Petro Ivanovych Bahriy
Official biography
Born on July 8, 1966 in Halayky village, Tetiiv district, Kyiv region.
- In 1983 — 1989, he studied at the Heat and Power Engineering Faculty of the Kyiv Polytechnic Institute, graduating with a degree in mechanical engineering.
- 2014 г. — Candidate of Technical Sciences, Kyiv Polytechnic Institute.
- In 1989-1994, he worked at Kyiv Special Department No. 23 “Boiler Installation” of the trust “Promtekhmontazh-2” as a foreman, deputy head of the department. April 1989 — February 1994 — Kyiv Special Department No. 23 “Boiler Installation” of the trust “Promtekhmontazh-2”, foreman, deputy head of the department, senior engineer.
- Since February 1994, he has worked at the Ganza Trading House as Chief Engineer, General Director, and now as Executive Director of Ganza Trading House. He started his business in construction at the Zhebrivsky plant.
- Since 2007, he has been the President of the Association of Pharmaceutical Manufacturers of Ukraine.
He is a beneficiary of Ganza, Ukropptpostach, Farmadis, Sky Pharm, Lumiere Pharma and other companies that are regular winners of the Ministry of Health of Ukraine’s tenders, including those for the supply of drugs for the treatment of HIV/AIDS, tuberculosis, and hepatitis.
Related parties
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Compromising material
There will always be people who are willing to walk over dead bodies for big money. Among them, the representatives of the pharmaceutical mafia Petro Bahriy, Anatoliy Reder and Filya Zhebrovska occupy a special position. Dirty corruption schemes have allowed them to make multimillion-dollar fortunes. And ordinary Ukrainians suffer, as usual, as they are forced to overpay for medicines tenfold.
The pharmaceutical mafia and its partners in any government have been making billions from ordinary people for decades. Today we are going to tell you about one of the most prominent representatives of the pharmaceutical oligarchs. Among them is the main tender mafioso of our country and simultaneously the President of the Association of Pharmaceutical Manufacturers of Ukraine — Petro Bahriy.
Petro Bahriy. How it all started
Of course, like most unscrupulous intermediaries, Petro Bahriy, better known in the medical world as Petya Bezpredelshchik, started his pharmaceutical business back in the 90s with barter schemes: his company Hanza performed repair work at Farmak in exchange for medicines. Such a simple scheme brought Bagriy 200-300% profit.
When barter payments ceased to be the main driving force of the business, he decided to turn his attention to an equally profitable activity — public procurement.
And this became a real “gold mine” for the new future pharmaceutical tycoon.
Being far from pharmaceuticals, Petro Bahriy creates companies that duplicate Ganza — L-Contract, Alter Ego, Emergencia, Pharmaceuticals of the Regions, Sumy Pharmaceutical Company, etc. — to make himself more important. It was also at this time that he acquired numerous contacts in the government, and since 2003, Bagriy’s companies have been regular winners of the Ministry of Health of Ukraine’s tenders for the supply of not only medicines but also medical equipment.
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Prices for medicines were inflated 20 times
Ganza and its clone companies made their unimaginable profits on the difference between the price of purchasing drugs from suppliers and selling them to the state. These are just a few of the facts of corruption that were made public in the group of companies around Ganza, prepared in 2008 by Valeriy Konovaliuk on behalf of the Verkhovna Rada Committee on Health. According to the document, only in 2005-2007. “unclean” schemes of suppliers, including Bagriya’s firms, led to the fact that, for example, prices for anti-tuberculosis drugs were inflated by an average of 2-3 times, and in some cases — by 22 times, when compared to Ukraine’s neighboring countries.
If we look at the picture globally, the group of companies around Ganza controlled more than 90% of the funds allocated from the budget for the procurement of medicines under the programs Oncology, Tuberculosis, AIDS, Multiple Sclerosis and a number of others. This amount could reach a billion hryvnias a year.
