Stefanishyna: We have an ugly healthcare system

Expert: We hope Ukraine’s health minister loses it and tells everything just like Abromavicius

16:10, 17.03.2016
10 min. Interview

Executive Director of a charity fund called Patients of Ukraine, Olha Stefanishyna, has told UNIAN how much money is needed for treatment of critically ill patients; how MP Zagoriy and Deputy Health Minister Oleksandra Pavlenko were disrupting the adoption of revolutionary law on procurement of medicines, and who is to blame for the failure of healthcare reforms.

You said recently that the Cabinet should disburse over UAH 8 billion for the treatment of critically ill patients. Why so much? Do we have a register of patients?

There are actually no registers of patients in Ukraine, so it’s impossible to calculate down to kopiyka the precise sum needed for the treatment. But there are evaluations made by the Health Ministry on critically ill patients, such as TB patients, those with oncology, different types of hepatitis, etc. Their treatment is carried out at the expense of the state budget, the so-called government programs. In their framework, the Health Ministry in 2015 filed a request to the Ministry of Finance, indicating a minimum amount of UAH 8.1 billion. This is the sum we have voiced. It is not similar to the sum named by the patients – they have calculated a much more significant amount.

For example, the programs funded by the Health Ministry exclude treatment of cystic fibrosis. Children only. The patient’s data on the number of those diagnosed with cancer are 10 higher than that of the Health Ministry. Therefore, UAH 8.1 billion is a vital minimum. But only UAH 4 billion was laid out in the budget.

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Do we know the Finance Ministry’s arguments?

They say that they had laid out as much as it was for 2015. But the exchange rate varies. At the same time, we should not forget that 95% of medicines is purchased using foreign currency – the dollar or the euro. Having budgeted only UAH 4 billion for 2016, the Cabinet automatically cut the treatment in half.

It’s clear with the funding now. What about the allocation of these UAH 4 billion? Is there going to be a tender procedure?

Yes, definitely. We have a resolution of the Cabinet of November 4 2015, which states that all centralized procurement of the Health Ministry in 2016 shall be implemented through international organizations. We see this as one of the most important steps of the Health Ministry in the last twenty years. Finally, the corruption mechanism that has been working in favor of certain top level officials, will be broken.

We are confident in the procedures carried out by UNICEF, UNDP, and the UK-based Crown Agents. They have an extensive international experience of more than 100 years. They have long worked in the procurement field and they know how to do it. Most importantly, they don’t have such corruption, which has permeated the Health Ministry.

If we forget the corruption component, how much money could be saved by attracting international companies to the procurement of medicines?

The official stats of theSecurity Service of Ukraine says that in 2012-2014, the up to 40% of the funds in the Ministry of Health was being stolen. The investigation is ongoing. I believe, we are talking of at least $150 million. I think, this is the corruption component we will be able to remove.

Have any procurement procedures been completed through international companies?

Partially. In late 2015. The thing is that the Ministry of Health, instead of holding the tenders in April, decided to hold them in November and December. Then was the time when the first tranche was disbursed to international organizations for the purchase of medicines to start for 2015.

How is that?

Well, our system is ugly, so to speak. But anyway, it is a great breakthrough. The money was transferred only for half of the programs: of UAH 4 billion only about UAH 2 billion: for the treatment of AIDS, tuberculosis, child/adult oncology, hemophilia, hepatitis, orphan diseases; as well as for vaccination.

To date, the purchase is almost complete. The medicines will be delivered to Ukraine within a few weeks. It is a big step for us, as I said, in tackling corruption. We are sure that the money that was allocated will not be stolen, and the patients will receive necessary medication.

And what about procurement of medications for 2016?

We hope that this year, the Health Ministry will announce a tender much earlier. Now it is March already. A lot depends on when the purchases will be greenlighted.

Are you saying that the process has slowed down?

We don’t see it moving. Nomenclature commissions for 2016 still haven’t started their work, they are just being formed. But if they are set up and start their work before late March, everything will be fine.

Let’s say, this "tender" problem will be solved. But there is another issue, no less important: public access to quality medication. How can it be solved?

We see that the prices of medicines in Ukraine are two-three times higher than in Georgia and Hungary.

There are several reasons for that. The first is taxation. Ukraine has a 7% VAT and a 5% duty on imports of medicines. It is clear that, automatically, this 12% tax burden is put on the patients’ shoulders. If this tax is removed, the prices should be reduced. But to achieve this, the state should implement a special policy. In the meantime, the state does the opposite. It collects taxes in order to use the money for purchasing medication.

But the state is failing with this task...

That is exactly the problem. The shortage of funds for all state programs is huge. 80% of Ukrainians can’t afford to buy basic medication, according to statistics. 1,600 Ukrainians die from serious illnesses daily.

And what is the second reason for the high prices of medicines?

