As the COVID‑19 vaccination rolls out around the world, Ukraine still hasn’t seen a single shot.
Bureaucracy, political infighting, and suspected corruption have delayed Ukraine’s coronavirus immunization campaign.
As the result, some 40 percent of Ukrainians who are willing to get vaccinated will not be able to get the shot soon. The government’s plan to vaccinate half the population may stretch into 2022.
Furthermore, a new criminal investigation into the COVID‑19 vaccines contract may stall the procurement even more.
The secrecy that pharmaceutical companies impose on vaccine contracts fosters corruption, which is especially rife in Ukraine’s medical procurement bureaucracy.
Critics point fingers at Health Minister Maksym Stepanov for failing to procure the vaccines swiftly. An official investigation is looking to see whether he rigged the procurement process in favor of a Ukrainian intermediary.
Stepanov is defiant. During an interview with the Kyiv Post on Feb. 11, he claimed that the government is doing everything it can to start vaccination.
But the promised date of the start of vaccination, Feb. 15, has come and gone.
Read also: Everything to know about COVID vaccination in Ukraine (EXPLAINER)
A majority of Ukrainian lawmakers said they were willing to give Stepanov until the end of February to launch vaccination. Then, they would support replacing him.
But the problems with vaccine procurement are bigger than one person.
Left behind or dragging?
While Ukraine, a nation with 1.3 million COVID cases, is still waiting for the first batch of the coronavirus vaccines, more than 188 million doses have been injected around the world as of February, the World Health Organization reports.
Top vaccine producers such as Pfizer, AstraZeneca, the Serum Institute of India, Sinovac Biotech, and others are struggling to cover the tremendous global demand for COVID‑19 immunization.
The European Union, U.S., U.K., and others have started preparing to buy vaccine in the summer, allocating funds and often paying for doses in advance.
Ukraine, the ninth country in Europe by number of COVID‑19 cases, has lagged far behind.
The Ukrainian government has allocated Hr 4 billion ($142 million) for vaccines and created the COVID‑19 immunization strategy to vaccinate 21 million Ukrainians — people in risk groups and essential workers.
That may seem like a lot, but it’s not. Germany spent $812 million just to finance the development of COVID vaccines in the summer. The EU set aside 2.7 billion euros to buy the vaccines on behalf of member states. Some member states order additional doses on their own.
Read also: Government rolls out COVID-19 vaccination schedule for 2021
Ukraine’s neighbor Poland, which has a comparable population, announced that it ordered 60 million doses from six producers in December.
In the same month, Ukraine also signed its first vaccine contract, ordering just 1.9 million doses of CoronaVac, the Chinese vaccine produced by Sinovac Biotech.
For more than a month, that deal remained Ukraine’s only vaccine contract. And even it proved dubious.
Instead of buying directly, the government made the deal through a Ukrainian intermediary, a pharmaceutical company Lekhim.
The National Anti-Corruption Bureau (NABU) has launched an investigation into the contract, and specifically into Stepanov’s alleged lobbying of Lekhim that could have led to Ukraine buying the vaccine at an inflated price.
Stepanov denies all accusations and calls the case against him a political vendetta. These allegations shake the trust of vaccine producers in Ukraine, he added.
Talks with big pharma
The Ukrainian government found it hard to reach deals with vaccine producers. The authorities said they have been “almost begging” biotech giants to sell the vaccine to Ukraine.
In December, Ukraine got confirmation that it will receive 8 million free doses of Pfizer vaccine from COVAX, the global initiative to ensure rapid access to the coronavirus vaccines. Ukraine’s government presented it as a big win.
Another win came in early February, when Ukraine signed its second vaccine contract — for 12 million doses — with the Serum Institute of India. It produces AstraZeneca and Novavax vaccines under a license.
But none of these have been delivered to Ukraine yet.
Stepanov’s critics say it’s because the government was dragging its feet.