Patients do not receive quality medicines because of Bahriy’s schemes
Having earned a lot of money on the shady drug sales schemes, Bahriy decided to continue monopolizing the drug market. He was attracted by the opportunity to “squeeze” the supply of painkillers for state medical institutions. To this end, in February 2018, an agreement was signed with the Lithuanian company Kalceks, which sells painkillers. Diatom, owned by Petro Bahriy, became a partner and received exclusive rights to sell Lithuanian medicines. Calcex does not manufacture its own products, they are contracted to other countries, and accordingly, there is no proper certification of production conditions from the State Service of Ukraine on Medicines. In April 2018, Diatom imported the products to Ukraine, but was unable to clear them through customs due to litigation. The goods stayed for all 3 months of proceedings at Boryspil airport, in a regular customs warehouse (not a specialized “pharmaceutical” warehouse). Most drugs have strict restrictions on storage conditions — a special temperature regime, direct sunlight is contraindicated, etc. For example, Diazepex injections should be stored exclusively in the dark and at a temperature between 2 and 8 degrees Celsius, and not otherwise.
Only after 3 months, thanks to corruption and Bagriy’s connections in the Ministry of Health of Ukraine, Calcex products were cleared through customs and in November 2018, the imported drugs received a quality certificate. The conclusion on the quality of the products was issued by the State Research Laboratory for Quality Control of Medicines of the State Institution «Marzeyev Institute of Public Health of the National Academy of Medical Sciences of Ukraine» (50 Popudrenka St., Kyiv).
However, these drugs do not have standardized samples in Ukraine and there are no import quotas, so the question arises as to how the quality analysis was conducted. Currently, the products have moved to the warehouse of Diatom LLC, but due to violated storage conditions in the customs warehouse, their further supply to pharmacy chains (if the court ban is lifted) will pose a deadly danger to patients who have bought the missing medicines.
Today, Ukrainian producers fully meet the needs of the Ministry of Health for narcotic analgesics. However, Bagriy is not satisfied with this state of affairs, and he is not above outright criminal behavior and intimidates competitors. For example, in July 2018, an attempt was made to assassinate the head of a Kharkiv pharmaceutical company. People like Petro Bahriy will stop at nothing, as his goal is to organize his own shadow drug trafficking in Ukraine.
According to available information, Bagriy is currently discussing with JSC Calcex the possibility of organizing the packaging of their products in Ukraine under a new name, in order to raise the price of drugs and sell them as “domestic”.
Petro Bahriy’s corruption schemes
Today, Bagriy’s enterprises, which can be called “real champions” in embezzlement of budget funds over the past 7-8 years, still top the list of suppliers of medicines to Ukrainians. Pharmaceutical mafioso Bahriy knows how to negotiate with any government.
According to a report by the Anti-Corruption Action Center, by 2014, pharmaceutical oligarchs were making money from patients and the state budget through 4 conventional schemes.
The first scheme involved a «cartel conspiracy» when pharmaceutical market players coordinated their actions at the MoH tenders. Or they made sure that the tender was held between companies that belonged to the same owner — in most cases, it was Petro Bahriy.
In 2013-2014, this scheme alone helped companies clones of oligarch Bahriy win tenders worth over UAH 672 million. The second scheme is the registration of inflated prices for drugs in the Ministry of Health Register. This type of corruption exists only due to the close «cooperation» between the pharmaceutical industry and the Ministry of Health officials, who allow declaring «sky-high» prices for medicines. Thus, this scheme literally legalized the overpricing of medicines procured by the state.
Foreign medicines are imported to Ukraine de jure through several offshore companies, while de facto they are directly supplied to our country by the manufacturer. Accordingly, a number of offshore companies allow pharmaceutical tycoons to inflate the price of medicines several times and even share profits with the authorities, who turn a blind eye to all the fraud.
The third scheme is a simple one: clone companies come to the auction with exactly the same drugs.
Such maneuvers make it virtually impossible to compete, which leads to an inflated price for these drugs.
The fourth scheme of pharmaceutical oligarchs’ actions involves the simple elimination of competitors by the state and the prevention of cheaper drugs from entering the market under the guise of protecting patent rights.
New schemes after the change of power
After the Revolution of Dignity, not only did the pharmaceutical industry in Ukraine fail to “clean up” as everyone had hoped, but new corruption schemes and deals emerged alongside the existing ones.
According to a report by the Anti-Corruption Action Center, the new schemes consist of simply delaying, blocking, canceling and postponing tenders. The purpose of such actions is simple — to give pharmaceutical companies time to register higher prices for their medicines in the Ministry of Health Register, which we discussed earlier. As a result, not only the cost of medicines was unreasonably increased by almost 2 times, but many patients in medical institutions did not receive their vital medicines on time.
