Distributors want to change the terms of risk allocation
According to *Ekonomicheskaya Pravda*, in August 2026 the three largest market players proposed supplementary agreements to manufacturers regarding contracts for the supply of medicines. According to the publication, these companies account for around 90 per cent of the Ukrainian pharmaceutical distribution market.
The proposed terms provide for compensation for losses in the event of goods being destroyed or damaged in warehouses as a result of shelling. Possible mechanisms under consideration include writing off the debt for lost products, paying their value, or other options to be agreed between the parties.
Dmytro Babenko, CEO of ‘BaDM’, told ‘Ekonomicheskaya Pravda’ that discussions with partners are still ongoing and that the proposed agreements do not constitute the final version of the contracts.
Under the proposed scheme, the distributor must document the destruction of the products, carry out a stock-take and provide the supplier with supporting documents, photographs or video footage.
The problem for distributors is that they bear the direct risk for goods held in their warehouses. At the same time, deliveries to pharmacies are made on deferred payment terms, which increases the financial burden on the wholesale segment of the market.
Distributors’ losses are mounting due to attacks on warehouses
Pharmaceutical logistics in Ukraine have repeatedly been targeted by Russian attacks. In particular, in 2025, the ‘Optima-Farm’ and ‘BaDM’ warehouse facilities were destroyed. In early August 2026, the ‘Venty’ warehouse complex in the Dnipropetrovsk region was completely destroyed. The company has provisionally estimated the value of the lost stock at over 600 million UAH.
BaDM also reported difficulties with insuring its warehouse infrastructure. According to Dmytro Babenko, in some regions, insurance against such risks is effectively unavailable.
Until now, manufacturers have assisted distributors primarily on a voluntary basis. According to *Ekonomichna Pravda*, in 2025 manufacturers had no legal obligations to provide financial compensation for such losses, and assistance was arranged, in particular, through memoranda of understanding.
Distributors are now proposing a shift from individual voluntary arrangements to a formal risk-sharing mechanism.
Manufacturers are not prepared to bear the losses in full
The pharmaceutical manufacturers surveyed by ‘Economic Truth’ do not agree with the demand for full compensation. They point out that the additional financial burden could prove too great for them.
Another contentious issue is verifying the volume of destroyed stock. Representatives of manufacturers doubt that photographs and video footage alone can serve as sufficient proof of the quantity and value of the destroyed products.
At the same time, market participants acknowledge that the problem affects both sides. Distributors point to rising military risks and limited insurance options, whilst manufacturers highlight their own financial constraints and the risk of a double burden.
This situation is unfolding against the backdrop of broader changes in the Ukrainian pharmaceutical market. In August, the Cabinet of Ministers amended the licensing conditions, simplifying the requirements for the storage of medicines and creating more flexible conditions to ensure the continuity of the pharmaceutical market under martial law. The European Business Association described these changes as an important step towards the resilience of supply chains.
Thus, the dispute over compensation goes beyond the scope of relations between individual companies. In effect, the market is attempting to determine how to allocate military and logistical risks amongst manufacturers, importers and distributors, whilst simultaneously maintaining business stability and ensuring an uninterrupted supply of medicines to pharmacies.
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