“While other countries were conducting parallel negotiations and signed contracts with several vaccine producers at once, Stepanov did everything to stall the process,” Oleksandra Ustinova, Holos Party lawmaker and anti-corruption watchdog told the Kyiv Post.
Stepanov denies it. He says that the government started negotiations with vaccine producers back in May but often was ignored.
There is no way to check whether that’s true. In the months that led up to Ukraine’s first vaccine contract in December, the government never said anything more specific than “the negotiations are ongoing.”
“From the very beginning I said that Ukraine would start COVID‑19 immunization in March or February if we are lucky,” Stepanov told the Kyiv Post.
In some cases, Ukrainian officials had to interfere and ask for help from their foreign colleagues from the countries of vaccine producers, Stepanov said.
“The demand for the vaccines in the world is so high we almost have to beg companies to sell them to us. We are not an interesting market for them,” the minister added.
But it’s not just poverty or high competition that made vaccine procurement problematic.
Another reason was infighting in the ministry.
Stepanov’s transparency
One of the reasons why the COVID‑19 vaccination has not yet started in Ukraine is a conflict between Stepanov and a state enterprise called Medical Procurement of Ukraine (Medzakupivli).
Medical Procurement is a subsidiary of the Health Ministry, responsible for many categories of state health care procurement.
For a year, Stepanov has been trying to sideline the enterprise from doing its job and take personal control of it, Ustinova said.
Stepanov blames the enterprise for inefficiency, saying it has failed to buy crucially important medicines.
Ustinova, and other critics of Stepanov, suspect that some corrupt interests are behind Stepanov’s wish to control the procurement.
“(He’d like it to be) just like in the old times of Viktor Yanukovych’s Health Minister Raisa Bohatyryova. During her rule, all tender results were decided before the start of a tender,” the lawmaker added.
Bohatyryova’s tenure in the health ministry was extremely corrupt, with medicines procured at inflated prices, and the minister’s family members pocketing commissions.
Stepanov calls the accusations baseless.
“I can’t have a conflict with my subordinates. I have only one demand to my subordinates — to do their job effectively. They are supposed to buy those medicines the ministry’s experts ask them to buy,” Stepanov said, saying they have been failing to do so on time.
The Medical Procurement called Stepanov’s accusations a manipulation. It said the Health Ministry has been failing to send documents it needed to start the procurement on time.
“The ministry does not want to bear responsibility for inaction,” the statement reads.
Medical Procurement had to start buying medical supplies for 2020–2021 in March. However, the first Health Ministry orders came in June and September. The same delays hit COVID vaccine procurement.
According to Health Ministry’s website, the COVID‑19 vaccine procurement commission was only created in November.
On Dec. 10, the ministry officially ordered the Medical Procurement to start drafting contracts with vaccine producers.
Corruption, again?
Ukraine’s first vaccine contract turned into a scandal.
Normally, producers sign vaccine agreements directly with governments.
However, the Health Ministry chose private Ukrainian pharmaceutical company Lekhim to be an intermediary, which would purchase 1.9 million doses of CoronaVac vaccine by Sinovac. Lekhim first announced that it was negotiating a distribution contract with Sinovac in June.
On Dec. 30, the Ministry paid $34 million to Lekhim, or nearly $18 per dose.
However, it is unknown how much the company will pay Sinovac per dose, and how much it is pocketing. Even Stepanov claimed that he didn’t know the price Lekhim was paying to Sinovac.
“How can I know?” Stepanov said. “I only hope the price is the same (the government is paying).”
The Kyiv Post reached out to Sinovac but got no response.
Stepanov said that at first, the Ukrainian government wanted to buy the vaccines directly from Sinovac. However, Sinovac preferred to sell them through Lekhim, its exclusive distributor in Ukraine.
“I repeat, Lekhim was not a favorite of Health Ministry. It was Sinovac’s condition,” Stepanov said.
This claim is impossible to verify: Neither Sinovac nor Lekhim talk to the press.
