Ukraine’s Diagnosis is Total Corruption
20 14
Analytical report From the Anti-corruption Action Center Based on the Annual Pharmaceutical Procurement Monitoring Report of Six State Programs Kyiv, 2015
Who Benefitted from Sabotaging Procurement of Pharmaceuticals in 2014
Contents:
2 Treatment Programs and Their Funding in 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Anti-Ń orruption Action Center’s Oversight of procurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-5
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part I: Corrupt Schemes 6-13 14-17
Old Schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . New Schemes 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part II: Systemic Problems 18-19 Misbalance in the Distribution of Funds for Certain Pharmaceuticals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20-23 Proportion of Pharmaceuticals of Local and Foreign Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Misrepresented MoH Statistics in Needs Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25-27 Traps in the MoH Bidding Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28-29 Discriminating Conditions of the MoH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20-31 Exclusive Sales: Intermediary Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part III: Procurement Failure
Pharmaceutical Shortage by Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32-33 34-37 38-39
How to Tackle Corruption inProcurement of medicines. Recommendations of the Anti-corruption Action Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40-41
Comparison of Procurement in 2013 and 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bidding Winners in 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Introduction In 2014, the state failed to perform one of its key national functions, namely providing affordable access to medical care. After the victory of the Revolution of Dignity the new administration in the government and the Ministry failed to observe the right for medical aid guaranteed in the Constitution of Ukraine. The prices for most medicines grew in the bidding process in 2014 compared with 2013. This price growth is believed to result from two key economic factors, namely: hryvnia depreciation and the introduction of a 7% VAT for pharmaceuticals. In addition to the economic reasons political and corruption-related factors also led to the failure of public procurement of pharmaceuticals in 2014. The current national system providing citizens with vital medicines was blocked because of systemic political corruption among officials in the Ministry of Health (MoH) and line ministries. As a result, bidding announcements were continuously delayed, and producers got the chance to re-register their prices of the Wholesale Manufacturers Price Registry. The system of referral prices was established that did not reflect the lowest prices in the regions, and the tenders were blocked via the AMCU agencies. This report contains three parts. First, the authors describe the schemes that existed in the healthcare system in the past, while addressing some new ones that appeared this year. Second, the report also covers other systemic problems that prevent the establishment of a transparent public procurement system for pharmaceuticals and promotes continued corruption in this area. Third, the report describes the consequences of the corrupt practices and systemic problems that became particularly tangible in 2014 and caused the failure of the public procurement program of pharmaceuticals. That failure led to the shortage of the most vital medicines in many regions of Ukraine, which will be clearly demonstrated by this report.
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National Treatment Pprograms and Their Financing in 2014 Access to medical care in Ukraine is provided through national treatment programs and projects. Ukraine had 17 such programs in 2014, and the Ministry of Health was responsible for their implementation.
One of the ways to implement those 17 programs is through the procurement of medicines and agents for both
and diagnosis treatment Budget allocations for the procurement of medicines, medical products and chemical agents for diagnosis in 2014 included
2 266 186 900,00 286 707 100,00 Immunoprophylaxis 54,23% of the total need 197 166 000,00 UN Convention 50,11% of the total need 19 740 300,00 Diabetes mellitus 27,94% of the total need
34 736 800,00 Transplantation 24,09% of the total need
59 688 000,00 Hemophilia 26,04% of the total need 91 558 800,00 Hepatitis 20,53% of the total need
166 218 700,00 Tuberculosis 33,96% of the total need
6 600 000,00 ART 21,70% of the total need
284 468 300,00 HIV/AIDS 33,54% of the total need
32 089 700,00 Reproductive health 28,78%of the total need
277 063 600,00 Adult oncology 14,10% of the total need
221 143 300,00 Cardiovascular diseases 60,76% of the total need
414 669 200,00 Children’s oncology and oncohematology 100,00% of the total need
10 690 900,00 Nephrology 9,77% of the total need
60 915 300,00 Donorship 42,42% of the total need
22 443 000 Prosthetic implants 1,58% of the total need
71 056 500,00 Multiple sclerosis 96,68% of the total need
The covered percentage of the program funding in cash terms is identified following the MoH calculations. At the same time, those calculations are tentative and are often based on underestimated statistical data. Therefore there are reasons to believe that the real percentage of the needs coverage is much lower. For instance, according to the MoH data, the budget covers 100% of treatment costs for children with cancer; however, in reality most of the costs are covered by the benefactors and patients themselves.
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Anti-corruption Action Center’s Oversight of Procurement The Anti-corruption Action Center (AntAC) monitors pharmaceutical procurement for six out of 17 MoH state programs: treatment of HIV infection/AIDS (1) treatment of tuberculosis (2), prevention of cancer in adults (3) prevention of cancer in children (4), prevention of hepatitis in adults (5) prevention of hepatitis in children (6).
90
The state provides the biggest funding for those programs compared with others: UAH 1,241,638,200.00 in 2014, with de-facto spending of UAH 1,127,179,289.04.
Over UAH 30 million of budget money
remained unused Funding for 2014
Agreements signed / funding spent
Unsigned contracts
% of used funding
Medicines
154 283 100,00
152 896 031,35
1 387 068,65
99
Products
11 935 600,00
10 773 612,00
1 161 988,00
90
Medicines
218 520 800,00
214 043 573,97
4 477 226,03
97
Products
65 947 500,00
63 434 433,73
2 513 066,27
96
Oncology/мedicines
173 759 120,00
173 755 796,84
3 323,16
100
Oncohematology/medicines
43 439 780,00
43 439 719,16
60,84
100
Chronic myeloid leukemia
59 864 700,00
59 861 813,40
2 886,60
100
11 626 061,44
97
Program / area 1
Tuberculosis
2
AIDS
3
4
Adult oncology
Children’s oncology and onco-hematology
The AntAC team has monitored tenders
Measure
Medicines Products
367 617 623,31 414 669 200,00
Reagents
34 066 238,80 1 359 276,45
5
United Nations Convention on the Rights of the Child
Hepatitis/мedicines
7 659 600,00
5 931 170,03
1 728 429,97
77
6
Hepatitis
Hepatitis В and С
91 558 800,00
83 856 963,07
7 701 836,93
91
1 241 638 200,00
1 211 036 252,11
30 601 947,89
97,54
Total
8
-50% 1 127 179 289, 04,
Ineffective Use of Funds
The analysis has shown that of all the money allocated to the six programs monitored by Anti-corruption Action Center,
were spent eather with considerable violations or ineffectively
New corruption schemes were added after the Revolution of Dignity to the arrangements that had already existed in the public procurement of pharmaceuticals. Instead of fighting corruption mechanisms that had existed in public procurement in the past4, the government created many more problems and corruption mechanisms.
