On January 5, the website of the Ministry of Economy once again published a draft resolution of the Cabinet of Ministers, which proposes to approve the Procedure for the introduction of state-regulated prices for goods of economic entities that violate the legislation on economic competition (hereinafter – the Procedure).
The Procedure proposed for adoption defines the mechanism of introduction of state-regulated prices for goods of economic entities that have violated the legislation on protection of economic competition (hereinafter – economic entities), which consists in abuse of monopoly position in the form of setting such prices that would be impossible to establish under conditions of the significant competition in the market, or application of different prices or different conditions to equivalent agreements with business entities, sellers or buyers without objectively justified reasons.
As before, the Procedure stipulates that the decision to introduce state-regulated prices will be made, in particular, by the Ministry of Health in the markets of medicines and medical devices (national and regional).
The reason for this will be the decision of the Antimonopoly Committee (AMCU) to recognize the violation of the legislation on protection of economic competition, which consists of the abuse of a monopoly position.
The AMCU will send it to the Ministry of Health no later than 10 working days from the date of the decision, which will start consideration of the introduction of state-regulated prices no later than 5 working days from the date of registration of this decision. letter with a notice of delivery, a request for the following information (hereinafter – the request):
- an explanatory note to the calculation of prices;
- volumes of production and/or sales of goods for the previous and base periods expected changes in the planned period with appropriate justifications;
- calculation of price levels for the planned period;
- calculation of planned costs and dynamics of actual costs for the previous and base period expected changes in the planned period with appropriate justifications;
- calculation of the planned profit taking into account the amount of capital investment for the planned period and the dynamics of the relevant indicators for the previous, base, and planned periods with the appropriate justifications;
- investment program (capital investment plan);
- copies of financial statements (for the previous reporting period).
This information shall be provided by the business entities within the deadlines specified in the request, but not less than 10 working days from the date of its receipt.
At the request of the Ministry of Health, other information related to the calculation of price and cost levels may be provided.
In case of failure to provide such information within the timeframe specified in the request, the Ministry of Health will introduce state-regulated prices, the level of which will be determined on the basis of statistics, administrative data, basic forecast macroeconomic and social development indicators of Ukraine.
Upon receipt of the above information from business entities, but not later than 10 working days after the deadline for providing the information specified in the request, the Ministry of Health will analyze the data obtained.
Based on the results of the analysis, a decision will be made on the expediency or inexpediency of introducing state-regulated prices. Note that the September draft of the Procedure also provided that the results of the analysis of the above information may decide on the method of state regulation of prices in accordance with Art. 13 of the Law of Ukraine “On Prices and Pricing” and the validity of this price regulation. However, the new draft does not contain such provisions.
At present, when deciding on the expediency or inexpediency of introducing state-regulated prices, the following will be taken into account:
- the possibility of entering the market of other entities that are able to compete effectively with the entity that has violated the legislation on protection of economic competition;
- the possibility of eliminating the negative consequences of abuse of monopoly (dominant) position for consumers without the introduction of state-regulated prices;
- negative consequences of the introduction of state-regulated prices for the functioning of the market and their correlation with the expected positive consequences for consumers from their introduction.
The method of state regulation of prices is chosen by the subjects of regulation in accordance with Art. 13 of the Law of Ukraine “On Prices and Pricing”, namely by:
1) establishment of mandatory for use by business entities:
– fixed prices;
– marginal prices;
– marginal levels of trade margin (margin) and supply and marketing margin (supplier fee);
– marginal rates of return;
– the amount of the supplier’s fee;
– the number of surcharges, discounts (reduction factors);
2) introduction of the procedure for declaring price changes and/or price registration.
The validity of state-regulated prices will not exceed 120 calendar days.
It is also noted that state-regulated prices will not be introduced earlier than 2 months after receiving the decision of the AMCU to recognize the violation of the legislation on protection of economic competition.
The relevant decisions of the Ministry of Health will be revoked if the decision of the AMCU is declared invalid by a court or its effect is suspended, or the AMCU has suspended the decision to recognize a violation of economic competition law in connection with its inspection or revision, or revoked.