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In 2005 the APP program was implemented nearly without any mishaps, which provided grounds for the belief that in 2006 the dynamic of the indices pertaining to the APP programs, that is, the average cost of a prescription issued by a physician, the average monthly number of issued prescriptions, and the number of persons placed within the established categories of citizens, would be developing as before. However, this forecast proved to be unrealistic, and in 2006 the APP program was faced with some serious problems, the most important among which was the dramatically increased need in the financial backing of the pharmaceuticals delivered on preferential terms (free of charge or at a reduced price), coupled with the budget constraints established and approved in the budget of the federal system of mandatory medical insurance.

Resulting from the crisis situation that had emerged in the sphere of the provision of pharmaceuticals on preferential terms in the Russian Federation, some proposals were prepared by various related agencies of executive authority (including the RF Ministry for Economic Development and Trade) and submitted to the RF Ministry of Public Health Care and Social Development, which supervises the implementation of the APP program.

It should be noted that much has already been said about the risks associated with the APP program, including in the publications issued by the Institute for the Economy in Transition. Below we are going to attempt to determine the factors influencing the APP programs implementation and the measures capable of relatively reconciliating the interests of all the subjects involved in the APP program.

The problems posed by the withdrawal from the APP program.

The withdrawal from the APP program, in 2006, of 7.5 million citizens to whom Law No122-FZ can be applied has resulted in the diminishment of the amount of resources initially earmarked for covering the cost of the medications provided for those citizens who remained within the program. When those citizens who were relatively less in need of pharmaceuticals withdrew from the APP program, the solidarity principle of the distribution of funding was upset. The initially established per capita provision standard was calculated on the basis of the total contingent of privileged categories of citizens, and thereby its relatively small size was preserved (in 2006 424 roubles.) After those not in need of pharmaceuticals had been excluded from the program, and the money earmarked for them had been withdrawn, this standard estimate 424 roubles per capita was no longer sufficient for covering the needs of one citizen from the privileged category. The estimated needs of those citizens who remained in the program, as demonstrated by the results of 2006, turned out to be substantially higher.

Among the potential measures designed to relieve the crisis currently faced by the APP program and being now actively discussed, the imposition of restrictions on the withdrawal from it has not been suggested.

No such proposal has been put forth by the RF Ministry of Public Health Care and Social Development, either, the reason for which is probably the political implications with which this problem is fraught.

In our opinion, if the inertia scenario of the situations development is realized, the negative selection will continue. Therefore, it would be feasible, as one of the available alternatives, to coordinate the choice of a citizen as to whether he or she is going to stay within the APP system or not with the budget cycle for example, by shifting the timeline for such a choice from the autumn to the spring of the year preceding the implementation of the APP program. Also, another option is possible the reduction of the amount of money compensation for those who has decided to leave the APP program by comparison with the average per capita standard established for the whole prefenetial contingent.

The problems associated with the expansion of the range of persons to whom Law No 122-FZ of the Russian Federation applies.

One more important problem is represented by the control over the process of recognizing a citizen as disabled. During the year 2005, the number of citizens targeted by Law FZ-122 increased from 14.2 million to 16.4 million. According to the data published by the Ministry of Public Health Care and Social Development, as of 1 January 2007 the number of persons with a privileged status was 17, 027, 220. This growth can largely be explained by the expansion of the range of persons granted the status of disability. The substantiation for disability in many instances appears dubious and must be confirmed by a more rigorous medical experts estimation. The RF Ministry of Public Health Care and Social Development, being well aware of this risk, has begun to work at improving the performance of the bureaus for medico social expertise, but the positive results achieved so far are insufficient for stabilizing the numbers of persons recognized as disabled.

The list of pharmaceuticals prescribed under the APP program.

During 2006, substantial cuts were made in the list of pharmaceuticals covered by the APP program from 1,740 trade names and 496 international non-patented names as of 31 March 2006 to 1386 trade names as of the end of 2006. According to the RF Ministry of Public Health Care and Social Development, from the beginning of 2007, 550 trade names of pharmaceuticals have been supplied to regions.

In our opinion, the APP programs cost can be brought down by making more precise the list of pharmaceuticals, with its simultaneous inventory, and by replacing the expensive items by their cheaper analogues, as well as by establishing an ultimate timeline for making changes to it (with no subsequent revisions during one year).

The optimization of medical care standards.

Among the proposals being put forth by the RF Ministry of Public Health Care and Social Development and aimed at improving the infrastructure for providing the population with pharmaceuticals, there is a proposal for the optimization of the medical care standards applied in the treatments of certain diseases, based on medical proof and cost-effectiveness of pharmaceuticals. This measure, indeed, has long been needed not only in terms of the financial and economic estimation of the already developed medical care standards, but also in connection with the medical care standards and tables of supplies to hospitals and outpatient clinics presently being developed. The financial feasibility study of the developed medical care standards, and first of all for those diseases in the treatment of which the most expensive pharmaceuticals are applied, would make it possible to optimize the list of pharmaceuticals to be used under the APP program.

