In the last days of September, a high-profile pharmaceutical corruption scandal erupted in Kyiv. Undoubtedly, more twists and new episodes are to come. The State Financial Inspectorate and the Antimonopoly Committee are currently investigating the deal that sparked the scandal. Because the sums involved are tens of millions of hryvnias in the capital alone.
The current scandal is special for two reasons. First, it turns out that local authorities are capable of playing tender games even in areas where Health Ministry officials are no longer willing to take risks. Second, the scandal pits former allies Dmytro Sherembey, head of Patients of Ukraine, and Vitaly Shabunin, leader of the Anti-Corruption Center, on opposite sides of the barricade.
Shabunin and Sherembey once fought side by side in the fight to free themselves from the pharmaceutical mafia. Shortly after the Revolution of Dignity, on April 1, 2014, they both took the stage at the Ukrainian Crisis Media Center and described the schemes that were then thriving within the Ministry of Health. Simulated competition, abuse of trade secrets, and artificially inflated drug prices were the main tools of corruption within the Ukrainian Ministry of Health, as discussed at that briefing. Shabunin and Sherembey appeared before cameras and microphones several times, unanimously lamenting the continued dominance of the pharmaceutical mafia in Ministry of Health tenders.
And then, in the last days of September 2015, a publication appeared on the website of the Anti-Corruption Center (headed by Vitaly Shabunin) alleging that entities belonging to Petro Bagriy had participated in and won a Kyiv city tender for the supply of anti-cancer drugs at prices approximately three times higher than similar purchases by the Ministry of Health. The publication detailed the mechanisms of manipulation, identified the beneficiary of the transaction (Bagriy), and named the companies involved in the sham "tender."
Ultimately, the Anti-Corruption Center's lawyers announced that the materials they had collected had been transferred to the State Financial Inspectorate and the Antimonopoly Committee of Ukraine for further review and response.
In this particular episode, Dmitry Sherembey no longer played the role of patient advocate and fighter against the pharmaceutical mafia. Apparently, this was because the anti-corruption fighters from Vitaly Shabunin's team targeted Petro Bagriy. It was precisely the interests of companies associated with Bagriy that Dmitry Sherembey lobbied for a year ago, when a major scandal erupted around a tender for the supply of hepatitis C treatment drugs. At that time, companies offering cheaper medications were barred from the Ministry of Health tender. At the same time, the website of Sherembey's organization, "Patients of Ukraine," openly stated that they had lobbied for a ban on drugs that competed with those supplied by Bagriy's companies. As a result, Bagriy's company received a contract worth 122 million hryvnias for much more expensive medications.
Let's remember that both organizations—Patients... and the Anti-Corruption Center—rely on donations and grants. Specifically, Patients of Ukraine is funded by a group of respected charitable foundations—the Elton John Foundation, Renaissance, AFH Ukraine, and several others. And, along with quite useful and worthy projects, it turns out that money from such respected foundations can end up in highly dubious lobbying projects. It remains to be hoped that, through the efforts of the Anti-Corruption Center, these cases will also be uncovered. The main thing is that the Antimonopoly Committee of Ukraine and the State Financial Inspectorate promptly reach their conclusions regarding the Kyiv tender.
Oleg Boyko, Antikor
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