Offset Contracts on the Manufacturing and Supply of Medicines and Medical Devices as a Form of Private and Public Cooperation

Since 2013, import substitution has become the top priority aim of the Russian Government, especially in the pharmaceutical and medical industries. In this regard, the Government seeks to develop a legal framework that can attract private funds for the development and modernization of those industries. One of the main legal instruments for such developments is public-private cooperation, i.e., a set of institutions and regulations dedicated to the attraction of private investments combined with public financing and/or support and based on risk redistribution between the public and private parties. Offset contract is one of the forms of public-private cooperation, specifically dedicated to pharmaceutical and medical industries. Offset contract was introduced in 2016 as an effective tool for localization of production of medicines and medical devices. It provides guarantees of stable long-term demand for localized products for the private partner in exchange for the creation of new local manufacturing facilities for the public partner. The matter of offset contract as one of the forms of public-private cooperation hasn`t been sufficiently discussed in Russia. It is possible to note two works by Yu.V. Polyakova and A. A. Fedorov, which provide only baseline information about the offset contract in the light of its comparison with a special investment contract, another form of public-private cooperation. This fact proves the relevance of the study. In this study, the author has set the following objectives: to determine offset contract legal nature; to identify differences of the offset contract from other forms of public-private cooperation; to analyze the problems related to the practice of execution of offset contracts in Russia and to develop practical recommendations to promote the application of this form of public-private cooperation in pharmaceutical and medical industries. The subject of this study is issues related to legal regulation and the performance of offset contracts in Russia. The structure of this study is determined by its objectives. The paper is divided into three main parts, except for Introduction, Conclusion, and List of References. The first chapter is dedicated to the general aspects of public-private cooperation. The second chapter is concentrated on the legal regulation of offset contracts under Russian legislation. This chapter also provides an overview of the current situation with the practice of execution of offset contracts, and an attempt to offer new approaches to the regulation of offset contract in Russia. The third chapter focuses on the comparison of offset contracts with other (closest) forms of public-private cooperation.