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#InsulinFraud unfolds in Moldova - Ukrainian #Farmak company allegedly involved

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In July 2019, the National Anti-corruption Centre in Moldova instituted criminal proceedings in connection with public procurement of Strim insulin. The issue is the products manufactured by Farmak SAP, one of the largest Ukrainian pharmaceutical companies, the Talk Finance reports

According to Angela Starinschi, the press secretary of the anti-corruption authority, the centre is conducting the investigation in connection with “organization of the public bidding procedures for procurement of medicinal products for those suffering from diabetes”. She has stated that several people have been interrogated, and the documents have been seized with regard to this case. The main suspect named by the Moldovan press is Ivan Antoci, the director of the Centre for Centralized Public Procurement for Health Care. Antoci was dismissed on 26 July.

According to the bidding documents, 20 thousand doses of Strim bio insulin manufactured by Farmak SAP were supplied to Moldova from Ukraine by EsculapFarm.

However, this product does not exist in Ukraine under the given name, and it has not been registered by the European Medicines Agency (EMA). It has been found out that Strim is manufactured in India. According to the investigators, there is no credible evidence of its safety.

In 2017, more than 104 thousand patients suffering from diabetes were registered in Moldova. In autumn 2018, it was resolved to import almost 414 thousand doses of the Ukrainian product following the public bidding procedures.

According to the Moldovan Sanatateinfo.md newspaper, the insulin procurement bidding procedures were non-transparent: the time frames, terms and conditions were changed several times. Moreover, the amount the government was ready to spend for the new insulin was considerably increased: 100 million leus instead of 21.6m leus.

After the investigation had started, State Secretary of the Ministry of Health Boris Gylka claimed that he had been blackmailed to sign the order on procurement of Strim insulin. “The insulin was registered very quickly, which was suspicious. This product has not been studied, there is no data on its effect on the organism, and I cannot understand how it was allowed to take part in the bidding procedures,” he said. Gylka also claimed that several people having their own interest had also been involved.

“It was done during the election campaign when Silvia Radu (Minister of Health of Moldova until June 2019) was de facto released from her office. I had doubted a lot, for about two weeks, before I signed the order. There was a lot of pressure and even threats, including the threat of dismissal,” Gylka admits.

Application of Strim requires an additional injection device. According to Boris Gylka, such devices have not been used in the EU countries for more than five years. Moldova has also refused from application of an additional cartridge for the patients’ convenience. That is why the change of the terms and conditions of the bidding procedures following the registration of Strim that was made on the day when the document was signed looked suspicious. The public official claims that this product is used in Ukraine in 3-4 percent of cases for the people held in prison. In Moldova, the end consumers hardly used the product due to lack of trust in the product.

At the end of July, the Moldovan Committee for Medicinal Products denied registration of the product since it was not known for sure what side effects that product could entail for the people suffering from diabetes. The Ministry of Health and the law enforcement authorities of Moldova suppose it is large- scale fraud.

What is Strim? It is an insulin biosimilar, i.e. the medicinal product of biological origin containing a copy of the original active ingredient. The pharmaceutical product Insulin glargine manufactured by Biocon Limited (India) was registered with the State Register of Medicinal Products of Ukraine in 2017. The marketing authorisation is held by the Ukrainian company Farmak. The same product was registered in Moldova with the commercial name 'Strim'.

The marketing authorisation is also held by Farmak. Why did the Moldovan Committee for Medicinal Products deny registration of the product? According to the instructions given by the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA), clinical efficacy and side effects of biosimilars shall be studied in accordance with the specific procedure. In fact, the main task of the manufacturer is to prove that the product has sufficiently similar efficacy and safety as well as quality.

While transferring the technology and registering the products before the issue of the marketing authorisation in Moldova, the manufacturer failed to furnish the sufficient evidence of the efficacy and safety of the biosimilar in the registration dossier and used the research materials of the Indian manufacturer without its own research.

The Moldovan journalists suppose that the Indian company Biocon Limited might even be unaware of the fact that their product has caused the multi- million insulin scandal in Moldova far away. It has been supplied to the Moldovan market owing to the close corruption ties of the Ukrainian company Farmak SAP with the Moldovan public officials responsible for supplies of pharmaceutical products into the country.

In Ukraine, Farmak SAP is considered to be one of the pharmaceutical giants. The company is owned by Filia Zhebrivska, who is permanently on the list of the richest people of Ukraine.

According to Deutsche Welle, the Zhebrivski family had business transparency issues in Germany in 2018. The German company pertaining to the pharmaceutical empire of the Zhebrivski had not filed the names of its beneficiary owners into the Transparency Register, which was violation of the anti-tax evasion and money laundering laws.

