Business news from Ukraine

To the President of Ukraine, Mr. Volodymyr Zelensky

To the Prime Minister of Ukraine, Mr. Denys Shmyhal

To the Minister of Health of Ukraine, Mr. Viktor Lyashko

Head of the Verkhovna Rada Committee on Health, Medical Assistance and Medical Insurance

Mr. Mykhailo RADUTSKY

Head of the State Regulatory Service of Ukraine Mr. Oleksiy KUCHER

Chairman of the Antimonopoly Committee of Ukraine Mr. Pavlo KYRYLENKO

Support for the state initiative and commitments of manufacturers

Association of Pharmaceutical Manufacturers of Ukraine (hereinafter referred to as “AVLU”) and the Association of Employers’ Organizations of the Medical and Microbiological Industry of Ukraine (hereinafter referred to as “OORMMP of Ukraine”), which unite more than 100 domestic pharmaceutical companies for the development of the market, improvement of the regulatory environment, and ensuring access to quality medicines for Ukrainians, express their respect and appeal with the following.

Leading domestic pharmaceutical manufacturers signed on February 7, 2025, the “Declaration on Cooperation of Leading Domestic Pharmaceutical Manufacturers to Reduce and Stabilize Prices for Medicines” (hereinafter referred to as the “Declaration”), in which they expressed solidarity with the state’s position on the need for systemic reform of the pharmaceutical industry and support the initiative to reduce prices for medicines for end consumers.

In support of the initiative of the President of Ukraine and the Government to ensure the availability of medicines for Ukrainian citizens, 32 (thirty-two) leading domestic manufacturers of medicines reduced the selling prices of 303 (three hundred and three) of the most commonly used medicines sold and available in pharmacies in Ukraine by 30 (thirty) percent compared to the selling (list) prices of January 2025, and appealed to the Verkhovna Rada of Ukraine, the Cabinet of Ministers of Ukraine, and the Ministry of Health of Ukraine with a request to regulate the following issues at the regulatory level as soon as possible:

• introduce transparent pricing mechanisms for medicines;
• regulate the provision of marketing services;
• adopt appropriate amendments to the Resolution of the Cabinet of Ministers of Ukraine “On measures to stabilize prices for medicines and medical devices” dated October 17, 2008, No. 955, regarding the regulation of trade (retail) markups on medicines registered in Ukraine (except for narcotic, psychotropic medicines, precursors, and medical gases);
• adopt the Law of Ukraine “On Pharmacy Activities,” which, among other things, will regulate the activities of pharmacies as healthcare institutions, define “pharmaceutical services,” the procedure for their provision, as well as the mechanism for calculating and regulating their cost; introduce transparent, time-tested European rules for the activities of pharmacies and pharmacy chains;
• regulate the “Bolar Provision,” namely, the urgent and clear enshrinement in the Law of Ukraine “On the Protection of Rights to Inventions and Utility Models” of the rule that the filing of an application for state registration of a medicinal product and the registration of a medicinal product (obtaining a registration certificate for a medicinal product) shall not be recognized as an infringement of the patent rights of the patent holder, which will allow manufacturers to bring high-quality generic drugs that are cheaper than the originals to the market in a timely manner and avoid artificial monopolies in the drug market, as well as make appropriate changes to the legislation that prevent the unjustified extension of patent holders’ property rights for the duration of martial law;
• ensure the accelerated entry into force of the Law of Ukraine “On Medicines” dated July 28, 2022, No. 2469-1X.

Essence of the problem: regulatory uncertainty and market risks

Decree of the President of Ukraine No. 82/2025 of February 12, 2025, enacted the decision of the National Security and Defense Council of Ukraine of February 12, 2025, “On additional measures to ensure the availability of medicines for Ukrainians” (hereinafter referred to as the “NSDC Decision”). In accordance with subparagraph 5 of paragraph 2 of the NSDC Decision, the Cabinet of Ministers of Ukraine was instructed to “take measures to ban, from March 1, 2025, the provision of marketing services, services for the promotion of medicines, information and other services related to the sale of medicines to end consumers, in relation to medicinal products used by legal entities regardless of their organizational and legal form and form of ownership, individuals – entrepreneurs engaged in economic activities related to the production of medicinal products, wholesale and retail trade in medicinal products, import of medicinal products (except for active pharmaceutical ingredients), until the introduction by the Cabinet of Ministers of Ukraine of separate referencing of wholesale prices for all medicinal products.

In accordance with the Decision of the National Security and Defense Council, the Cabinet of Ministers of Ukraine adopted Resolution No. 168 of February 14, 2025, which stipulates that until the introduction by the Cabinet of Ministers of Ukraine of separate referencing of wholesale prices for all medicinal products, it is prohibited to provide marketing services, services related to the promotion of medicinal products, and services related to the distribution of medicinal productsNo. 168, which stipulates that until the Cabinet of Ministers of Ukraine introduces separate reference pricing for wholesale prices for all medicinal products, it is prohibited to provide marketing services, services for the promotion of medicinal products, information and other services related to the sale of medicinal products to the end consumer.

