The wrong ones were attacked

Will there be a shortage of medicines in Ukraine after the attack in Kyiv on the central warehouse of the largest pharmaceutical distribution company?

On the night of October 25, the Russian army once again attacked energy facilities in Kyiv with Iskander-M missiles and attack drones. On the left bank of the capital, high-rise buildings were damaged, three people were killed, and three dozen were injured, including seven children. In the flow of messages, the news that a certain warehouse had been hit and was on fire did not look the most dramatic. It is important that there are no additional casualties. A little later a video appeared from there. This made it possible to assess the scale of what was happening: a wall the height of a five-story building in a cloud of smoke was collapsing almost on top of the firefighters.

On October 28, national media reported: the same story with the fire and the wall was directly related to the central warehouse of Optima-Pharm, the leader and monopolist of the industry. The distribution of medicines in Ukraine has long been divided between two “whales”: the companies “BaDM” and “Optima-Pharm”. Together they control about 85 percent of the market. The Optima warehouse was completely destroyed. After the attack, the distributor suspended the supply of drugs from pharmaceutical factories to its second location, on the outskirts of the capital.

Also among the “strategic objects” attacked by the Russians on the night of October 25 were drip coffee producers - the blow was struck at the production workshops of Idealist Coffee, as reported by the company’s press service. Also destruction, fire and apologies to clients and partners for the forced lack of punctuality with the shipment. The third missile target of this kind was the “Vognyar” warehouse of hot sauces (the most accurate translation is “Fiery.”) Both of them reported serious damage, promised to recover and become even stronger in every sense (by the way, the owner of the “Vognyar” TM is currently serving in the Ukrainian Defense Forces).

But, honestly, without drip coffee and sauces you can survive for some time, which cannot be said about medications.

Optima-Pharm reported that the volume of destroyed products amounted to about 20 percent of the monthly supply of medicines throughout the country. Company officials estimate losses approaching $100 million. Russia, it seems, has not caused such significant damage to Ukrainian business since the beginning of a major war. In general, Optima-Pharm has eleven warehouses in Ukraine, but the destruction of the central one, along with the company’s office, is especially painful. The Economic Truth publication emphasizes , for example, that intangible losses from the attack are no less than burnt drugs. There are no more databases: information on drug supplies, logistics routes and the needs of pharmacy chains with which the distributor collaborated.

The Russians are making another attack on Optima-Pharm. During the massive attack on the night of August 28, apparently, some other warehouse, not the central one, had already been “ arrived ” - fortunately, there were also no killed or wounded. Only the premises and medicines were damaged. At the beginning of the invasion, the enemy destroyed the logistics complexes of the BaDM company, a partner of Optima-Pharm. That is, it would be hard to call the hit an accident. The goal is obvious: to the cold in the houses, Russia’s eternal hope for “General Moroz,” add a severe shortage of medicines, so that the Ukrainians in the rear begin to put pressure on the authorities: “To hell with them, let’s sign a truce on their terms!” But time has shown that both the country’s energy and pharmaceutical markets are able to withstand the blow and recover.

In peacetime, other market participants treat monopolists like Optima-Pharm accordingly - without sentimentality. The military situation changed traditions. For example, Farmak’s business competitor (Farmak JSC) immediately expressed condolences to Optima-Pharm and promised to prevent “a shortage of medicines on the market or fundamental changes in logistics.” At the same time, Farmak hinted that it does not see the need for additional new regulatory initiatives coming from the state. That is, he advocated allowing distributors “for a certain period of time, as was the case at the beginning of a full-scale war to receive humanitarian aid with medicines,” to use warehouses that do not have GDP (good distribution practices), providing for actual compliance with the conditions for storing medicines there.

One coincidence cannot be ignored. It was on October 24 that the AMCU (Antimonopoly Committee of Ukraine) decided not to stop its decision to impose a fine of over 4 billion hryvnia against two large pharmaceutical distributors, BaDM and Optima-Pharm, which was appealed in court. From March 2020 to December 2023, both distributors almost simultaneously set the same prices for the most popular drugs like Spazmalgon, Bifren, Evkazolina aqua and the like. According to the AMCU, in the absence of objective reasons, the legislation on the protection of economic competition was violated in the market in the form of anti-competitive concerted actions.

And the very next day it turned out that the loss of the Optima-Pharm warehouse, coupled with a fine, could lead to a lack of liquid funds for distributors to pay for products to suppliers.

A few words about Andrey Gubsky, probably the most non-public oligarch in Ukraine and the owner of Optima-Pharm, who has a trail of accusations of fraud with medicines for Ukrainians. Gubsky, whose fortune experts estimate at $57 million, is called a representative of the old post-Soviet “mighty handful” of businessmen from the period of President Kuchma. Nepotism, clannishness, opaque sources of income - everything is intertwined here. Through his cousin, the odious ex-member of the Rada Bohdan Gubsky, the pharmaceutical magnate was even connected with Viktor Medvedchuk.

An interesting fact: in October last year, Optima-Pharm was among the companies receiving public funds from the state in terms of revenue for 2023. Revenue amounted to 56.7 billion hryvnia, 186.3 million hryvnia were credited to accounts. The experts I was able to talk to described the situation aphoristically: “The wrong person was attacked!” I mean, Gubsky, like the Phoenix, will find opportunities to rise from the ashes and “thank” the offenders. Dispersing panic around the impending shortage of medicines in Ukraine is beneficial only to those who regularly shell the country.

In principle, the conclusion echoes the official position of the Ministry of Health of Ukraine. On the air of the National Telethon, Deputy Minister of Health Edem Adamanov said: “Of course, the warehouse was huge. We have several distributors, but this is one of the largest. But the attack is not the first, and not the first attempt by the Russians to destroy everything. The company was ready for this. A reserve buffer warehouse is being launched, which will take over those volumes.”

The Deputy Minister added: other distributors are also reviewing their routes to ensure uniform supplies of medicines across the regions. According to Adamanov, the company will need two weeks to start the new processes. “During this time, there may be interruptions in one or another pharmacy. But this does not mean that there will be a shortage,” the official clarified.

Kyiv