2013 Schemes
Cartel collusions
Wholesale Factory Price Registry
Fighting competitors, blockage of similar alternative medicines
Singlepharmaceutical bids
2014 Schemes
Procurement blockage
Untimely/ delayed bidding
Change of procurement terms
Bids cancellation
Corruption schemes that existed in 2013 were described in detail in the analytic report Who Benefits from HIV/AIDS and TB Epidemics in Ukraine. 4
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Old schemes Scheme No 1 Cartel Collusions / Backroom Deals
2
Backroom deals between companies to distribute contracts at the public biddings.
Key forms of cartel collusions un pharmaceutical public procurement: Cartel collusions between several companies that belong to different owners but coordinate their actions at biddings; Biddings simulation between companies controlled by the same de-facto owner (e.g., the so-called Bahriy’s Group); The above schemes and their participants stayed on in 2014. Although, the configuration of participants slightly changed, the key players kept their positions.
40% The Security Service of Ukraine has estimated that pharmaceutical public procurement prices were overestimated 40% in 2012-2013. The monopolist companies maintained that corruption margin and transferred it to the public officials’ pockets as kickbacks to preserve their oligopoly (control) over the market.
Cartel collusions have led to a market oligopoly, a situation where each of a small number of players holds a significant share and can control market price with own actions. When the bidding nevertheless becomes competitive, the MoH uses different sorts of ‘traps’ built into the technical requirements for the commodities in the bidding documents. This may include lots merger, as well as the announcement of the procurement of specific pharmaceutical forms or dosages only. 10
Examples of Cartel Collusions Between Different Owners
1,26
UAH
The AntAC experts presume that Liudmyla Pharm’s competitors play only a formal role. Among them is Medpharmkom Center LLC controlled by the Swiss offshore company PALMA GROUP SA. The final signature right in PALMA GROUP belongs to its nominal director Francois Zurcher, who has worked and continues working in 63 other companies at the same time.
2013
billion of
damages were inflicted by Liudmyla Pharm to the state budget of Ukraine through pharmaceutical overpricing according to the SSU data in 20122014
2014
Liudmyla
vs.
12%
3
₴52 lot 2, s for 2 m
ln
of all money for TB in 2013
Liudmyla
Medpharmkom
17%
2
₴16 lot 16 s fo mr ln
of all money for children’s oncology in 2013
In 2013, Liudmyla Pharm LLC with Medpharmkomtsentr Private JSC won bids for 12% of TB contracts and 20% of contracts for children’s oncology.
11
vs.
Medpharmkom
12% of all money allocated for TB in the bidding for the same drug, Moxifloxacin
26,5% of all the funding for children’s oncology in 2014
In 2014, Liudmyla Pharm LLC shared with Medfarmkomtsentr Private JSC bids for 12% of TB funds and 26.5% of funds for children’s oncology.
Old schemes Scheme No 1 Cartel Collusions/ Bbackroom Deals
owned share
Sumy Pharmacy Company LLC
formal owner
Serhiy Siora
ber num e n pho tele red e t s i reg tical iden
was a registered founder of SPC until 2006
Hanza LLC Identical registration address
Lumier Pharma LLC
lls se
Petro BAHRIY President of the Ukrainian Pharmaceutical Producers’ Association, mentioned in V. Konovaliuk’s report (drafted following instructions of the Parliamentary Committee for Healthcare in 2008), which describes in detail how almost one half of the budget healthcare allocations was laundered in 2005–2007.
Identical prior address
Lumier Pharm LLC positions itself as a Ukrainian pharmaceuticals producer. However, its production is mostly repackaging into smaller packages. It does not submit bids to MoH tenders but sells anti-TB medicines to other companies of Bahriy ’s Group.
Pharmaceuticals of the Regions LLC were members of so-called Bahriy’s Group in 2005-2007, according to V. Konovaliuk’s report.
to ls ica t eu ac m r a ph
sells pharmaceuticals to
Identical prior address
Pharmadis LLC
Ukrpostach LLC
se lls ph arm ac eu tic als to
Sky Pharm LLC New Bahriy’s Group: these companies constantly ‘compete’ against each other imitating fair competition.
Under those six programs, Bahriy Group companies won
12
UAH 194 mln in 2013 UAH 478 mln in 2014
Anti-HIV/AIDS drugs (antiretrovirals)
98 lots in 2013 were won by companies of Bahriy ’s Group
Three clone companies controlled by Petro Bahriy participate in competitive bidding for pharmaceutical supplies on a regular basis. They divide a share of the lots amongst themselves while imitating competition. Bahriy ’s Group companies won
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Anti-hepatitis drugs (for adults)
Sky Pharm
Pharmadis
Lumier
vs.
96%
6 lots for
₴43,9 mln
5 lots for of all MoH funding for anti-HIV/ AIDS drugs in 2013 was received by Bahriy ’s Group
Anti-TB drugs
₴80 mln
Anti-hepatitis drugs (for children)
Ukrpostach
Pharmadis
Pharmadis
Pharmadis
vs.
of all money allocated for hepatitis in adults in 2014 was received by Bahriy ’s Group
Ukrpostach
1 lot for
₴15,6 mln
lots in 2014
11 lots for
Sky Pharm
Pharmadis 2 lots for
₴10,9 mln 13
₴5,4 mln
91% of all money allocated for hepatitis in children in 2014 was received by Bahriy ’s Group
Old schemes
€ $₴ £
Scheme No 2 Registry of "Exorbitant" Wholesale Factory Prices The aim of the Registry of Wholesale Factory Prices is to set maximum prices for pharmaceuticals that the companies cannot exceed in their public procurement sales.
