Business on medicine: the history of the Fistal brothers and Reder

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Fistals are on tenders, Reder is on drugs — who controls the pharmaceutical market in Ukraine

The domestic pharmaceutical market continues to be a fertile base for businessmen with a dubious reputation — too large sums are spinning in this area, both from the budget and from the pockets of the population.

The largest businessmen from pharmacy in Ukraine are Petr Bagriy (PJSC “Ganza”, LLC “Pharmaceutical preparations of the regions”), people’s deputy of Ukraine and the owner of CJSC “Pharmaceutical firm “Darnitsa” Gleb Zagoriy, Boris Litovsky (LLC “Norton Ukraine” and many other), Nikolay Kuzma (LLC «Ukrmed»).

But there are Ukrainian businessmen in pharmacists who do not appear in scandals so often and try to stay away from publicity.

«Criminals» Fistal brothers and People’s Deputy Bakhteeva

Any large business connected with budgetary funds in Ukraine cannot do without a political “roof”. During the presidency of Viktor Yanukovych, there were two such main roofs — Minister of Health Raisa Bogatyryova and people’s deputy of Ukraine, then head of the parliamentary committee on health care Tatyana Bakhteeva.

The representatives in the business were the sons of the famous Donetsk doctor of medical sciences Emil Fistal — Vladimir and Herman.

Back in the times of Yanukovych, journalists made a list of 22 firms affiliated with brothers and doing business in state tenders for the purchase of medical equipment and medicines. The markup on drugs for public procurement could be up to 80%, while the equipment could be purchased at all by 500% more expensive than its average cost.

As a result, in 2012, firms affiliated with the Fistal brothers won tenders worth 1.79 billion UAH, and this is up to 330% devaluation of the hryvnia and inflation over the past few years.

At the same time, the quality of deliveries has traditionally been “lame” — the Ministry of Health refused to accept ambulances for the Vinnitsa, Dnepropetrovsk, Donetsk regions and Kiev and imposed penalties on suppliers.

After the change of power, the influence of the people’s deputy Bakhteyeva on the medical industry declined, but the status of a parliamentarian, now from the Opposition Bloc, and the old ties made it possible to preserve interests in the pharmaceutical industry.

Battle for the kidneys of Ukrainians: hemodialysis from the Fistal brothers

After 2014 and the loss of the lion’s share of the influence of their patron, the Fistal brothers disappeared from the first places of the winners of state tenders and from the attention of the media, but they did not abandon business on budget funds. Structures of the Fistal brothers focused on the supply of supplies for hemodialysis patients with renal insufficiency.

The hemodialysis procedure is carried out at the expense of public funds, which makes this area of the pharmaceutical market so beneficial, provided there are connections, of course. Similar ties to the Fistal brothers obviously found.

On March 16, 2016, the people’s deputy of Ukraine from the “People’s Front” Alexander Kodola from the rostrum of the Verkhovna Rada demanded to deal with the “hemodialysis mafia”. People’s Chosen stressed that about 5 thousand Ukrainians undergo hemodialysis in Ukraine and the state spends up to UAH 1 billion on consumables per year. Up to 7-8 thousand Ukrainians are still in the queue for hemodialysis, but many simply do not live to see their turn. The parliamentarian called the reason for this is the absolute monopoly of several firms on the hemodialysis market that seized and divided them among themselves. People’s deputy demanded from the Antimonopoly Committee of Ukraine and the Ministry of Health to fit in the situation.

The appeal of the people’s deputy did not arise from scratch: in November 2015, patients complained to the media that there were breaks in hemodialysis systems from the LLC “Rumed” supplier, allegedly under the influence of the Fistal brothers.

February 26, 2016 on the website of the National Police of Ukraine appeared information about the disclosure of the scheme of embezzlement of budget funds when purchasing supplies for hemodialysis. According to the investigation, two commercial structures, the winners of the tender for a total amount of UAH 82.6 million, overestimated the price of the goods by UAH 15 million, which were withdrawn into the shadows. According to media reports, it was a discussion of the firms LLC “Medical Trade Company” and LLC “Rumed”, affiliated with the Fistal brothers. However, not only did the National Police comment on this, but they also removed information about the embezzlement of UAH 15 million from the site.

However, these scandals have done little: in March, the Zhytomyr region purchased consumables for hemodialysis in the amount of UAH 26.42 million from LLC “Medical Trade Company”.

Already in May, the “Rumed” company of the Fistal brothers got UAH 69.5 million from the tender of the Vinnytsia Regional Clinical Hospital named after Pirogov.

In general, 2016 was quite favorable for Vladimir and Herman Fistal — their firms won numerous tenders for the supply of materials for hemodialysis. At the same time, Tatyana Bakhteyeva was attributed to their political cover a great success — landing in the chair of the head of the State Service of Ukraine of Ukraine on Medicines and Drugs Control of her person. It became the ex-head of the metropolitan administration of SMDC, Natalia Gudz, who had been in office for almost 2 years — until the autumn of 2018.

In 2017, the situation around the business of the Fistal brothers was repeated — firms affiliated with them continued to win in public tenders, which caused new scandals and accusations of officials of corruption.

Thus, in November, the Kiev City State Administration signed an agreement on the acquisition of 118 lifting platforms for wheelchair users for UAH10 million with a company, for which experts saw the hand of the Fistal brothers.

In general, the domestic hemodialysis market is so criminalized that even the SSU, periodically reporting on the exposure of companies, not only inflating the price of drugs and equipment, but also supplying frankly low-quality goods, took up the investigation on it.