As we can see, the “octopus” of medical corruption, headed by tender mafia Petro Bahriy, is equipped with very strong defense mechanisms that help it to thrive in our country under any government. Let’s hope that one day this will come to an end.
As we reported earlier, pharmaceutical oligarchs Petro Bahriy, Filya Zhebrovska and Anatoliy Reder lost a court case against the NGO Patients of Ukraine, which accused drug manufacturers of corruption and distribution of drugs of dubious origin. The litigation between the Association of Pharmaceutical Manufacturers of Ukraine and Patients of Ukraine ended in favor of the latter. This decision was made by the Kyiv Commercial Court.
The specialized judicial body of the capital has issued a decision recognizing that the statement that the Ukrainian pharmaceutical industry and medicine are riddled with corruption does not harm the business reputation of pharmacists. It was this statement by Olga Stefanyshyna, Executive Director of Patients of Ukraine, that led to a lawsuit filed by the Association of Manufacturers of Medicines of Ukraine over the alleged dissemination of false information.
Stefanyshyna said on Era FM radio that Ukrainian drug manufacturers buy certificates for the sale of their products and medicines whose quality has not been confirmed by laboratory tests. Such rhetoric around corruption schemes is not good for the bribe-takers and corrupt officials themselves. Apparently, protecting their “business reputation,” the Association of Manufacturers of Medicines of Ukraine filed a lawsuit because it has something to lose.
The head of this organization is one of the most influential corrupt officials in the Ukrainian pharmaceutical industry, and also the owner of tender companies Ganza, Ukropptpostach, Farmadis, Lumiere Pharma, Sky Pharm, etc. — Petro Bahriy. Thus, the hype around corruption in the industry is not in the interests of Bahriy, who won 95% of the tenders for procurement of medicines for hepatitis patients last year.
However, the eternal “favorite” of all tenders held by the Ministry of Health failed to bribe justice this time. The court of first instance dismissed the claim of the Association of Pharmaceutical Manufacturers of Ukraine. Thus, Bagriy, who is closely connected to Filya Zhebrovska (Farmak) and Anatoliy Reder (Interkhim) through the lobbying association he heads, is forced to retreat by filing an appeal.
It is surprising that specific pharmacists have taken the unaddressed allegation against them personally. As the saying goes, the hat is on the thief. Pharmacists tried to protect the corrupt interests and schemes of mafia leaders, but attracted more public attention to their shady activities. Having diagnosed the pharmaceutical industry in Ukraine, the only thing left to do now is to start treating the infection centers, starting with the registration of medicines and ending with public tenders.
Petro Bahriy: Tender mafia terrorizes the pharmaceutical market of Ukraine
The pharmaceutical industry in Ukraine has always been a sector where huge amounts of money are made. But while some players are trying to make a profit by honestly selling medicines and winning tenders, others are trying to make millions of dollars through fraud and black schemes. The latter include the activities of Petro Bahriy, a well-known pharmaceutical businessman in Ukraine and president of the Association of Pharmaceutical Manufacturers of Ukraine.
Right connections = profitable schemes
Ukrainian pharmaceutical market players are well aware of the personality of businessman Petro Bagriy. However, in business circles, Mr. Bahriy is known as a big fan of tender fraud and corruption schemes, which have helped him make a considerable fortune. Dirty corruption schemes allowed him to make a multimillion-dollar fortune, making him one of the richest people in Ukraine. He perfectly adapts to any power, regardless of changes in the government
The story of the big pharmaceutical fraudster began in 1991, when Petro Bahriy established Ganza LLC. By the end of 1994, Bagriy had identified the main focus of his business: the sale of medicines to Russia. In 1998, Ganza LLC was re-registered as a CJSC, owned by Petro Bahriy and his partner Mykhailo Kuchyrko, often called the brain of their prolific business duo. But the same year, the Russian default put an end to this business. Having lost the Russian market, Ganza began to develop the Ukrainian market. Back then, Bagriy and his partners’ business survived on a successful marketing ploy called “social pharmacies.” Under the advertisement of special pharmacies for poor Ukrainians with medicines at “below market” prices, they sold expired drugs and banal fakes. The “social pharmacies” did not pay much attention to the labels.
