Marketing costs passed on to patients in Ukrainian drug pricing – Expert

In 2024, a single Ukrainian pharmaceutical company spent UAH 1.7 billion on marketing contracts, a cost that ultimately drives up the price of medicine for consumers.

Head of CO 100% Life’s Coordination Council, Dmytro Sherembei, underscored this during a briefing at Media Center Ukraine.

“One company spent 1 billion 700 million hryvnias on marketing contracts in 2024. And this is just one Ukrainian manufacturer. Naturally, they factored this spending into the cost of each package. That means we, the consumers, the viewers, and the readers of this report ended up paying for it,” Sherembei said.

He also highlighted that, in 2023, the total amount of capital withdrawn from Ukraine by pharmacy chains exceeded UAH 25 billion.

According to Sherembei, the retail price of a medication package can be three times higher than its actual production cost.

“A package that costs 120 hryvnias to produce at the factory may end up being sold for 360 hryvnias at a pharmacy. That’s completely unreasonable, it defies logic,” he said.

Dmytro Sherembei also pointed to a stark contrast between the investments made by drug manufacturers and the relatively minimal overhead of pharmacy chains.

“The manufacturer maintains the plant, manages logistics, and operates an entire research facility – that’s a large infrastructure. After all this, the product leaves the plant costing 100 hryvnias. The distributor hands it off to a pharmacy, and suddenly it’s 300 hryvnias. But a pharmacy chain is just rented space, a shelf, and a refrigerator. There’s nothing in that setup to justify such a markup,” he said.

He warned that this pricing model creates a system that is financially unjust to patients.

“This whole marketing setup is a distorted, legalized form of corruption that ultimately profits from the sick. It’s a primitive mechanism for extracting money from our pockets through marketing cycles,” Sherembei concluded.

Read more: https://mediacenter.org.ua/news