Up to half a billion dollars stolen annually from Russian state drug purchases — Proekt...

Up to half a billion dollars a year is stolen from state drug purchases in Russia — Proekt

The main channel for corruption in drug procurement is manufacturers’ secret “commercial bonuses,” which are converted into bribes through small regional companies, Proekt journalist Ekaterina Reznikova said.

The investigation began with a source who was a former employee of a major pharmaceutical company involved in distributing oncology drugs, Reznikova explained. According to Proekt, bribes account for 10% to 20% of the money Russia spends on expensive drugs.

According to the journalist, the scheme works as follows: a drug costing 100,000 rubles per package brings the distributor a bonus of around 30%. The major distributor keeps part of it, while the rest goes to regional intermediaries who take part in tenders. The intermediaries are needed because “Western companies don’t want to pay bribes themselves.” These are small firms with no warehouses of their own, created several years ago, that nevertheless handle “tens of billions of rubles in purchases.”

“The entire vast system that steals up to half a billion dollars a year from state drug purchases in Russia remains out of sight,” Reznikova said on TV Rain.

By her estimate, there have been a couple of dozen criminal cases in recent years, but those caught were small distributors paying isolated bribes. The Kremlin also knew about the scheme, she recalled: in 2022, Putin was briefed on a major scheme that had been “uncovered” in which Western pharmaceutical companies were corrupting officials and doctors, but nothing came of it.

Drug prices and pharmacy markups in Russia are regulated by the state, but secret bonuses are not regulated at all. According to Reznikova, the Federal Antimonopoly Service, the Health Ministry and the government could cap them at 3–5%, which would lower drug prices by at least 10–20%.

“[They steal — editor’s note] exactly as much as the state currently needs to treat all cancer patients. And of course, the only people who lose out from all this are the patients, because everyone else gets something out of this scheme. The stream keeps flowing quietly along, and at every stage a little sticks to dirty hands,” Reznikova added.

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