For more than 20 years, Bahriy has been purchasing low-quality Indian drugs and importing them to Ukraine at low prices, then selling them under the guise of domestic ones. Ukrainian companies owned by Petro Bagriy, through which he carries out his scams, are involved in this — LLC “BMVP ‘SUCHASNIK’, PVKF ‘SVESA’, Krasnopilsky AGROLISGOSP, ARTANIA, VISIT UKRAINE, APTEKA 97, JAROSLAVIV VAL, APTEKA 127, APTEKA 197, GANZA, EMERGENCE 2004, AFVU, EIDOS CHARITABLE FOUNDATION
One of the most brilliant (and at the same time cynical) scams involving an entrepreneur occurred 10 years ago with a foreign-made flu medicine. At the time, swine flu was raging in Ukraine, and enterprising people made good money on it. Petro Bahriy was one of them. In 2009, the government, through an intermediary company owned by our hero, purchased drugs four times more expensive than the price offered by the manufacturer. As it turned out, the official who made the decision to purchase the drugs had previously worked for Bahriy.
Realizing that he could make money on the Ukrainian pharmaceutical market on a regular basis, the businessman put dark schemes with huge markups on pharmaceuticals on the market. However, he had to go through a difficult path to do this, because during the presidency of Viktor Yanukovych, the main kickbacks in this area were received by the “top officials” of the healthcare sector: the Minister of Health Raisa Bohatyryova and the head of the relevant parliamentary committee Tetiana Bakhteieva.
However, when the ex-president went on the run and representatives of the Party of Regions were slowly “excommunicated” from important government positions, Petro Bahriy’s structures became more active in the market. The businessman’s ability to negotiate with representatives of any political force, regardless of their vector, also helped him. This gave him the opportunity to steal on a large scale on the needs of Ukrainians.
In 2014 alone, firms associated with our hero reportedly earned almost UAH 500 million from public tenders.
Read also: Ex-head of the tender committee of the social policy department of the Kyiv City State Administration is suspected of corruption
Currently, Bagriy’s companies are armed with several shady schemes that help him earn hundreds of millions of hryvnias in the domestic market of medicines. After the 2014 revolution, Petro Bahriy’s team began to use methods of disrupting tender procurement of medicines more often. The goal is to allow a possible winner (i.e., his own company or the company of one of his oligarch partners) to enter higher prices for medicines into the Ministry of Health register in order to make more profit when selling medicines.
According to experts analyzing the ProZorro website, there are signs of a criminal group consisting of companies whose direct or indirect beneficiaries are Bahriy and Kuchyrka. In particular, these legal entities, in collusion with each other, carry out actions that ensure that they sell medicines at inflated prices in public procurement carried out for public funds by medical institutions of Ukraine.
These actions mean that the economic activities of these business entities are coordinated from a single decision-making center, which distorts competition and, as a result, results in inflated prices. There are many signs of such coordination, including the exclusion of other bidders who are not part of their group, the approval of an inflated initial price, a very small (1-2%) reduction during the bidding process, almost simultaneous submission of price offers, etc. At the same time, in rare cases, if competitors participate in the bidding, the price is reduced.
In 2018 alone, these companies won more than UAH 300 million in such “fair” tenders in Ukraine.
It is worth noting that Bagriya companies supply drugs for national programs related to oncology.
Still in the shadows?
With the arrival of the new leadership of the Ministry of Health, Petro Bagriy had to put the schemes he had been working on for years on hold. However, the businessman did not stop his desire to take over the market of medicines, including drug-containing products. Thanks to his connections in the highest government offices, the President of the Association of Drug Manufacturers of Ukraine is trying not only to resume the supply of drugs containing narcotic substances, but also to become a monopolist in the sale of drugs of this group.
But will he succeed in realizing his plans? This is in the hands of the current government, which, at least on the eve of the elections, should think about real steps towards people. These include, among other things, the elimination of shadow schemes in the pharmaceutical market. So that people can buy medicines of the appropriate quality and not pay for them at a premium.
The coronavirus epidemic: on the verge of a major corruption scam
The National Security Council has canceled tenders for the purchase of goods to combat the effects of the coronavirus, and this situation is already very reminiscent of the scandalous purchases of Tamiflu during the Tymoshenko government, Denys Sarbey writes on the DS website.
After President Zelensky signs the relevant decree, the NSDC decision will come into force. In addition, Deputy Health Minister Viktor Lyashko said that until June, the government has imposed restrictions on the export and re-export of personal protective equipment, including medical masks. All of this, given the threat of the coronavirus epidemic, is good and right, but there are two sides to every coin.