However, an imperfect system of pharmaceutical cost declaration allows the holders of pharmaceutical registration certificates to knowingly overstate the Registry prices. In essence, participating registration certificate holders collude with the MoH to declare overstated prices. Furthermore, according to the AntAC experts, they quote those overstated prices in the bids and split the difference. In fact, the Registry has become a legal tool to cover up corruption and overestimated pricing in the market of pharmaceuticals procured by the MoH and other state agencies. What is the rationale for the Registry pricing?
A pharmaceuticals producer or its representative in Ukraine receives a registration certificate for the medicines from the State Pharmaceuticals Service of Ukraine subordinated to the MoH. Furthermore, the certificate holder sends a statement to the MoH declaring the wholesale factory price according to the established formula. Different formulas apply to drugs produced locally and overseas.
Price Registration for Local Drugs
Pricing methodology for Registry purposes is rather biased for the pharmaceuticals produced in Ukraine. Along with the certificate, a registration certificate holder company must submit to the MoH the pharmaceutical’s price that the
company sets for all wholesale deals with all its suppliers. The MoH does not request any documents to corroborate the wholesale price, and the State Inspectorate does not check it despite its authority to do so. So in reality the producer can set any price that is not vetted by any state institution.
14
â‚Ź $â‚´
Price Registration for Imported Drugs
The pricing formula for imported drugs is based on the customs value of the drug stated in its customs declaration issued to a company at the time of the drug’s entry to the territory of Ukraine. The importers are under no obligation to provide the actual customs declaration copy to the MoH. Customs declarations are confidential, with access available only to the Ministry of Revenues and Duties of Ukraine. The report of the Ukrainian Interim Parliamentary Commission discloses that offshore companies are often used to increase drug customs prices. Ukrainian intermediary companies conduct fictitious business transactions overseas with several foreign offshore companies. Moreover, drug transfer only occurs on paper, and the drugs are actually delivered from the producer straight to Ukraine; however, their price is several times higher at that point. Considering the preferential taxation regime, by overstating the customs price of the pharmaceuticals and medical products the importers can use those grey methods to siphon the money out of Ukraine and artificially minimize their tax liabilities. Profits settle in the pockets of beneficiary (actual) owners of intermediary and offshore companies.
offshore Company X Cyprus
de jure
offshore
offshore
Company Z Panama
Company Y Virgin Islands
Ukraine
de facto
Pharmaceutical factory
15
By selling pharmaceuticals fictitiously on paper only to their own intermediaries, the companies de jure receive no superprofits on pharmaceutical resales, so they pay negligible taxes. However, de facto they sell the pharmaceuticals at the prices dozens of times higher and earn superprofits that further end up in the pockets of the officials from the MoH and other controlling authorities who ask no questions about the huge difference between factory release prices and their selling price in Ukraine.
Old schemes
Scheme No 3 Bidding with Identical Pharmaceuticals Normally pharmaceuticals with the same active substance are presented under different brands in Ukraine and in the world. For example, the active substance pancreatin is present in Ukraine under more than 12 brands: Creon, Kreazym, Pancreatin, Fermentium, Festal and many others. Each of these brands may come in 4-5 various dosages. Nevertheless, the intermediary companies usually collude with producers and enter tenders with the same brand and one dosage. In reality, neither distribution companies nor even brands compete with each other because of backroom dealings with producers.
Oncology: Ukroptpostach Company and Liudmyla Pharm LLC submitted bids for procurement of the oncology drugs Methotrexate and Cisplatin with the same brand names produced by EBEWE Pharma Ges.m.b.H. Nfg.KG, Austria, despite availability of other brands registered in Ukraine. Both bidders received producer’s letters of guarantee about the delivery possibilities. There were no other competitors in the bidding.
Tuberculosis: Local producers Kyivmedpreparat PJSC, Zdorovia Pharmaceutical Company LLC, Yuria-Pharm LLC and Research and Production Center Borschahivskyi Chemical Pharmaceutical Factory PJSC won the bidding for anti-TB drugs Kanamycin 100 mg vials, Levofloxacin tablets, capsules, pills, 250 mg, Isoniazid bottles, vials, (syrup), 4,000 mg, Rifampicin tablets, capsules, pills, 150 mg. They competed against intermediaries that submitted bids for the same pharmaceuticals.
Hepatitis: An example of price reduction due to competition can be procurement of pegylated interferons for hepatitis treatment, when bids of a new company with a new drug reduced the prices of one vial by UAH 346, from UAH 1,646 to UAH 1,300 despite the US dollar rate growth. 16
Scheme No 4: Fighting against Competition, or Preventing Competing Products with the Same Substance from Entering the Market A number of pharmaceuticals are registered by the same brand in Ukraine. As a rule, the greatest share of state funding goes to procure those drugs.
15 mln on one drug.
Whose Interests Does the State Protect? Every year the state procures antiretroviral drugs with the active substances lopinavir / ritonavir (200 mg\50 mg) from the Aluvia brand produced by Abbvie Inc. At the same time, in 2012 Ukraine registered cheaper analogue drugs, LOPICIP produced by Cipla Ltd., India, and EMLETRA produced by Emcure Pharmaceuticals Ltd., India. However, the court decisions canceled registration for those drugs because of a possible violation of Aluvia’s patent rights. Meanwhile, the application declared the wholesale factory price for LOPICIP, by Cipla Ltd., at UAH 3.58, while Aluvia’s price amounted to UAH 4.12 to 4.10 in 2011–2013. Therefore, the state loses at least UAH 15 million annually on one drug alone because of patent rights protection.
17
new schemes Scheme No 1: Late Procurement In 2013, procurement in six programs started in February and was successfully completed by contract signing in April-May and deliveries in June.
In 2014, the procurement only started in July, and most contracts were signed only in November-December. We have to point out that there were no objective reasons for delaying public procurement in 2014 (except in February). The MoH had all documents ready back in January-February to begin procurement, but the first announcements were only published in July. The key reasons for procurement delays in 2014 were:
Drug AVELOX®, solution for infusions 400 mg/250 ml, produced by Bayer Pharma AG for TB and cancer treatment. Redeclared from UAH 573.73 to UAH 1,150.
