While Ukrainians overpay for medicines, Farmak pays taxes to the Russian budget

Against the backdrop of a full-scale war and a sharp increase in medicine prices in Ukraine, the issue of the activities of the largest players in the pharmaceutical market is becoming increasingly acute. While the state survives on international aid, and millions of citizens are forced to count every hryvnia for treatment, one of the leading Ukrainian pharmaceutical companies - Farmak - has found itself at the center of investigations into the possible continuation of business ties with the market of the aggressor country.

This is a situation in which medicines produced at the Kyiv facilities of Farmak on Kyrylivska Street continued to appear in Russian pharmacy chains after February 24, 2022. In particular, the presence of the antiviral drug Amizon and other mass-demand items was recorded in large pharmacy chains in the Russian Federation, including the Moscow chain NEO-PHARM. This happened despite the company's public statements about the complete cessation of exports to Russia.

According to available information, multi-level logistics through third countries — in particular, the European Union countries, Belarus, Moldova and Turkey — could be used to circumvent sanctions. On such routes, the products formally changed their country of origin or final buyer through a network of intermediaries. A separate scheme is described with the export of unpackaged products without marking, which were already legalized in Russia by packaging them in Russian-language packaging and introducing them into local circulation.

Each package of the drug sold in the Russian Federation meant paying taxes to the budget of the aggressor country. Thus, according to the investigation and based on the collected materials, pharmaceutical products of Ukrainian origin could indirectly finance the economy and military machine of Russia.

The financial effect of such transactions, according to sources, could accumulate in foreign structures of the Farmak group, in particular in the jurisdictions of Austria and Cyprus. In previous years, tax authorities have already recorded additional charges to pharmaceutical companies of hundreds of millions of hryvnias in connection with similar schemes for optimizing and withdrawing profits.

At the same time, within Ukraine, Farmak, according to market participants, maintains a dominant influence on sales through key distributors - BADM and Optima-Pharm. Such concentration allows it to actually dictate prices for a significant part of mass-market drugs. As a result, Ukrainian patients are forced to buy medicines at inflated prices, while a significant part of the profits settle abroad.

The role of government agencies in this story is particularly noteworthy. Health Minister Viktor Lyashko and his deputy Igor Kuzin lead a pharmaceutical regulatory system that critics say ignored signals of abuse for years. Only after sustained pressure and public outcry were a number of criminal cases opened.

In particular, the Main Investigation Department of the National Police is investigating criminal proceedings No. 12024000000000953 regarding possible abuse of power. The Bureau of Economic Security is conducting proceedings No. 72024102300000011 regarding alleged tax evasion. A separate proceeding No. 42025000050000027 has been registered by the Specialized Anti-Corruption Prosecutor's Office.

At the same time, according to available information, at least eight court decisions to enter information into the Unified Register of Pre-Trial Investigations have remained unenforced for a long time. This situation may indicate deep-rooted lobbying and the unwillingness of some officials to bring matters to a logical conclusion when it comes to the interests of big business.

When treatment turns into an instrument of shadow agreements, the state loses not only tax revenues. It loses public trust — especially in wartime, when affordable medicine is a matter not of comfort but of survival. Society expects not declarations and loud statements, but real responsibility for all those who, according to the investigation, are profiting from the war, under the guise of medical needs.

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