On April 17, 2025, Resolution No. 439 of the Cabinet of Ministers of Ukraine dated April 4, 2025, “Certain Issues of State Regulation of Prices for Medicines,” came into force, which, in particular, approved the Procedure for Referencing Prices for Medicines.

On April 28, 2025, Law of Ukraine No. 4239-IX dated February 12, 2025, “On Amendments to Certain Laws of Ukraine Regarding the Specifics of State Registration of Medicines That May Be Purchased by a Person Authorized to Make Purchases in the Field of Health Care,” came into force. and the regulation of certain issues related to the sale of medicinal products,” which stipulates that the conclusion of commercial contracts whose subject matter is directly or indirectly the provision of marketing services, medicinal product promotion services, or other services related to the sale of medicinal products to the end consumer at points of retail sale of medicinal products is permitted exclusively between business entities that manufacture or import medicinal products with a pharmacy and/or pharmacy chain. The procedure and conditions for the provision of such services are approved by the Cabinet of Ministers of Ukraine.

On March 28, 2025, the Ministry of Health published on the website of the Ministry of Health of Ukraine a draft resolution of the Cabinet of Ministers of Ukraine “Certain issues of providing marketing and other services related to the sale of medicinal products to end consumers, and the use of tools for the actual reduction of purchase prices after the transfer of ownership of goods” (hereinafter referred to as the “CMU Resolution on Marketing of February 28, 2025”) for public discussion.

On May 14, 2025, the Ministry of Health published on the website of the Ministry of Health of Ukraine an updated draft CMU on marketing (hereinafter referred to as the “CMU on marketing dated May 14, 2025”).

Comments on the draft CMU on marketing dated May 14, 2025

Based on the analysis of the updated draft CMU on marketing dated May 14, 2025, we would like to draw your attention to the following:

1. The draft CMU on marketing dated May 14, 2025, proposed by the Ministry of Health of Ukraine, provides for a ban on the provision of marketing services for prescription drugs and at the same time sets a limit on pharmacies’ income from marketing services at 12% of the total sales of drugs (including prescription drugs). This model contradicts the law and is an obvious and blatant manipulation to the detriment of consumers, given that over-the-counter drugs account for only 37% of the market, the percentage of marketing payments in the price of over-the-counter drugs will exceed 40% of the manufacturer’s wholesale price. This is in addition to the retail markup of 35% permitted by Ukrainian law.

The real increase in the price of an over-the-counter drug at the pharmacy level for the consumer will be 75% of the distributor’s price.

1. The draft CMU resolution on marketing in this version of the Ministry of Health of Ukraine does not define a list of permitted marketing services aimed at consumers at the point of sale, as proposed by many participants in the public discussion. An unjustified payment in the form of a fixed percentage of the total volume of medicines sold by a pharmacy has been established—this approach is more like a “shelf space fee” for manufacturers.

Such a payment, without a fixed list of clear and transparent services based on the European model defined at the legislative level, has nothing to do with the manufacturer’s marketing activities and is in fact a form of systematic racketeering.

1. At all meetings organized by the Ministry of Health of Ukraine as part of the public discussion of the draft CMU resolution on marketing, despite calls from national manufacturers, the issue of the availability of medicines for Ukrainian citizens, which is a key factor in the reform initiated by the President of Ukraine and the Government, was never discussed. Contrary to this, all discussions boiled down to the need to develop compensation for the decline in the profitability of the pharmacy business that existed before the state limited retail markups to 35%. The Ministry of Health found a solution to compensate the pharmacy business for this drop in profitability through a non-transparent marketing payment, which is actually a “shelf space” payment for manufacturers. All meetings have been reduced to discussions about the profitability of pharmacies. The needs of patients have never been discussed. This is an institutional mistake.

1. The pharmacy market is oversaturated and degraded. The number of pharmacies in Ukraine is 2–3 times higher than European standards, and in large cities, there are three pharmacies “door to door” at almost every intersection. This number of pharmacies does not correspond to the actual number of pharmacists—a significant proportion of pharmacies are staffed by individuals who do not have the appropriate education.

Consumers and patients are forced to buy unnecessary drugs from manufacturers who have agreed to pay marketing fees, while other manufacturers are simply removed from the shelves.

1. Following public discussions of the draft CMU resolution on marketing, none of the manufacturers’ amendments were adopted, while all amendments proposed by the pharmacy business were accepted. This situation is cause for concern, as the regulatory function has been handed over to the pharmacy business. The reform of the pharmaceutical market, initiated by the President of Ukraine and the Government to ensure the availability of medicines for patients, loses its meaning if the state does not guarantee that it is the patient who will benefit – through lower prices, transparent choice, and the accountability of pharmacists. The “rules of the game” in the pharmaceutical market are not set by the state, but by five non-public business groups of pharmacy chains that own more than 70% of the market. This is not a market — it is corporate dictatorship in the absence of state arbitration.
2. Instead of creating transparent pricing rules in the pharmaceutical market and increasing the availability of medicines for Ukrainian citizens, national manufacturers have been offered an opaque marketing payment “for shelf space,” a primitive duty in favor of non-public owners of so-called “pharmacy chains” without any legal mechanism.