Sabotage by bureaucrats, who failed to publish bidding announcements on the MoH website. This was followed by clamorous political scandals at the MoH, when the Minister of Health Oleh Musiy blamed his first deputy, Ruslan Salutin, of sabotaging the announcement of the procurement process. He publicly said that his deputy was a henchman of Mykola Martynenko, one of the key members of Parliament in the pro-government party of the Ukrainian Prime Minister. Delaying the procurement announcement by four months Re-registration in the Wholesale Factory Pharmaceutical Prices Registry from April till July while bidding was delayed gave a chance to all pharmaceutical companies to register much higher registry prices. The State Wholesale Factory Prices Registry is an official registry with prices for pharmaceuticals that sets the maximum selling price for public procurement in Ukraine. Bidding price cannot exceed 10% of the pharmaceutical’s price declared in the Registry.
CANCIDAS ® powder 50 mg, produced by Merck Sharp and Dohme BV, Netherlands Redeclared from UAH 4,463.74 to UAH 6,320.41.
CISPLATIN "EBEWE", concentrate for infusions, 50 ml (25 mg) per bottle, produced by Ebewe Pharma Ges. m.b.H Nfg. KG, Austria. Redeclared from UAH 79.93 to UAH 146.02.
18
Scheme No 2: Mass appeals / Procurement Blockage by Pharmaceutical Companies via the Antimonopoly Committee There were hardly any appeals of biddings at the point of announcement in 2013, while in July-October 2014 procurement was blocked by appeals for 50 to 110 lots (pharmaceuticals) in different months11. The only objective for those mass appeals was a deliberate delay of procurement because in most cases the Antimonopoly Committee did not recognize those appeals as justified and rejected the complaints (only 5 out of 33 complaints were satisfied). Besides, some appeals were filed by companies that had no pharmaceutical trade licenses or intention to participate in the biddings. Procurement was also appealed by companies that had participated in the bidding regularly over the past few years but found certain conditions of documentation "discriminating" only this year, although they had participated in the biddings of 2013 under very similar conditions. Moreover, MoH officials often simply ignored sessions of the AMCU Collegium dedicated to complaints review and delayed provision of necessary documents.
Liudmyla Pharm Company that won 25% of bids last year blocked the bidding this year because of allegedly discriminating tender conditions that did not change since last year.
UAH 200 mln The amount of bids for cancer drugs for adults blocked by two companies, Kalyna Torh and Ros-2 that are not related to the pharmaceutical industry in any way, and one of them sells leather goods.
The current Law of Ukraine On Public Procurement in art. 18 identifies two types of bidding appeal procedures: appeal of tender conditions at the time of its
11
announcement until the moment of the bids opening, and appeal of procurement results after the winner has been established and until the contract is signed. Both types of appeal may suspend the bidding. At the time of announcement, the participants usually appeal discriminating conditions.
19
new schemes Scheme No 3: Tender Cancellation
Many more biddings and lots were cancelled in 2014 compared with 2013. The key reasons were:
lack of bidders,
documents submitted by bidders did not meet requirements, submitted bids exceeded expected value. According to the law, when submitted bids exceed expected value, only the customer makes the ultimate procurement decision. The client may either cancel the bid or go through with it. As a result of artificial bidding delays, medical institutions ran out of stocks of pharmaceuticals. In addition, the difficult economic situation led to hryvnia depreciation and a continuous growth of prices for imported drugs, and sometimes for local ones as well. This resulted in numerous protests of public activists and patients and the ousting of the Minister of Health and his deputy from office. Following the Anti-corruption Action Center’s initiative, the law-enforcement authorities launched criminal proceedings into the crime of omission committed by the Ministry’s officials.
20
Scheme No 4: Change of Procurement Conditions
180 100%
therefore would have to be returned to the national budget. Should that happen, next year the funding for certain programs may be cut down by the unused amount, as the budget is normally formed keeping in mind the previous year’s spending. That lobby initiated drafting amendments to the resolution of the Cabinet of Ministers of Ukraine to increase the terms of 100% upfront payment for pharmaceuticals and medical products to 6 months.
days of extension of delivery time
So in fact the suppliers who received a 100% upfront payment have to supply the medicines within 180 days after the contract is signed. Considering that most tenders took place in late November-December, and contracts were signed in December, most drugs that should have been delivered to hospitals back in August-September will only arrive in June of next year, in 2015. This caused a huge gap in supplies of pharmaceutical to patients for more than six months.
upfront payment
One of the key reasons for bidding delays was the lobbying of pharmaceutical companies and suppliers. As of the beginning of October, when most drugs should have been stocked at the hospitals, less than 20% of trading was completed. This concerns the announced bids only, and the percentage of signed contracts was even lower. At that time a powerful lobby at the Cabinet of Ministers started a blackmailing campaign regarding the drug shortages and the risks that the funds may remain unused and 21
We should mention that this is a very dangerous norm for Ukraine, as some winners of biddings for antiretrovirals supplies in 2013, Alba Ukraine PJSC and Sky Pharm LLC still have not delivered medicines for more than UAH 1,393,457.50 to the MoH. Moreover, Alba Ukraine PJSC launched bankruptcy proceedings, and the MoH failed to organize claims to recover fines and losses properly. Right after the government adopted the abovementioned resolution, the pharmaceutical companies stopped appealing the biddings, the number of bidding cancellations went down, and the new stage of bidding announcements started, enabling the MoH to finally buy medicines and use most of the funding.
Other Systemic Shortcomings "Exclusive" Sales, or How the International Companies Work via Intermediaries Besides the spheres of influence, the winners "split" pharmaceuticals production, too. For instance, in all biddings Liudmyla Pharm LLC exclusively represented the products of the following brands:
s Astella a Pharm s and ia m u r e S d Bharat s Limited, In e Vaccin care h t l a e GE H indan S / d n a T, Icel A p u o a s Gr Actavi srl, Romani MA, R a A m H r a P Ph IPSEN France Orion ation, r Ltd, a Corpo m r a d do Ph n i b Finlan o r Au p India inthro e W fi o San rie, Franc Indust
C L L m r a h P a l y m Liud 22
Bahriy Group represented exclusively the products of the following brands:
PJSC, h o l o Tekhn e Ukrain
mbh, G c a d Me ny Ltd, Germa e h c o R ann-La m ff o Ltd, F. H a l p i d C n a rl Switze India
Other winners with "exclusive" rights Vektor Pharma LLC Ranbaxy Laboratories Limited, India
ds ited, Macleo ceuticals Lim a Pharm India s. ma Ge ria r a h P Ebewe fg. KG, Aust N m.b.H G, Cilag A and rl Switze in AG, e t S a tria, arm s h u P A s , i t GmbH Novar rland z o d n a S Switze ny Germa
" p u o r G "Bahriy
23
Link Medital LLC, Germany This distribution of brand representation may be the evidence of agreements between bidding winners with the key international pharmaceutical producers. The agreements may cover exclusive rights to represent international producers at the biddings in the MoH and other public institutions. International operators prefer to work via distribution companies as in that case they take no risks related to sales of pharmaceuticals to the Ukrainian state. They do not have to resolve the matters of bribery, kickbacks, or risk overdue payments, untimely deliveries, etc. Only two companies, Janssen and Glaxo, bid themselves without bogus intermediary companies.