Over-regulation of the market. Former PM [Mykola] Azarov and [Oleksiy] Soloviev (head of State Medication Service at the time) created too many barriers for the medicines to enter the market). A large number of drugs was not registered at all. For example, in oncology, about 30% of drugs is privately brought to Ukraine by volunteers, just because these drugs are not registered. It is not profitable for pharmaceutical companies to enter this market, as they understand that they won’t sell a lot of medicines here, but they will still have to spare too much effort and resources on registration.

Could you give a specific example? On the Internet I read a story on how the State Medication Service and the State Expert Center at the Health Ministry banned the use of Mildronate produced in Lithuania and Slovakia. Is it true?

It is a perfect example. Mildronate is registered in Lithuania, and the manufacturing company has GMP certificate, issued by the inspection in the UK. However, our officials are going to Lithuania, check the papers and say that they will not register the medication produced by this company, claiming the lack of some documents.

In whose favor was this decision taken?

Most likely, it was in favor of Darnitsa pharmaceutical company, which launched production of the same kind of drug just at that moment. It is quite obvious tha the Lithuanian drug was banned specifically not to allow the competitor company to sell its product in Ukraine. It’s the same with many other drugs. The market is regulated manually.

So, it’s nonsense when our officials go to the EU to decide on a quality of medications. The Western companies have already passed severe quality control and obtained the necessary certificates. Ukrainian quality control system isn’t even close to the European one.

So the first thing we demand is to recognize registration in the European Union, U.S., Australia, Japan, and Canada. These are the countries with strict jurisdiction. If the drugs did not pass registration procedures in countries with strict jurisdiction, we believe it is necessary that the full registration cycle be launched before they enter the Ukrainian market.

One of the founders of Darnitsa pharmaceutical company is MP Hlib Zahoriy. Now it becomes clear why it was important for him that his aide Ivan Bavykin be appointed head the State Expert Center (SEC)...

Zahoriy always had an influence over the State Medication Service (SMS) and the SEC. Oleksiy Solovyov, head of the SMS in times of Yanukovych, was also his protege. But the attempt to appoint Bavykin in summer of 2015 head of the SEC ended up in a scandal. The appointment was derailed. Just imagine, the owner of Ukraine’s largest pharmaceutical company of the country, MP from the pro-presidential party is lobbying the appointment of his aide to the top post at the agency, which directly influences registration of medicines. Only in Ukraine is this possible.

As far as we know, the situation today both in the SEC and the SMS remains unclear. They even don’t carry out necessary checks of medicines. That is why the amount of counterfeit medications has increased in Ukraine.

Many foreign medications have Ukrainian analogs. How legitimate was the obtaining by the national pharmaceutical companies of licenses for their production?

If there is a patent on the drug, no one else has the right to produce it. But there are copies of drugs. In medicine, they are called generics. Their quality – Ukrainian, Indian, or other production – is very important for patients. As a civil organization, we not trust generics registered when the SMS was headed by Solovyov. At the time, in order to register a drug, it was necessary to give bribes. Due to corruption, the Ukrainian system of drug quality testing is very difficult to trust.

But there are other examples. In 2000, the treatment of a HIV-positive patient cost $10,000 a year. It is very expensive. Many people died because there was no medication. But then came high-quality generics from India. Now the treatment of a HIV-positive patient costs $250 per year. The difference is significant. At the same time, patients receive quality care. Sometimes, however, the Ministry of Health somehow purchases generics at a price of brand medication. But this is another question.

Stefanishyna: We hope that someday Kvitashvili will be a better man

This is just one part of the problems. But there is another. For example, the Austrian company Megainfarm GmbH has for several years been challenging Darnitsa pharmaceutical company in courts over the patent for eye drops. Darnitsa has lost in all courts. But now it is up for the new round of litigation. Don’t such actions affect the image of Ukraine?

I know nothing about this case. But I'm not surprised, as Darnitsa is in a very privileged position.

So is it that nothing is changing at all?

Let's start with the fact that Hlib Zahoriy, being an MP, is at the same time the owner of a pharmaceutical company, so it already raises questions. He has influence. As a People's Deputy, he has access to officials.

Secondly, it is no secret that the officials are appointed under certain quotas. Health Minister Kvitashvili became minister on the quota of the pro-presidential party. It is logical to assume that members of the pro-presidential forces influence the appointment of deputies.

But most importantly, our organization has reasons to believe that there is a connection between Zahoriy and Oleksandra Pavlenko, First Deputy Minister of Health.

And this applies to the above-mentioned procurement by international companies. For example, when we developed a draft law on procurement in February 2015, it was Oleksandra Pavlenko who greatly interfered with the passage of the draft law in the Verkhovna Rada. She made a phone call to the head of the committee and said that the bill shouldn’t be registered. Her argument was simple – the law is bad, and she has comments to it. This is the standard practice of braking the process of the adoption of laws. She also sent her comments to us. They were very strange.

What was so strange?