In the information field, pharmacy monopolists are trying to distort reality and refer to the approval of the draft CMU resolution on marketing dated May 14, 2025, by all market participants. We would like to inform you that this is not true – the draft CMU resolution on marketing dated May 14, 2025, has not been agreed upon by manufacturers who are marketing entities and whose activities are intended to be regulated by the marketing procedure. Moreover, this order does not take into account the interests of consumers or manufacturers, their proposals and comments.

Today, a dirty information campaign has been launched against those manufacturers who advocated transparent pricing and supported the President’s initiative by reducing the prices of their main medicines by 30%. The medicines of these manufacturers have been effectively removed from the shelves of pharmacies belonging to a monopoly cartel, which are the top five pharmacy chains in the Ukrainian pharmaceutical market.

1. The largest patient organizations, 100% Life and Patients of Ukraine, have also expressed their categorical position on marketing contracts that contribute to price inflation in pharmacies and insist on a complete ban during the war.

Disregard for the interests of patients and society

Patients are not market objects, but the market’s goal. All reforms must be evaluated according to a single criterion: does it improve patients’ access to safe, high-quality, and fair treatment?

If the price of an over-the-counter drug increases by 75%, who benefits from the reform?

Today, vulnerable groups of citizens—the elderly, patients with chronic diseases, and residents of remote regions—are the first to feel the effects of opaque pharmacy policy. Manufacturers who reduced prices by 30% on more than 300 drugs were effectively “kicked out” of pharmacies. Their drugs disappeared from the shelves, leaving consumers with more expensive alternatives. This is not a market. This is discrimination against patients as the weakest link.

If the president initiates a reform in the interests of citizens, but it is implemented for the benefit of the pharmacy cartel, then a change of course is needed, not superficial loyalty to pharmacy chains.

According to researchers, 37% of the Ukrainian pharmacy market consists of over-the-counter medicines, most of which are purchased monthly by the same people. If the cost of such medicines increases by 75%, this is not an abstract price increase—it is 3 million vulnerable Ukrainians who are forced to choose between food and medicine.

When the Ministry of Health of Ukraine approves a model of a 12% marketing payment without specifying the services, the result is not reform, but a 40% increase in the price of over-the-counter drugs. This is not a market mechanism, but a regressive tax on the poor: those who buy drugs without compensation pay the most.

We urge the government to keep the focus of the reform on guaranteeing fair access to treatment for citizens, not on preserving business profits. Without this, any reform is just a sham.

Alternative proposal from manufacturers: a transparent and controllable model

Despite all the attacks, national manufacturers have proposed clear mechanisms for introducing transparent marketing services with understandable calculations, namely 10% of the sales volume of a specific over-the-counter drug for which marketing services were provided. The calculation and control of the limit on marketing services is carried out by the manufacturer on the basis of primary accounting documents, which can be verified by the State Tax Service during scheduled and unscheduled inspections. Marketing services in cash and percentages are reflected in each fiscal receipt as a transparent, controllable payment. Under this model, consumers understand how much they pay for the marketing of a particular medicinal product.

Following discussions with manufacturers and other market players, the Ministry of Health removed the CMU publication on marketing dated May 14, 2025, along with accompanying documents, from its official website. As of today, the first edition of the CMU resolution on marketing dated February 28, 2025, has been published on the official website of the Ministry of Health of Ukraine.

Subsequently, the Ministry of Health, taking into account the proposals of market players and comments from state authorities on the need to verify the calculations of the impact of the proposed regulation on consumers, an updated draft CMU resolution on marketing was prepared, which was publicly discussed by market participants on May 26, 2025, at a meeting chaired by the Deputy Head of the Office of the President.

The updated draft CMU resolution on marketing, prepared and presented by the Ministry of Health of Ukraine on May 26, 2025, although it does not take into account some of the manufacturers’ proposals regarding the regulation of the provision of marketing services, is balanced and aimed exclusively at protecting the interests of consumers, not pharmacies and manufacturers. Based on the results of its analysis, it appears that the regulatory impact will indeed be aimed at reducing the price of medicines for the end consumer.

Final position: a compromise model

In view of the above, we insist on the adoption of the draft resolution of the Cabinet of Ministers of Ukraine “Certain issues of providing marketing and other services related to the sale of medicines to end consumers, and the use of tools to effectively reduce purchase prices after the transfer of ownership of goods,” published by the Ministry of Health on May 26, 2025, which aims to meet consumer needs and takes into account the interests of all market players by limiting the marketing entity – the manufacturer – in its marketing service costs depending on whether the drug is available over the counter or by prescription.

The adoption of this draft will return the logic of the reform to its original meaning – protecting patients, rather than balancing the business interests of pharmacies and manufacturers. The focus is not on profits, but on health.

Sincerely

President of the Association

of Pharmaceutical Manufacturers of Ukraine

Petro Bagriy

President of the Association

of Employers in the Medical

and Microbiological Industry

of Ukraine Valery Pechaev

Source  https://interfax.com.ua/news/press-release/1076110.html