Proportion of Local and Foreign-made Pharmaceutical Production
6%
In cash terms, local drugs were procured only for UAH 65,406,689.7 out of UAH 1,101,402,691.1 65 406 689,57 1,101,402,691.1
of all pharmaceuticals procured with the state budget funds
4,8% child oncology 9,54% adult oncolog 1,07% HIV/AIDS 28% child hepatitis 66% adult hepatitis Prevalence of overseas drugs Ukraine is fully dependent on imported medicines. Locally produced drugs only constituted 6% of all the procured medicines. Medical products are the second most imported category after imports of gas to Ukraine. This threatens the national security of Ukraine, because the country and its patients are almost completely dependent on the foreign exchange rate and supplies. Resolving the matter of absence of Ukrainian drugs against lethal diseases, such as AIDS, TB, hepatitis, should become a priority of the national policy. As of now, local producers cover almost 70% of the mass demand market, but only 6% of the public procurement market for the treatment of lethal diseases.
24
Wrong MoH Statistics: Miscalculations and Misreporting At the same time the MoH reported that the drugs against those diseases had been provided fully. The documents analyzed by the Anti-corruption Action Center proved that the ministry’s reports were based on the data of spendings by the hospitals, rather than the number of patients whose treatment was covered by the state. This happens because the MoH statistical information about drugs availability at the facilities does not correspond with reality. Their reporting is based on the accounting data that reflects generalized spending within a program and does not provide information about the absence or availability of specific drugs or treatment regimens. That paints a wrong picture of drug supplies in the regions. But most importantly, medical institutions did not inform the patients about drugs availability. In some cases they simply transferred the patients to new, often ineffective treatment regimens.
25
Disproportion of Funding Distribution for Certain Medicines drugs for cancer Oncology In 2014, the state spent UAH 367,617,623.31 to procure 66 medicines for children with cancer.
5 of 66 drugs for child cancer
cost 232 473 730,95, or 63 % of the total spending: 1. ОСТАСАМ® 10% 2. NEULASТІМ® 3. CANCIDAS® 4. NOXAFIL® 5. MYCAMINE
5 30 of
in adults constituted 40% of all procurement.
The spending for 30 adult oncology drugs in 2014 amounted to UAH 173,755,796.84, including 69,032,021.84, or 40% spent on five drugs:
6. DOCETACTIN 7. CISPLATIN "EBEWE" 8. DIFERELIN® 9. ENDOXAN® 500 mg 10. ENDOXAN® 200 mg The spending for 27 adult oncohematology drugs in 2014 amounted to UAH 43,439,719.16, including 18,858,472.82, or 43% spent on drug Rituxim. Two drugs, TASIGNA (similarly registered by one trademark) and Glivec for treatment of chronic myeloid leucosis were procured for the total amount of UAH 59,861,813.40. Prices in child oncology grew on average by 52%, and in adult oncology by 32% in 2014 compared with 2013. 26
Eight cancer drugs were overpaid by UAH
Oncology Comparison of pharmaceutical prices in Ukraine and in the neighbor countries At the same time, experts of the Anti-corruption Action Center compared prices for cancer drugs, for which the biggest amounts of budget funds were spent, with the prices for the same drugs in the neighbor countries (prices were compared in the hryvnias according to the currency exchange rate at the day of procurement with a 7% VAT added according to the Ukrainian legislation). According to the calculations of the Center, the average difference of procurement prices constituted UAH 62,277,352.12.
Pharmaceutical, brand
Single trademark registered in Ukraine
CANCIDAS®,50 mg, Merck Sharpe and Dohme
Single trademark registered in Ukraine
Single trademark registered in Ukraine
Single trademark registered in Ukraine
Ukrainian MoH procurement price
Maximum price in Russia, UAH
62 mln
Declared price in Bulgaria
Producer’s price in Moldova
Determined price in Slovakia
Maximum price in the Czech Republic
6132
5686,68
MYCAMINE, 100 mg, Astellas Pharma Europe
11755,5
7309,17
7661,2
5372,9
MYCAMINE, 50 mg, Astellas Pharma Europe
5948,1
4582,17
5107,54
5141,35
OCTAGAM 10% / OCTAGAM® 10%, OCTAPHARMA
5360
NOXAFIL® 105 ml, Schering-Plough
11320
CISPLATIN "EBEWE", 50 mg, Ebewe Pharma Ges. m.b.H Nfg. KG, Austria
278
197,52
114,28
TASIGNA, 200 mg, Norvatis Pharma
738,3
448,76
560,47
Glivec®, Norvatis Pharma
1337,5
1092,74
5968,52
3598,84
27
Official sales price in Poland
3588,46
3492,16
3334,55
9638,13
9427,24
10605,84
127,33
157,83
513,69 1097,18
1147,83
1151,75
Drugs Procured in 2014 HIV Infection / AIDS
Anti-TB Drugs
Pharmaceuticals for treatment and prevention of HIV infection / AIDS were procured for UAH 214,043,573.97 in 2014, including UAH 95,989,537.20 spent on only one drug, ALUVIA, that currently has no alternatives in Ukraine.
Anti-tuberculosis drugs were procured for UAH 152,896,031.35 in 2014. Compared with 2013, the prices grew by 40% on average, and most funding was spent on second line drugs: UAH 31,573,918.45 on Capreomycin (under two trademarks Capoci and Capreomycin), UAH 19,027,879 on Avelox and UAH 37,945,754.00 on Cycloserine (with two trademarks, Helpocerin and Cyclorin procured).
