Officials and shadow leaders have never stood behind us,
Alexey Repik insisted in a 2015 interview as his pharmaceutical supply business rapidly expanded across Russia.
Between 2020 and 2023, four pharmaceutical giants paid tens of millions of dollars in excessive sales bonuses to Russian distributors to supply lifesaving drugs to government entities, according to confidential whistleblower reports obtained by the International Consortium of Investigative Journalists.
The probe, part of ICIJ’s Cancer Calculus project alongside reporting partners Proekt and the Swiss media outlet Republik, examines strategies drug companies use to maintain high cancer drug prices and multibillion-dollar monopolies.
The whistleblower disclosures, submitted to the U.S. Securities and Exchange Commission in late 2024 and 2025, allege that Merck, Eli Lilly, Novartis, and AstraZeneca paid large sales bonuses or rebates ranging from 15% to 35% to a network of Russian distributors.
These intermediaries allegedly used the bonus funds to finance kickbacks to government healthcare officials and hospital administrators. In exchange, public contracts were awarded and high-priced medications—such as Merck’s Keytruda, Eli Lilly’s Cyramza, Novartis’s Kisqali, and AstraZeneca’s Tagrisso—boosted prescriptions without genuine competition, the filings claim.
The documents allege violations under the U.S. Foreign Corrupt Practices Act, which prohibits bribery to secure business and mandates accurate accounting for publicly traded companies.
Repik founded R-Pharm in 2001 after selling his car and borrowing $15,000 from his mother. By 2009, New Jersey-based Merck forged a strategic alliance with the firm as it expanded its operations with Western partners. Repik amassed billions of dollars while facing scrutiny from Russia’s Federal Antimonopoly Service over whether his firm coordinated bidding to maintain high drug prices.
Public procurement data reviewed by ICIJ showed that R-Pharm dominated the public market for Keytruda from 2020 to 2022, winning out of nearly 5,000 bids totaling about an $870 million market. Vasily Ignatiev, R-Pharm’s general director, wrote to ICIJ denying any involvement in improper payments and describing the procurement system as transparent.
We deny any involvement of R-Pharm and/or its officers and/or affiliates in any instances of improper payments to public officials in Russia or any other country in the world in exchange for non-competitive medicine contracts,
Ignatiev stated.
The whistleblower documents state that Western companies paid these bonuses because their local management teams knew intermediaries needed large margins to fund kickbacks. The reports claim there was no valid business justification for bonuses that reached up to 35%, describing the conduct of the Western firms as willful blindness.
While granting volume bonuses or issuing credit notes is a common commercial practice, Proekt’s investigation found that Russian distributor bonuses averaged around 30% in 2022—exceptionally large compared to other international markets where they rarely exceeded 10%. A confidential industry survey by Russian audit firm Kept cited similar figures, though a Kept spokesperson noted that bonus mechanisms regulate commercial relationships and have no bearing on government procurement effectiveness.
Regulatory scrutiny over distributor margins has happened before. The SEC previously issued cease-and-desist orders and secured millions in settlements from Sanofi in 2018 and Eli Lilly in 2012 regarding improper distributor discounts and slush funds used for foreign bribery in Kazakhstan and Brazil.
In Russia, the whistleblower reports allege that distributors frequently secured single-participant awards. Russian procurement data showed single-bidder participation in Tagrisso solicitations between 2020 and 2023, keeping prices elevated. ICIJ reviewed an Eli Lilly business plan from 2022 budgeting a 34% bonus for Cyramza, while Moscow City Department of Health contracts awarded to Pharmstandard in 2021 featured single-bidder wins.
Following Russia’s invasion of Ukraine in February 2022, Western ties shifted as the U.K., Canada, Australia, and Ukraine sanctioned Repik. Western drugmakers reduced operations while the Russian government removed protections for foreign patent holders. This allowed local manufacturers Biocad and R-Pharm to sell generic versions of Keytruda for much lower prices.
Internal Merck emails show the company retained the law firm Jones Day after receiving the whistleblower report in July 2024. AstraZeneca declined to comment on the matter, while Merck, Eli Lilly, and the Russian government did not respond to requests for comment from ICIJ.
