Four major Western pharmaceutical companies paid tens of millions of dollars in unusually high bonuses to Russian middlemen to supply cancer drugs to state hospitals,according to whistleblower documents submitted to U.S. financial regulators.
The payments by Merck, Eli Lilly, Novartis and AstraZeneca allegedly helped fund a corruption scheme that kept drug prices high and limited competition across Russia’s public healthcare system.
The pharmaceutical companies were alleged to have provided “excessive” sales bonuses and rebates ranging from 15% to 35% to Russian distributors, with the international average rarely exceeding 10%.
The whistleblower report and other details were laid out in a joint investigation published Monday by the International Consortium of Investigative Journalists (ICIJ), the exiled Russian news outlet Proekt and the Swiss publication Republik.
According to the report, Merck’s Russian distributor R-Pharma won $360 million in state contracts for the cancer drug Keytruda, winning 2,400 out of nearly 5,000 bids between 2020 and 2022. Procurement data reportedly showed 96% of the bids had no competitors, allowing sanctioned oligarch Alexei Repik’s R-Pharm to maintain a virtual monopoly on Keytruda supplies to state hospitals.
R-Pharm CEO Vasily Ignatyev denied “any involvement” in improper payments or non-competitive practices, telling ICIJ that its commercial rebates were legitimate and defending Russia’s state auction procedures as transparent.
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