95 989 537,20
Capreomycin
31 573 918, 45 Avelox
ALUVIA
19 027 879 Cycloserine
Notably, compared with other procurement areas, prices for antiretrovirals grew least in 2014, by 25% on average
37 945 754, 00 28
Hepatitis Sole suppliers of those drugs since 2011 are Bahrii Group’s companies that set prices for those medicines. As of today, pharmaceuticals from two brands, Merck and Hoffmann-La Roche, are registered in Ukraine for hepatitis treatment, and
→
Merck
their procurement is covered from the state budget. Bahrii Group’s companies exclusively represent both of them.
Hoffman-La Roche
→
The MoH procures anti-hepatitis drugs (PEGinterferons) since 2011 for children and since 2013 for adults.
"Bahrii’s Group" Prices for PEG-interferons 2400
After the state adult anti-hepatitis program was approved in 2013, the MoH procurement price went down by more than 50%. This is further evidence of ‘manual’ control of pricing by distributors and producers, rather than healthy competition at the pharmaceutical market.
2358 1800 1299 1200 928,77 600
We make no conclusions regarding medical appropriateness of this particular distribution of budget money for procurement, but we believe that the facts of significant spending on the most "exclusive" drugs is suspicious, especially if we take into account their considerable overpricing compared with other countries.
0 2012
2013
2014
29
The Greatest Corruption Opportunities Present Themselves at the Stage of Drug Needs Assessment TB
Adult oncology
18→21 66→36 2013
2014
2013
2014
For instance, the procured list on anti-TB drugs included 18 names in 2013, and in 2014 — already 21 names
The nomenclature of anti-cancer drugs for adults listed 66 medicines in 2013 and 36 in 2014.
Every year the nomenclature review commission decides on a list of pharmaceuticals procured from the state budget. Because no unified methodology or approach is applied to form the list of drugs (nomenclature) to be procured, the amounts and names of those drugs change dramatically every year without any reason.
The commission uses several documents at the same time to form that list: the State Record of Medicines, as well as the List approved by Government’s resolution on May 5, 1996 No 1071 On the Procedure of Pharmaceuticals Procurement by Budget-Funded Healthcare Institutions and Establishments (amended), that creates risks and opportunities for inclusion of drugs preferred by suppliers rather than patients.
30
Adult oncohematology
Child oncology
44→35 96→63 2013
2014
2013
The nomenclature of adult oncohematology listed 66 names in 2013 and 35 in 2014.
Quantitative drug needs assessments are made on the basis of methodologies approved by the MoH or without them. For example, when procurement for anti-hepatitis drugs was announced, the MoH did not have information about the necessary quantities of pegilated interferons of different dosage. As a result, the procurement announcement included five different dosages without the breakdown of required quantities by dosage. The Antimonopoly Committee ruled that this bidding condition was discriminatory and instructed to amend the bidding documents.
2014
The nomenclature of children’s oncology is changing several times a year: 12 drugs were added in 2013, and 33 drugs were removed in 2014.
Besides, in September-October this year most regions did not have second line medicines, and instead had six-month stocks of first line drugs, which once again demonstrates the weakness of the needs planning system.
31
Pitfalls in the Ministry’s Tender Procedures in Detail Tender procedures followed by most ordering parties. The Ministry’s tender procedure is a very complicated and long process. Moreover, the agency has made the procedure established by the law even more complicated by adding internal documents, more stages and parties to the process with the view to:
Avoid responsibility for decision-making.
Create additional corruption mechanisms during tenders.
In fact, such a system of procurements drops the Ministry’s Tender Committee from decision-making and gives no chances to hold officials liable.
Tender procedures followed by most customers
TENDER COMMITTEE
→
organizes the tender process and makes decisions at every stage (usually, it has 5 to 15 members)
32
Concluding a contract
→
→
Deciding on the winner
→
→
Examining and evaluating bids
→
→
Submitting bids and opening envelopes
→
→
Determining the scope and announcing procurements
Tender Procedures Followed by the Ministry of Health Care of Ukraine
→
Examines other documents of bidders
→
Concluding the contract
Decides on the winner following examination of documents
Ministry’s tender committee (12 officials)
Determines the scope of procurement
Members of the special groups and the Tender Committee are very often specialists from the same units in the Ministry
Accepts bids and opens envelopes
→
Deciding on the winner
Special task group to develop inputs (11-14 members)
Regional institutions accountable to the Ministry
→
→ →
Drafts an announcement based on the scope of procurement
→
Examining and evaluating bids
→
→
Submitting bids and opening envelopes
→
Determining the scope and announcing procurements
Provides an opinion on compliance of drugs offered by bidders with requirements
Special task group of experts in the area (11-14 members)
Units in the administrative office of the Ministry
33
Public companies specially designated by the Ministry
Every year the Minister signs an order to authorize three companies accountable to the Ministry to conclude and administer contracts (Politekhmed, Ukrmedpostach and Ukrvaktsyna)
The Ministry’s tender Committee and officials are suspended from concluding and administering contracts
Ministry's Discriminatory Conditions The Ministry's documents fail very often to indicate how bidders can confirm with documents their compliance with tender terms and conditions. This enables it to make a biased decision to reject a bidder. The Ministry requires that bidders should provide information about their solvency. Nevertheless, some bidders who were involved in procurements and won most tenders fail to provide information about their financial losses. The Ministry used to combine drugs with different unit strength into one lot. As a result, only companies able to offer the whole scope of procurement could be bidders. This approach narrows the list of potential bidders and inflates prices for drugs. In particular, the Ministry announced tenders to buy hepatitis medications and combined all unit strengths in one lot during two consecutive years. In a contract for procurement, the Ministry includes some material terms and conditions which are in conflict with Ukraine's applicable laws and infringe rights of bidders. For example, such contract requires that a supplier should indemnify an ordering party for expenses related to delivery of drugs to end customers (medical institutions) and other expenses related to performance of the contract by the ordering party.