For example, the offered  idea that the law should be adopted only to be effective for a year; and that it is not necessary to determine the exact list of executive regulations to support this law. This meant that the Ministry of Health would receive the right to manipulation. We won in the battle of turning down those amendments to the draft.

Once our bill was tabled in Parliament, alternative “clones” emerged overnight, drafted by Hlib Zahoriy and Oleksandr Tretyakov. So, the texts of these bills were 90% identical to those that sent to us by Oleksandra Pavlenko.

But Hlib Zahoriy in an interview with Liviy Bereh argued that he had no influence over the Ministry of Health and that, despite First Deputy Minister Oleksandra Pavlenko being his acquaintance, he fell out with her ...

I emphasize once again. In our opinion, Hlib Zahoriy and Oleksandra Pavlenko are absolutely connected. I know for sure that Kvitashvili didn’t appoint Pavlenko his deputy upon his own will. The pressure was put on him, but he has denied it to this day.

Did you know Kvitashvili before?

Yes. He was a member of a working group on developing a national strategy for healthcare reform. He worked with our organization in the summer of 2014.

So, you’re saying this person you’ve worked with can’t be honest with you?

He was honest with us, but he won’t admit it in public. But maybe he will lose it one day, like Aivaras Abromavicius, and tell everything. We do hope that someday he would be a better man.

Now, Darnitsa wants to totally absorb its rival - Borschahivsky Chemical Plant...

This is not very good, when one competitor absorbs another one. All this leads to monopoly, while there should be competition. Hopefully, the Antimonopoly Committee will nevertheless carefully examine the issue and take a balanced decision.

Corruption in medicine, lack of reforms, attempts to illegally seize the intellectual property of foreign pharmaceutical companies – aren’t these things damaging to the image of the country?

For international companies, the image of Ukraine has not gone far from Africa. But today, we are at risk of a great international embarrassment due to the possible disruption of procurement by international companies. They are being attacked with dirty PR.

Is it Zahoriy who is behind these attacks?

There are other dark forces. According to our assumptions, Dmytro Podturkin is behind the attacks. He was a tender procurement adviser at the Health Ministry from 2011 to 2013, when Minister of Health was Raisa Bohatyryova. Now he is a member of the External Advisory Council of public organization called Medical Control. Lots of dirt is poured from this organization’s website on the activities of UNDP, UNICEF, and the UK-based Crown Agents.

The main purpose is to undermine the image of foreign companies and force them to leave Ukraine. If this happens, the blow to the reputation of our country will be enormous.

Your organization was established in 2011. Can you compare how it is to deal with the ousted criminal regime and the present authorities?

This government is more afraid of publicity. To achieve something before, we had to break walls. No one could ever dream of tenders with participation of international companies before the Revolution of Dignity. A priori, it was impossible at a time when the ministry was headed by Bohatyryova, while the Rada Committee was led by Bakhteyeva.

But the passage of the bill for admission to the procurement of international companies was not easy either, wasn’t it?

Yes, it was a war with the pharmaceutical mafia, and it still continues. But we have seen that with some public pressure, results can be achieved. Of course, the new government still does not hear many other things.

For example, the issue of connection between Zahoriy and Pavlenko has been raised so many times, and nothing happens…

Yes, this is just one of the bad examples. We hope that the current government will be afraid to appoint Pavlenko Minister of Health.

But we also see no reforms in healthcare. As in the days of Yanukovych, it all boils down to one thing – the closure of hospitals...

Minister Kvitashvili should be blamed. He is speaking about the right things, but he hasn’t done anything.

But the minister accuses MPs who refuse to pass bills developed by the government...

This situation is wrong. No personal motives should affect the implementation of reforms in such a socially important field as healthcare. In fact, both sides are to blame. And the conflict between them is really personal. It began with the international procurement: the head of the committee registered the draft law on the admission of international companies to tender procurement, while Pavlenko opposed the move. I have already spoken about it. But then Kvitashvili did nothing to establish contact with the deputies. Moreover, the minister was fueling the conflict, accusing People's Deputies of all mortal sins on live TV.

Had Kvitashvili been interested in implementing reforms, he would have pushed back his ambitions and tried to reach a compromise.

As an example, when we lobbied our draft law on international procurement, and Zahoriy filed an alternative draft, we first publicly stated that we see obstructions by the Mafia. But then we held consultations with them at a round table for a week, discussing all amendments. Zahoriy had a clear goal – the law had to be adopted for just one year. We proposed the unlimited duration. As a result - we agreed that the law would work for four years. To achieve the goal, we had to step over ourselves and negotiate with those people's deputies, which prevented the passage of legislation in parliament. And they eventually had to adopt these laws.

Therefore, Kvitashvili should sit down at the negotiating table with Olha Bohomolets and Oleh Musiy, and go through all the bills aimed at reforms in healthcare. And this must be done as soon as possible. Public accusations will be of no help.

Mykola Babych (UNIAN)

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