Covering the cost of pharmaceuticals applied under the APP program In accordance with the approved plan of measures for optimizing the provision of necessary pharmaceuticals to the population, at present the RF Ministry of Public Health Care and Social Development is dealing with the problems created by the overpricing of pharmaceuticals being supplied within the APP programs framework, by carrying out experts estimations of the invoices prepared by pharmaceutical organizations for the pharmaceuticals supplied in 2006 and submitted for payment to the territorial funds of mandatory medical insurance. As estimated by the RF Ministry of Public Health Care and Social Development, a thorough experts estimation of the prescriptions issued in 2006 will result in up to 20 % of prescriptions being rejected.

In our opinion, in order to improve the control over the cost of the APP program, it will be necessary to establish the mechanism of basic prices, where emphasis is to be placed on the price of a less expensive pharmaceutical with a similar pharmacological effect, which is to be taken as a basic price. In this connection, two options are possible. The first one will be for a citizen to cover the difference between the basic price and the more expensive pharmaceutical. In this case, the systems solidarity will become lower, but the rationality of a citizens behavior in the choice of a more expensive pharmaceutical will be higher. The second option will be to establish a certain price bracket above the basic price within which a physician will be able to issue a prescription, and above the upper margin of that price bracket the prescription of a pharmaceutical must be executed by a special board.

Insurance companies within the APP system.

Insurance companies, contrary to the initial plans, have failed to become fully fledged participants in the APP system. For the year 2007, the RF Ministry of Public Health Care and Social Development has extended its policy of preventing the participation of insurance companies in the APP program, having submitted to the Government of the Russian Federation a draft decree of the Government of the Russian Federation On making amendments to Item 1 of Decree of the Government of the Russian Federation of 29 December 2004, No 864. At the same time, both the Ministry of Public Health Care and Social Development and the insurers also have a general understanding of the potential of insurance companies for becoming informed buyers of pharmaceuticals for the needs of certain categories of citizens, but for such cooperation to be realized the insurers will need clearly determined and transparent rules.

It is noteworthy that the transfer of the functions of buyers of pharmaceuticals for privileged categories of citizens to insurance companies, with the implementation of a system for distributing the risks associated with the deviation of actual costs from the planned targets between an insurer and an outpatient clinic, on the one hand, and between an insurer and a territorial fund for mandatory medical insurance, on the other, will be possible only in the event of implementing the whole set of measures determined, in particular, in our materials. Only by increasing the responsibility of outpatient clinics for the procedure of prescribing pharmaceuticals and creating for them appropriate incentives for taking into account the financial aspect with the help of insurance companies will it become possible to decrease, on a large scale, the cost of pharmaceuticals being prescribed, and thus to provide an instrument for controlling the growth of the APP programs cost in the federal budget and the budgets of subjects of the Russian Federation.

M. Gladkov Introduction of a two-stage system of higher professional education This review outlines the main provisions of a two-stage system of higher professional education adopted by the Russian government, contains a forecast assessment of to what extent this change will make it possible to improve the quality of education and the efficiency of the use of budget funds, and also identifies possible risks linked to the transition to the new system.

At a government session on 9 March, the Russian Ministry of Science and Education presented draft law "On amendments to several legislative acts of the Russian Federation (in terms of setting up levels of higher professional education)". The draft law envisages the establishment in Russia of two levels of higher education: a bachelor's degree at the first level and a master's degree or professional training at the second level.

The Russian system of higher education has been set the task to join the Bologna process by 2010. This task implies that by that time the list of professions that require one-stage training (professional qualification) and the list of professions that require two-stage training (both bachelor's and master's degree) will be defined.

At the moment Federal Law of 22 August 1996 "On higher and postgraduate professional education" envisages that main curricula in higher professional education can be implemented continuously and along the following steps: a bachelor's degree (at least four years of studying the main curricula); professional qualification (at least five years of studying the main curricula, with the exception of cases covered by the relevant state education standards); a mater's degree (at least six years of studying the main curricula).

The draft law views studies for a bachelor's or master's degree or for a professional qualification as independent levels of higher education with separate state education standards and independent examinations on the basis of which a bachelor's or a master's degree or a professional qualification is awarded. The licensing, certification and state accreditation of higher educational establishments under a bachelor's, a master's or a professional qualification programmes are also proposed to be separated.

Admission to higher education establishments to study for a professional qualification, a list of which is set by the Russian government, or for a bachelor's degree will be carried out on the basis of applications from individuals who have completed secondary education or vocational training, on a competitive basis on the strength of the single state examination. Competition for admission to the second level of professional higher education is provided for in Article 43 of the Russian Constitution, under which everyone has the right on a competitive basis - to receive free-of-charge higher education in a state or municipal education establishment and at work. The introduction of competition at the second stage of higher professional education will make it possible to enrol individuals who are best suited and prepared for mastering the curricula at this level. This is particularly relevant for creating flexible, customized education routes, for example entering the second level after gaining some professional experience or choosing a new area of studies for one's second stage of professional higher education.

The bill sets the required duration of studies for a bachelor's degree from three to four years, depending on the subject; for a master's degree following a bachelor's degree two years; for a professional qualification at least five years. Postgraduate studies are open only to those who have a master's degree or a professional qualification. For some subjects and professions (for example, medicine) another duration of studies may be stipulated. A list of subjects (professions) for which the state education standard may set a different duration of studies to obtain a bachelor's or a master's degree or a professional qualification will be approved by the government of the Russian Federation.

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