34
Liudmyla Pharm and Medpharmkomtsentr submitted documents about losses; though it was not a ground for the Ministry to reject their bids – despite its own requirements. Ministry's shell companies or how to make money out of thin air
Ukrvaktsyna Politekhmed Ukrmedpostach
Since 2011, the Ministry has annually issued an order to authorize three public companies directly accountable to the Ministry to support and administer procurements. After tenders these very companies make contracts on behalf of the Ministry, ensure performance of these contracts, accept drugs at their storage facilities and arrange delivery of medications to medical institutions. Moreover, these companies make additional agreements with tender winners to oblige suppliers to indemnify them for expenses of drugs’ delivery to medical institutions, such indemnification being 1.5% to 2.12% of the products' price. Bidders include this percentage in the price of drugs in advance.
Total public expenses for such purposes under contracts analyzed by the Anticorruption Action Center (AAC) make over UAH
23Â 201Â 801,33
This condition is binding on winners and is blatantly discriminatory. However, leaders of the Ministry's tenders do not object to it.
Private Companies Who Win Tenders Take the Ministry's Premises on lease. The National Financial Inspectorate has established that regular tender winners take storage facilities on lease from the Ministry's companies (Pharmadis rents such premises from Ukrvaktsyna). Such situation demonstrates long-standing agreements between the Ministry and key market players.
35
Procurements 2013 and Procurements 2014 To understand procurement practices in 2014, we have analyzed the same in 2013. When tenders are announced, the scope of procurement is divided into parts called lots. Every drug makes an individual lot. Every day the Ministry may announce 10 procurements for 100 lots. Bidders may file bids for every lot individually. The AntAC has analyzed 6 programs: 240 lots in 2013 and 210 lots in 2014.
300 300 225 225 150 150 75
75
0
0 January
March
May
July
September
2013 36
November
January
Ma
November
USD Exchange Rate 2014 tenders announced (q-ty of lots) tenders cancelled (lots) tenders ended in contracts (lots) tenders blocked through appeals (lots)
16 9,9
12
11,6
11,7
May
July
13
14,6
15,6
7,99 8 4 0 January
March
September
November
December
300 225 150 75 0 January
March
May
July
2014 37
September
November
Bidding Winners Analyzing tender results, it is better to isolate drugs and medical products. Out of UAH 1,211,036,252.11, drugs made UAH 1,101,402,691.1 and products made UAH 109,633,560.98. Therefore, UAH 1,101,402,691.1 allocated for drugs procurements were divided among pharmaceutical companies as follows.
Winners in 2014
Winners HIV/AIDS
Winners TB
43% Bagriy's Group 37% Liudmyla Pharm 9% Vektor 4% Apopharm 2% Link 2% Glaxo 3% Others
In most tenders, contracts were awarded to two big players who have won the Ministry's tenders for the past four years: Liudmyla Pharm and companies of the so called Bagriy's Group, including Pharmadis, Ukroptpostach, Lumier Pharma and Hanza.
55% Liudmyla Pharm
53% Bagriy's Group
24% Vektor
26% Vektor
12% Bagriy's Group
13% Liudmyla Pharm
9% Glaxo
3% Kyivmedpreparat 2% Diatom
The Center's analysis in every field of the tenders shows that both groups of companies are in collusion and distribute spheres of influence between each other even before tenders are announced.
2% Yuriya Pharm 1% Glaxo 0.1% Borshchahivsky Chemicals and Pharmaceuticals Plant
38
C le hro uk n em ic ia my el oi d
O in nc ad oh ul em ts a to lo gy
in
ad ul ts
in O nc ol og y
O on nc co olo he gy m an at d ol og y
Hepatitis in Adults Winners and Children Oncology
ch ild re n
In total, UAH 988,350,295.68 (95%) were divided among only six companies, of which four belong to Bagriy's Group (the same who won tenders last year, except Vektor. Nevertheless, it won tenders in other ICD diseases last year).
11,73%
24,77% 58,86% 72,32%
61,39% 23,93% 10,75% 44% Bagriy's Group 42% Liudmyla Pharm 7% Apopharm 3% Link Medital
Bagriy's Group
Apopharm
Liudmyla Pharm
Vektor
Pharmex Group
Biopharma
Norton Ukraine
2% Biopharma
Link Medital Bagriy's Group Liudmyla Pharm Biopharma
39
100%
6 95
Tender Results
companies divided
4 of 6 40
companies are controlled by one individual — Petro Bahriy
5% of drug procurements for HIV/AIDS, TB, hepatitis and oncology sufferers 41
The above corruption schemes and systemwide shortcomings resulted in a total failure of six programs and deficit of drugs nearly in all Ukrainian regions Oncology in children Hepatitis and adults Chernihiv
Chernihiv
Lutsk
Lutsk
Rivne
Rivne
Sumy Zhytomyr
Sumy
Kyiv
Zhytomyr Kharkiv
Lviv
Khmelnytsky
Poltava
Ternopil Khmelnytsky
Cherkasy
Vinnytsia Uzhhorod
Kharkiv
Lviv
Poltava
Ternopil
Kyiv
Cherkasy
Vinnytsia
Luhansk
IvanoFrankivsk
Uzhhorod
Luhansk
IvanoFrankivsk
Dnipropetrovsk
Dnipropetrovsk
Kirovohrad
Chernivtsi
Kirovohrad
Chernivtsi Donetsk
Mykolaiv
Odessa
Donetsk
Zaporizhzhia
Mykolaiv
Odessa
Kherson
Simferopol
Zaporizhzhia
Kherson
Simferopol
According to the AAC, stocks of hepatitis drugs were exhausted in Ternopil, Zaporizhzhia, Khmelnytsky, and Mykolaiv oblasts in October 2014. No drugs could be found in Odessa, Luhansk, Donetsk oblasts and the Crimea.
In October, no drugs were available for cancer-affected adults and children in Vinnytsia, Volyn, Rivne, Mykolaiv, Kharkiv, Luhansk, Donetsk oblasts, Kyiv city and the Crimea.
A tender for hepatitis medications took place on December 31, 2014. Patients who waited for treatment in 2014 did not receive the vital therapy.
