a significant or principal contribution into formation of the structure of local retail markets of medicines within the municipal districts with rural areas. Thus, medicinal aid is made affordable to rural population.

Primary targets performed by participants of the state retail market of medicines have differences. Subdivisions of state medical organizations are used to approach provision of medicinal aid to rural population, overcome the issues of territorial and transportation access and irregular social and economic development of the settlements. In their turn, pharmacy organizations within the state segment, which are significantly behind medical organizations by a number of dispensing sites, play an exceptionally significant role on the regional retail market of medicines. They also provide the most comprehensive set of social services in the system of medicinal aid (preferential medication supply, dispense of narcotic drugs and psychotropic substances, preparation of medicines).

In this regard, comprehension and assessment of prospects for development of the structures of the state segments on the regional pharmaceutical market, presence of risks of development associated with the tendencies of legal regulation are of primary importance.

Peculiarities of legal regulation of the activity of state segment organizations on the market of medicinal preparations considering the risks of regulating effect

It should be noted that the value of the state segment has increased not just in the sphere of retail sale of medicines, but also on the pharmaceutical market. Serious risks occurred during the pandemic while solving acute and urgent issues of population and healthcare system supply with medical and pharmaceutical products in large quantities. Conditions of spreading the coronavirus infection, a rapidly growing demand, and an exponential increase in needs resulted both in higher prices for medicines and medical devices, and disbalance in the physical distribution system in the commercial segment of the pharmaceutical market, and emergence of product deficit. It required to take legal, management and organizational measures of state involvement and attraction of public control.

To modernize drug supply, a federal center of planning and organization of drug supply of citizens was established in 2020. It is intended for purchase of medicines to implement the Healthcare National Project, federal programs, National Immunization Schedule, provision of orphan patients, analyze purchase and predict the regional need in medicines as this could prevent possible interruptions in the supply of medicines and form the required reserve beforehand. The center allows to address the issues with current and urgent purchases in the face of diseases in a complex fashion [3]. Here we have an issue of the restored centralized system of drug supply in the most strategically important trends of drug supply.

During the influence of pandemic and economic sanctions, the state segment of regional pharmaceutical markets also underwent the increased load associated with the support of distribution chains and supply of customers and healthcare institutions with medicines. These tasks are mainly solved using state wholesale and retail pharmaceutical enterprises.

At the same time, in accordance with par. 4a of the National plan of competition development that limits establishment of unitary enterprises on competitive markets [4], amendments introduced by Federal Law as of December 27, 2019 No. 485-FZ to the legislation acts entered in force in 2020:

• amendments of Federal Law as of November 14, 2002 No. 161-FZ ‘Concerning the state and municipal unitary enterprises’ reconsider the targets of establishing unitary enterprises (article 4) and exclude the possibility of establishing such enterprises on competitive markets;
• Federal Law as of July 26, 2006 No. 135-FZ ‘Concerning protection of competition’ is complemented by article 35.1 ‘Prohibition to establish unitary enterprises and exercise their activity on competitive markets’.

Unitary enterprises established on competitive markets until January 08, 2020 are subject to elimination or reorganization until January 01, 2025 and, if the decision was not accepted or executed, should be liquidated in a legal proceeding on the claim of the antimonopoly authority.

In accordance with the FAS, restructuring of unitary enterprises into other organizational and legal forms such as a joint stock company or a limited liability company will allow accounting of both the state and municipal property and rental revenue. This will involve a budget revenue increase, whereas involvement of unitary enterprises and their property in the market relations will significantly reduce state expenses and bring additional income to the state [1]. This position is aimed on an increased effectiveness of managing the state (municipal) property. However, the social constituent (functioning of socially significant labor markets including the drug market) is not taken into account in this case.

By 2025, the public and local authorities will have to dissolve unitary enterprises or reorganize them by way of transformation and introducing changes in the organizational and legal status if they intend to save the resource of influence. Thus, the state management bodies will consider an exit of liquidated unitary enterprises from the market as a loss of a serious resource of influence on the regional pharmaceutical market regarding organization of affordable retail sale of medicines and performance of socially significant tasks in the field of drug supply that require a rapid response.

When unitary enterprises are transformed into business corporations, the coordinating role of authorized bodies can be reduced. Moreover, privatization of property and review of leasing obligations can result in closure or reprofiling of certain objects and, as a consequence, loss of structural market units, refusal from some social load and need to search for alternative solutions.

The legislative initiative seen in draft law No. 912246–7 [5], which is associated with the establishment of mobile pharmacies to increase affordability of drug supply, is definitely a justified and necessary measure. It is correlated with the tendencies of organization of primary medical aid at the modern stage, when mobile complexes are widely used. The mobile form still has serious usage-related limitations due to the lack of year-round accessibility on certain territories. It is not an ideal alternative during provision of socially significant functions of medicinal aid to the population. Thus, the mobile form of medicinal supply of the population can be as an addition to the available properly formed infrastructure of pharmacy objects and services.

Thus, reduction of the state segment on the pharmacy market can lead to the following risks:

• worse affordability of medicinal aid in inaccessible and economically unattractive territories;
• improper further possibility of attributing social functions over the private business subjects due to the lack of compellent legal instruments;
• forced increase of the load on medical institutions engaged in provision of drug services as it is necessary to solve social issues in the lack of alternative options.

Complete transfer of the functionality on medical organizations or private business can inevitably result in the worse quality of services in the area of retail sale of medicines. On the one hand, it happens due to insignificant financial and professional preparedness. On the other hand, it can be explained by reduced motivation and internal liability.

CONCLUSION

The study comprehensively considers development and composite structure of the state segment of the regional drug retail market which includes the objects of activity as part of companies with different organizational and legal forms managed or coordinated by representatives of public entities. A model of the state segment structure was suggested considering the organizational and legal interactions used to examine the regional pharmaceutical market of the Kostroma region.

Distribution of objects within the state segment structure and in the structure of the regional pharmaceutical market was analyzed. The differences in the strategies of functioning and development of the state and private segments of the regional drug retail market have been identified.

Legal preconditions and social and economical conditions of the growing role of healthcare institutions in the system of drug supply of population have been designated.

Controversies in the directions of legal regulation at the modern stage have been found in relation to developmental prospects and significance of the state segment structures. It has been established that the tendencies intensifying participation of the state in the system of drug supply to ensure proper management of budgetary resources and risk prevention were accompanied with previously adopted extra-branch changes of legislation. This could result in reduction of the state segment in economics that would inevitably lead to serious changes in the structure of the pharmaceutical market and redistribution of social load among its participants [2]. In our opinion, this aspect should be designated within industry regulation.

A serious understanding of prospects for functioning of the state segment of retail trade of medicines is required both at the level of regulatory agencies and within the professional community considering the preservation of social services of medicinal aid and decreased risks of negative phenomena on the pharmaceutical market. Apart from establishment of conditions for development of private business and support of entrepreneurship, it is necessary to take into account the value of subjects of the state segment of the pharmaceutical market. Doing this, it is necessary to consider the actual condition and infrastructure of regional markets, economic and professional features of business entities, assessment of the growing role of healthcare institutions in the system of drug supply, and predicted risks from expected changes.