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Corruption risks while limiting the circulation of medicatesduring a Martial law: How one law can destroy the health of millions of Ukrainians

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Corruption risks while limiting the circulation of medicatesduring a Martial law: How one law can destroy the health of millions of Ukrainians

On May 22, 2022, the Verkhovna Rada of Ukraine accepted the Law of Ukraine «On corrections to the Law of Ukraine «on Medical Drugs» concerning limitation of circulation of medicines, production of which is located on the territory of the russian federation or republic of belarus, and also on export of medical drugs from Ukraine» (the Law). Its goal is to limit the circulation of medicines in Ukraine, the production of which is at least partially located in the Russian Federation or Belarus, so that the world will also refuse these supplies. At the same time, despite the proper goal, the Law contained unclear reasons for limiting the circulation of medicines. As a result, under the slogan of fighting medicates that produced in russia can now ban European medicates, which provide more than half of the Ukrainian market of health-critical medicates. National Agency on Corruption Prevention (NACP) analyzed these changes to the Law and prepared an individual examination «Corruption risks during limitation of medicate circulation in the conditions of martial law», where has identified a number of corruption risks that can lead to catastrophic consequences if the situation does not change.

What corruption risks did NACP detect?

  • Lobbying interests of certain firms because of the conflict of interests among members of the Commission of the Ministry of Health of Ukraine (MOH).
  • An unreasonable approach to the choice of pharmaceutical companies to stop the circulation of their medicines.
  • Manipulation of criteria to stop the registration of medicate certificate and remove pharmaceutical companies from the market.
  • Falsification of data on readiness to meet the needs of the country in medicine.
  • Absence of a defined procedure for renewal of registration certificate of a medical device as a possibility of corruption abuses.
  • The closure of the procedure of stopping the circulation of medicates.

Non-transparency of involvement of professional associations, institutions and organizations in membership of the Commission. Let’s consider the situation on the example of a corrupt formal who can use these risks for profit.

Formal A receives money for lobbying the Pharma Company B. Involves the Ministry of Health, which determines who to annul the registration of medicate certificate, representative of a company as a member of an association (to increase the influence of decision-making in favor of this firm). In addition, the Pharma Company can simply offer a Formal A list of medicines, licenses for which should be annulled. Without clear criteria and open procedures, through which certain companies can get rid of licenses, it can be done with almost all producers in favor of Ukrainian pharmaceutical businesses.

What consequences do Ukrainians expect if these risks are not eliminated? Exit of foreign pharmaceutical manufacturers from the market segment of Ukraine will have a number of negative consequences. In particular:

  • patients may not get essential medicines: in addition to corruption and economic risks, the corresponding changes to the legal acts can cause difficulties of access of ukrainians to treatment, as well as the complete absence of essential medicines;
  • loss of budget funds when purchasing medicines: lack of competition during public procurement will lead to price distortions and, accordingly, to unjustified budget spendings;
  • the quality of medicines can deteriorate: an amount of medicates have a few analogues, so the exit of European pharmacological companies from the market will lead to a lack of competition;
  • incomes to the budget of Ukraine will decrease: large multinational companies will reduce resources in Ukraine;
  • people lose their jobs: international pharmaceutical giant companies have large teams in Ukraine, restrictions in the circulation of medicines will affect the staff, most of whom will lose their jobs during the war;
  • medicates will become more expensive: lack of competitors will inevitably lead to uncontrolled growth of paint prices in retail outlets;
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