Later during the interview, Stepanov said that not a single private company has been conducting negotiations on COVID‑19 vaccine purchase with the producers, as they communicate only with the governments.
“Only Chinese producers decided to do that,” Stepanov rushed to add.
Lekhim refused to comment on the contract and has never revealed its pricing scheme
Investigation
However, on Feb. 12 the NABU launched a probe into the Lekhim contract, suspecting the Minister of buying the Chinese vaccine, which is not yet registered in Ukraine, at an inflated price.
The case started from a complaint by Arsen Zhumaldinov, the Medical Procurement’s director-general. In it, he claimed that Stepanov has illegally interfered in procurement.
The Kyiv Post obtained a copy of Zhumaldinov’s complaint to NABU. According to it, on Dec. 21 Stepanov gave an illegal order to run the potential contractors by him. Soon, Medical Procurement sent two potential contractors to the ministry for approval.
One of the contractors was Lekhim. According to Ustinova, the other contractor was the Serum Institute of India.
Lekhim’s price per dose was $1 higher than Serum’s.
Although the Medical Procurement was handling the contract, Stepanov personally met with Lekhim representatives to agree on the terms of cooperation on Dec. 29, according to the claim.
After that, the minister chose Lekhim, despite its higher prices. The deal was signed the next day.
Because Ukraine ordered 1.9 million doses, Stepanov’s interference inflated the final deal price by $1.9 million, according to the complaint.
Stepanov denied all the accusations, but had not provided clear explanations for his actions.
He said he didn’t know the details of the contract with Lekhim, because it was signed by Medical Procurement.
The government signed its second vaccine contract in February, this time with the Serum Institute.
Corporate secrets
Stepanov’s deal has another problem: utter secrecy.
Unsatisfied with the Medical Procurement performance, Stepanov turned to the foreign private firms that maintain a transparent reputation but keep the details of their deals secret.
The minister hired Crown Agents, an international non-profit company that helps speed up medicines delivery to developing countries.
It was Crown Agents, that signed the contract with Serum Institute on behalf of Ukraine. The company will buy and deliver the vaccines to Ukraine and will be reimbursed for all operational expenses only after it fulfills the agreement, according to Crown Agents’ press release. Crown Agents refused to give further comments.
Stepanov said that corporate secrecy is normal global practice.
All the COVID‑19 vaccine negotiations are extremely competitive and the companies involved prefer to keep them secret.
A source at Pfizer Ukraine who wasn’t authorized to speak to the press confirmed to the Kyiv Post that COVID vaccine contracts are normally secretive. The companies don’t even reveal the dates when one or another country started the negotiations. The companies’ capacities have been struggling to satisfy the high demand on a tight schedule.
“So we must not let any political speculations influence the process,” the source told the Kyiv Post.
However, details of the negotiations leak from time to time.
In December, Eva De Bleeker, budget secretary of Belgium, posted the vaccine prices that the EU has agreed to pay. She deleted her tweet, but screenshots remain. According to Bleeker, the EU prices for a dose start from $2 for AstraZeneca, $8.5 for Johnson and Johnson, $14 for Pfizer and $18 for Moderna. UNICEF reported the vaccine prices to range from $2.19 to $40 per dose.
At the same time, Brazil’s city of Sao Paulo signed a $90 million contract to receive 46 million doses of a potential Sinovac Biotech Ltd vaccine — the same one that Ukraine bought.
This means Brazilians paid some $1.96 for a dose of vaccine that Ukraine purchased for $18.
Stepanov says there are no vaccines that cheap on the market.
Without naming the producers, Stepanov said that for Ukraine, prices for COVID‑19 vaccines range from $7 — $33.9 per dose.
“The Ministry has no secrets,” Stepanov said. “However, we are tied by the corporate secrecy of the producers.”
Editor’s Note: This report is part of the Investigative Hub project, within which the Kyiv Post monitors investigative reports in the Ukrainian media and brings them to the English-speaking audience, as well as produces original investigative stories. The project is supported by the National Endowment for Democracy.