42
Tuberculosis
HIV/AIDS
Treatment interruption 14,400 patients with multidrugresistant TB
Chernihiv Lutsk
Chernihiv Lutsk
Rivne
Rivne
Sumy Zhytomyr
Sumy Zhytomyr
Kyiv Kharkiv
Lviv
Khmelnytsky
Poltava
Ternopil Khmelnytsky
Cherkasy
Vinnytsia Uzhhorod
Kharkiv
Lviv
Poltava
Ternopil
Kyiv
Cherkasy
Vinnytsia
Luhansk
IvanoFrankivsk
Uzhhorod
Luhansk
IvanoFrankivsk
Dnipropetrovsk
Dnipropetrovsk
Kirovohrad
Chernivtsi
Kirovohrad
Chernivtsi Donetsk
The deficit of drugs was addressed with the help of money from international organizations.
Mykolaiv
Odessa
Donetsk
ART drugs unavailable
Zaporizhzhia
Test systems unavailable
Kherson
Odessa
The AntAC has found that between August and October 2014 most Ukrainian regions lacked second-line TB drugs used for treatment of MDR TB and XDR TB.
Zaporizhzhia
Kherson
Funding from the Global Fund
Simferopol
As a result, patients had no treatment for three months (see letters from regional health care departments). In late 2014 and early 2015, the critical need in such medications was met with the help of additional procurement financed by the Global
Mykolaiv
Simferopol
The AntAC has found that at least 12 Ukrainian regions lacked particular antiretroviral drugs and HIV/AIDS test systems to measure viral load, test newborns and pregnant women and make enzyme-linked immunoassay in late 2014.
Fund to Fight AIDS, Tuberculosis and Malaria in Ukraine (it provided $460,000) and drugs bought using funds of a Global Fund's grant.
Such a situation may have a dire impact on patients as treatment interruption causes quick virus mutation, a rise in prices for treatment, the death of patients or an increase in their number as timely HIV/AIDS tests are unavailable. Funding from the Global Fund was also used to buy necessary drugs.
Therefore, over 14,400 people with MDR TB received treatment.
Letter from the Center for Control of Socially Dangerous Diseases:
2
https://drive.google.com/drive/folders/0B75fbG3r_2TwfnlWLXhpQmlNRWc3WWV3ZU5NeDB0MFVIY051 ZS1raXpPTzBtdzlkUi03U1U
43
Seven Simple Steps to Combat cCorruption in Public Procurement in Ukraine
1. 2.
Ensure that drugs are bought through international organizations – partly done today. The Verkhovna Rada adopted a law enabling the use of this mechanism, yet it is still unclear what areas of procurement it will cover. The temporary use of the mechanism will guarantee the high quality of drugs and prevent delay in delivery.
Improve domestic procurement procedures and remove irrelevant stages and parties involved in organization of tenders. Procurements through international organizations can be a good alternative while domestic procedures are improved. In particular, An institution may be set up independently from the Ministry to ensure proper procurements. This institution will have no chance to influence tenders "manually". Clear and transparent criteria are to be in place to develop a range of drugs to narrow the list of drugs to be bought with public funds according to the best practices and WHO recommendations. Ensure electronic collection of needs and registration of patients to avoid any subjective factors.
3.
Conduct regular effective audits of all procurements and remove discriminatory conditions. Create an advanced system to manage drug stocks and control their use. The broader public and patients should control the supply and use of drugs by accessing a dedicated electronic drug control system which shows real-time information about quantity of drugs and medical products available in healthcare institutions.
44
4. 5. 6. 7.
Negotiate with key market players, primarily, with foreign and domestic drug manufacturers to prevent unnecessary influence on prices and tender results. Ensure deregulation in parallel with negotiations by removing registration of prices, simplifying registration of drugs and medical products in a move to boost competition. Not allow companies designated by the Ministry (Politekhmed, Ukrvaktsyna and Ukrmedpostach) to participate in procurements. First, conduct an independent audit to see whether prices for the companies' logistical services are justified and hold an open tender for such services, authorize a tender committee to conclude and administer procurement contracts. Hold open competition for key positions in the Ministry (departments) and its subordinate institutions (National Drugs Services, National Expert Center and subordinate companies) to prevent any "manual" influence on the quality control, production, state registration, licensing and sales of drugs and medical products, results of examination of registration materials, clinical trials and state registration of medical products).
45
This product is published within the framework of the project "Through transparent and effective public procurements to save lives of seriously ill Ukrainians — Stage 2" with the financial support of Ukrainian Network of PLWH as part of the project "Building a sustainable system of comprehensive services on HIV/AIDS prevention, treatment, care and support for MARPs and PLWH" funded by the Global Fund to Fight AIDS, Tuberculosis and Malaria. It is also a part of the project "Through transparent and effective procurements to saving Ukrainians with cancer" supported by the International Renaissance Foundation. Opinions contained herein are opinions of the organization that published this product or opinions of the Global Fund to Fight AIDS, Tuberculosis and Malaria, Ukrainian Network of PLWH, and International Renaissance Foundation. The Global Fund to Fight AIDS, Tuberculosis and Malaria and International Renaissance Foundation were not involved in approving the published product or opinions that may arise from it. Any part of this product may not be reproduced or used in any format, including graphical, electronic, photocopying or other means, without giving a reference to the original. The book is published in Ukrainian and English in print and electronic format. Online version of the document is available at the Center’s website antac.org.ua. Printed copies are distributed free of charge. The Anti-corruption Action Center allows distribution of the text if the source is cited.
46
Legal and Information Framework In its report Ukraine’s Diagnosis is Total Corruption: Who Benefitted from Sabotaging Procurement of Pharmaceuticals in 2014, the Anti-corruption Action Center discloses information it collected during its day-to-day operations, exercising its constitutional right to freedom of speech and expression. The AntAC uses information, which is only in the public domain, has already been published or may be accessible and distributed to any number of people. Therefore, this information is not restricted. Opinions and conclusions of the Center in the Report in regard to decisions, actions or omission thereof by officials or businesses are not statements of violation of current laws. Such opinions and conclusions are judgment-based and are not subject to challenging. Moreover, the AntAC makes no conclusions about proven offences and responsibility for them. At the same time, the Center leaves open the possibility for public institutions and businesses mentioned in the Report to provide facts and evidence to rebut information and conclusions contained herein. 47
Andriy. Dx: Hemophilia
Arseniy. Dx: Cancer
Nona. Dx: Von Willebrand disease
Dima. Dx: HIV
Ira. Dx: Hepatitis