By the way, the list of these violators also shows the “supporting” structure of the Fistal business on the hemodialysis market — LLC “Medical group-Ukraine”: according to media reports, the company is selling the cheaper Egyptian and Turkish consumables disguised as German and selling counterfeit equipment under the guise of the same German. However, there are no particular problems for the brothers, but an investigation by the SSU on the hemodialysis market, according to media reports, was caused by the refusal of market participants to pay for the roof and led to tragic incidents.

In any case, the Fistal brothers did not get any special losses, and they have already become accustomed to scandalous fame.

Anatoliy Reder: international drug lord or talented chemist with state award

The owner of the Odessa pharmaceutical company “InterChem”, Anatoliy Reder, is far less well known to a wide range of people.

Born in 1961 in Odessa, Reder first connected his life with science — after graduating from the chemistry faculty of Odessa State University, he studied in the graduate school of the Institute of Physical Chemistry of Ukraine. However, with the beginning of perestroika, plans changed and the future scientist became a businessman. In 1992, Reder became the head of Odessa-based OJSC “InterChem”, established as a Ukrainian-Belgian joint venture.

In 2010, “InterChem” turned into a CAR, a company with additional responsibility.

Anatoliy Reder’s activities are mentioned by representatives of various circles of the Ukrainian society, including at the highest level: by his decree, the President of Ukraine awarded the State Prize in Science and Technology for creating medicines to a number of “InterChem” employees, including Anatoliy Reder, Director General.

Also in the asset of pharmaceutical businessman there is the Order of St. Equal to the Apostles Prince Vladimir the Great III degree.

However, Reder’s rather narrow fame in Ukraine did not prevent him from being on the list of Russian sanctions against Ukrainian business. Along with domestic politicians and officials, businessmen from the pharmaceutical industry were also included in the sanctions list: Anatoliy Reder, general director of CAR “InteChem”, Lyubov Vishnevskaya, head of the board of PJSC “Indar”, Gleb and Volodymyr Zagori, the pharmaceutical company owners. Separately, the sanctions were imposed against the companies of PJSC «Farmak» and LLC «BadM».

Although, according to experts, domestic exports of pharmaceutical products to Russia are relatively small, the financial losses of the latter are obvious.

Despite the notoriety among the wide circles of Ukrainians, Anatoliy Reder enjoys a more than ambiguous reputation. The main reason for this is the medicine production by the enterprise “Kodterpin”, which contains caffeine and is often used as a raw material for the production of the self-made drug desomorphine, also known as “crocodile”.

The medicine “Kodterpin” is not included in the list of drugs whose turnover is somehow limited and it is used for coughing caused by a disease of the lungs and upper respiratory tract. Accessibility, coupled with the cheapness of the drug — about UAH 40-50, provides it with a steady demand among drug addicts for “cooking crocodile”.

On the basis of this, Reder is considered one of the largest drug barons of Ukraine, who also exported a large part of his production to the Russian Federation, which in fact could have caused Russian sanctions against him.

However, Anatoly Reder did not have a quiet life in Ukraine, especially in 2014. Then a uniform war broke out between the “InterChem” and the State Service of Ukraine on Medicines: having found a number of violations in the production technology of drugs and not having achieved their elimination, the State Service stopped production at the enterprise for several months. Only in November, the Supreme Administrative Court of Ukraine decided in favor of the enterprise.

After new personnel appointments, the State Service of Ukraine on Medicines lost interest in “InterChem” and its director.

However, law enforcement agencies began to show an interest in Anatoliy Reder: according to media reports, the pharmaceutical businessman has repeatedly initiated search operations for the import of raw materials — codeine in a much larger size than production required. But to realize all this into something more, not to mention the argument before the court, does not work because of the high patrons of Reder.

The political «roof» of Reder: from the governor to the SSU and people’s deputies

According to media reports, the list of persons who at various times provided the “political” and other roofs to the general director of “InterChem” is quite impressive and includes security officials, officials and politicians, many of whom Reder’s private helicopter, the URICH, helped to uncover.

According to journalists, the ex-governor of Odessa, Mikhail Saakashvili, constantly used the helicopter on his working trips. Also, “InterChem” is one of the founders of the charitable foundation “For the good of Odessa”, although the ex-governor has always claimed that the foundation was created by private business and has nothing to do with it.

People’s Deputies of Ukraine Alexander Kuzhel, who died in 2017, Odessa crime boss Alexander Angert, nicknamed “Angel”, were influential passengers of the business jet Bombardier Challenger owned by Reder.

A curious coincidence: in June 2018, Alexander Kuzhel with his fellow Oleg Musiy and Andrey Shipko accused the SSU of putting pressure on “InterChem” and the possibility of falsification against the company of criminal cases and mask shows.

At this time, members of the nationalist organization «Sokol» on their Facebook page began a campaign against the company, accusing him of drug trafficking.

Obviously, the parliamentarians hinted that the SSU was behind the “Sokol”. The statement of the people’s deputies did not take effect — the “Sokol” campaign against the enterprise continued and eventually ended with an attack on the office of “InterChem” on 23 August.

However, according to the media, “InterChem” had its “intercessor” in the Security Service of Ukraine — the head of the counterintelligence service of the SSU, Sergey Semochko, who had covered the company when he was still serving as the deputy head of the regional USSU. Surname of Semochko also sounded as the initiator of checks of the SSU on the hemodialysis market.

“InterChem” is very anxious about its reputation, now and then suing the media, spreading the charges of the enterprise in drug trafficking and happens to win.

Thus, for the pharmaceutical business, the revolution of dignity did not change the conjuncture on the Ukrainian market, except that the “loyalty” of the authorities is now more expensive.