Cyber-espionage

EU countries test their ability to co-operate in the event of cyber attacks

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EU member states, the EU Agency for Cybersecurity (ENISA) and the European Commission have met to test and assess their co-operation capabilities and resilience in the event of a cybersecurity crisis. The exercise, organized by the Netherlands with the support of ENISA, is a key milestone towards the completion of  relevant operating procedures. The latter are developed in the framework of the NIS Co-operation Group, under the leadership of France and Italy, and aim for more coordinated information sharing and incident response among EU cybersecurity authorities.

Furthermore, member states, with the support of ENISA, launched today the Cyber Crisis Liaison Organization Network (CyCLONe) aimed at facilitating cooperation in case of disruptive cyber incidents.

Internal Market Commissioner Thierry Breton said: “The new Cyber Crisis Liaison Organization Network indicates once again an excellent cooperation between the member states and the EU institutions in ensuring that our networks and critical systems are cyber secure. Cybersecurity is a shared responsibility and we should work collectively in preparing and implementing rapid emergency response plans, for example in case of a large-scale cyber incident or crisis.”

ENISA Executive Director Juhan Lepassaar added: "Cyber crises have no borders. The EU Agency for Cybersecurity is committed to support the Union in its response to cyber incidents. It is important that the national cybersecurity agencies come together to coordinate decision-making at all levels. The CyCLONe group addresses this missing link.”

The CyCLONe Network will ensure that information flows more efficiently among different cybersecurity structures in the member states and will allow to better coordinate national response strategies and impact assessments. Moreover, the exercise organized follows up on the Commission's recommendation on a Coordinated Response to Large Scale Cybersecurity Incidents and Crises (Blueprint) that was adopted in 2017.

More information is available in this ENISA press release. More information on the EU cybersecurity strategy can be found in these Q&A and this brochure.

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coronavirus

 Commission approves €32 million Polish aid scheme to compensate airports for damage suffered due to coronavirus outbreak

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The European Commission has approved, under EU State aid rules, a PLN 142 million (approximately €32m) Polish aid scheme to compensate airports for the damage suffered due to the coronavirus outbreak. In order to limit the spread of the coronavirus, on 15 March 2020, Poland banned all international and domestic air passenger services at Polish airports. The flight restrictions were progressively lifted as of 1 June 2020, but certain travel warnings, travel bans and restrictive measures remained in place until the end of June 2020.

This resulted in high operating losses for the operators of Polish airports. Under the scheme, the Polish authorities will be able to compensate airports for the revenue losses suffered during the period between 15 March and 30 June 2020, as a result of the restrictive measures on international and domestic air passenger services implemented by Poland. The support will take the form of direct grants.

The scheme includes a claw-back mechanism, whereby any possible public support in excess of the actual damage received by the beneficiaries will have to be paid back to the Polish State. The risk of the state aid exceeding the damage is therefore excluded. The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union, which enables the Commission to approve state aid measures granted by member states to compensate specific companies or specific sectors (in the form of schemes) for the damage directly caused by restrictive measures taken in exceptional occurrences, such as the coronavirus outbreak.

The Commission found that the  scheme notified by Poland will provide compensation for damage that is directly linked to the coronavirus outbreak. It also found that the measure is proportionate, as the compensation does not exceed what is necessary to make good the damage. On this basis, the Commission concluded that the aid is in line with EU state aid rules. More information will be available on the Commission's competition website, in the public case register under the case number SA.58212 once confidentiality issues have been resolved.

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Belgium

Commission approves €2.2 million Belgian aid measures to support Flemish airports in the context of the coronavirus outbreak

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The European Commission has approved €2.2 million Belgian aid measures to support the operators of Flemish airports (Antwerp airport, Ostend airport and Kortrijk airport) in the context of the coronavirus outbreak. The measures were approved under the state aid Temporary Framework. The measures consist in: (i) an aid scheme, under which all Flemish airport operators will receive support in the form of a direct grant; and (ii) support to the operators of Antwerp and Ostend airports in the form of payment deferrals of certain costs and fees (namely annual compensation for the use of statutory staff of the Flemish Region and concession fee for the use of the airport infrastructure due for the year 2020).

The purpose of the aid measures is to help Flemish airport operators mitigating the liquidity shortages that they have been facing due to the coronavirus outbreak. The Commission found the measures to be in line with the conditions set out in the Temporary Framework. In particular, (i) the measures can only be granted until the end of this year; (ii) the direct grants do not exceed €800,000 per company, as provided by the Temporary Framework; and (iii) the payment deferrals will be granted by 31 December 2020, and will be due by no later than 31 December 2021 and involve minimum remuneration, in line with the Temporary Framework.

The Commission therefore concluded that the measures are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the measures under EU state aid rules. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here.

The non-confidential version of the decision will be made available under the case number SA.58299 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved.

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