Probably not many Ukrainians remember how, in some respects, the situation with the coronavirus was similar to the current situation in 2009 during the swine flu epidemic and how the then government led by Yulia Tymoshenko procured Tamiflu from the flu.
The procurement of Tamiflu, on which the pharmaceutical mafia made a lot of money:
In 2009, after the first deaths from swine flu, panic broke out in Ukraine. The only way to save Ukrainians from mass pestilence was a special antiviral drug called Tamiflu, which the government immediately began purchasing. In early November, the then Prime Minister Yulia Tymoshenko and the then Foreign Minister Petro Poroshenko personally met a plane from Switzerland with the drug at Boryspil airport in the presence of television cameras.
However, this pathetic story of “saving” Ukrainians from a terrible disease ended, as usual, with accusations of abuse and fraud related to the procurement of a life-saving drug.
Tymoshenko’s Cabinet was immediately accused of purchasing the drug from an intermediary company at a price five times higher than it could have bought directly from the manufacturer, the Swiss company Roche. According to the investigative journalists, the cost of the purchased drug was 251 UAH, or 22 euros at the 2009 exchange rate per package, while the official price on the manufacturer’s website was 5-6 euros. Suspicion was also raised by the fact that the medicines were purchased from the company Ganza, owned by Petro Bagriy, who often won tenders from the Ministry of Health.
Directly responsible for the procurement was the director of the Ministry of Health Department, Yuriy Konstantinov, who had previously worked as a director in the company of the aforementioned Bahriy, which added to the suspicion of fraud.
As a result, instead of becoming the “savior of the nation,” and even before the 2010 presidential election, Tymoshenko was caught up in a major corruption scandal that hurt her rating. The Tamiflu story and the not entirely justified panic over the swine flu, which Tymoshenko’s Cabinet was also accused of instigating, played a role in the fact that Viktor Yanukovych, not Tymoshenko, won the election.
Is Petro Bahriy actively “surrounding” Skaletska to preserve his schemes?
Petro Bahriy actively cooperated not only with the Yushchenko/Tymoshenko government. Corruption schemes also flourished during the time of fugitive President Viktor Yanukovych. Back then, money was made in procurement through “friendship” with the minister in charge, Bohatyryova, and the head of the relevant parliamentary committee, Bakhteieva. In those years, firms from Bagriy’s orbit “mastered” enormous sums from the state program to combat HIV/AIDS and tuberculosis, charging taxpayers represented by the state an average price tag for medicines twice as high as the market price.
However, with the change of government, the influence of the pharmaceutical mafia on procurement hardly changes. Under Suprun, dubious firms moved to the regions. However, under the current Cabinet of Ministers, the corrupt octopus may again get into the Ministry of Health.
Yanukovych’s cadres, pharmaceutical market players, and those involved in investigations have been visiting the Ministry of Health during the pandemic. Investigation by the program “Schemes”:
Recently, Prime Minister Oleksiy Honcharuk announced the Cabinet’s plans to spend UAH 72 billion on healthcare for Ukrainians. According to the prime minister, the Program of Medical Guarantees for the population should start working on April 1, 2020, for all types of care: primary, specialized, highly specialized, emergency, palliative, medical rehabilitation and drug reimbursement. The state is going to finance such services through the National Health Service of Ukraine, for which UAH 72 billion has been allocated in the budget.
The initiative is certainly a good one. But will it be possible to implement it without corruption schemes? It is unlikely. Given that the companies of the same Bagriy, created for fraud in the procurement of medicines, continue to operate.
And according to our sources, Petro Bahriy himself is actively “treading the path” to the Cabinet of Ministers. According to our sources, the businessman has been seen in the company of Minister Skaletska and in the company of junior officials of the Ministry.
And if Bagriy does manage to “get a share” of the state money allocated for medical care, the result is very predictable and sad. The lion’s share of the funds will be spent not on the actual purchase of drugs for suffering patients, but on kickbacks and skids.
Conclusion.
Petro Bahriy and his pharmaceutical organized crime group are poisoning the people of Ukraine with low-quality Indian drugs, creating frauds that make these drugs ten times more expensive. That is why people continue to suffer from diseases while Bahriy and his followers line their pockets with multibillion-dollar sums.