Warehouses are full, lines are long: what does the shutdown of Darnitsa mean for the Ukrainian pharmaceutical market?
17 September 2025 21:12
Darnitsa Pharmaceutical Company is going through the most difficult period in recent decades. In 2025, the company recorded a sharp decline in sales – by 50% compared to the previous year. The situation has led to forced shutdowns of production lines, staff reductions, and a serious financial burden on the business, "Komersant Ukrainian" reports, citing Ekonomichna Pravda.
The main reason for the downtime is the lack of sales. The company’s warehouses, designed for about 10,000 pallets, are currently 95% full. This means that the company is virtually unable to produce new products without the risk of exceeding its storage capacity. As a result, production was shut down twice. The total downtime was nine weeks.
In the pharmaceutical industry, a production shutdown is considered a critical scenario, as even a short-term downtime leads to disruptions in the supply of medicines to the market and can affect the availability of products to patients.
Staff reductions and salary cuts
Sales problems forced the company to take unpopular steps. The company laid off 1,068 employees, which is about 11% of the workforce. For the remaining employees who stayed at work during the downtime, their salaries were reduced to two-thirds of the usual.
According to the company, even with the shutdown, about 70% of expenses remain unchanged. These include utility bills, equipment maintenance, security, depreciation, and other fixed costs that cannot be optimized quickly.
Shock for the market: the position of the management
Kateryna Zagoriy, a member of the Board of Directors of Darnitsa, recently commented on the situation, emphasizing the unprecedented nature of the crisis.
“The last time we stopped working not because of maintenance was back in 1998. What is happening now is a shock for the entire pharmaceutical market,” she said.
“This statement demonstrates the scale of the problem, as Darnitsa is one of the largest pharmaceutical manufacturers in Ukraine and traditionally meets a significant part of the domestic demand for medicines.
On March 1, 2025, the Cabinet of Ministers banned marketing payments and limited the margins: for pharmacies – up to 35%, for distributors – up to 8%. After that, the chains began to withdraw Darnitsa’s products from the assortment, including the sale of Citramon.
“Darnitsa stopped production due to the conflict with the leading pharmaceutical retailers: what preceded it
In April 2025, according to Forbes Ukraine, the sales of the pharmaceutical company “Darnitsa” decreased by 2.7 million packs (-29.1%) and UAH 90.8 million (-14.1%) compared to April 2024. The average presence of the drugs in pharmacy chains decreased from 49% to 36%, and in the top five – from 60% to 42%.
Sales of Citramon, the company’s popular product, suffered the most. “Some chains, such as Apteka Dobroho Dnia, have completely stopped selling it,” said Andriy Obrizan, CEO of the company, at the time.
At that time, Darnitsa attributed the drop in sales to the boycott by pharmacies after the initiative to ban marketing payments.
According to the pharmaceutical company, up to 25% of the cost of packaging was made up of bonuses to pharmacies, and the amount of such payments in 2024 reached UAH 1.4 billion. Kateryna Zagoriy, a member of the company’s Board of Directors, even raised this issue at a meeting of the business with the President of Ukraine Volodymyr Zelenskyy in December 2024.
Darnitsa’s problems and their consequences for the pharmaceutical market
Analysts note that the situation at the enterprise may have long-term consequences for the entire industry. Stopping the production of a major player could potentially lead to a shortage of certain drugs on the market and an increase in their cost. In addition, the reduction of staff at such an enterprise means fewer jobs in a sector that is already under pressure from military and economic challenges.
The problem of Darnitsa also signals general trends in the economy: a decline in the purchasing power of the population, a slowdown in consumption and difficulties with exports. Experts believe that the situation may be repeated at other enterprises if demand does not start to recover.
What is in the future
According to media reports, Darnitsa is preparing an appeal to the AMCU, accusing pharmacies of blocking sales. The company claims unfair competition from the largest pharmacy chains. Darnitsa claims to have videos from pharmacies where customers were told that the lack of drugs was allegedly due to the “bankruptcy” of the manufacturer.
The Ministry of Health is skeptical of the company’s position. And the Government is of the opinion that “Darnitsa shot itself in the foot by starting a conflict with the chains after the ban on marketing payments.”
The company itself has not yet reported any new production stoppages, but admits that the continuation of the trend may force management to make even tougher decisions. In particular, they are talking about the possibility of revising the business model, reorienting to export markets and finding new sales channels.
Economists emphasize that support for pharmaceutical manufacturers during this period is critical to maintaining stability in the drug market. Potential measures could include government procurement incentive programs, soft loans or tax preferences.
The situation at “Darnitsa” has become a vivid indicator of the challenges facing Ukrainian business in 2025. Falling sales, production stoppages and staff reductions demonstrate that the pharmaceutical industry is no exception and also needs systemic solutions. Not only the fate of the company, but also the stability of the supply of medicines to millions of Ukrainians will depend on how quickly the company and the state find a way out of the crisis.
Darnitsa Pharmaceutical Company: what you need to know about it
The Pharmaceutical Company “Darnitsa” is one of the largest manufacturers of medicinal products in Ukraine, which has been operating on the market for over 90 years. Founded in 1930 as the Kyiv Chemical and Pharmaceutical Factory, the company has grown from a small enterprise to a modern pharmaceutical plant that meets international GMP standards.
Darnitsa’s product range includes more than 250 names of drugs – from painkillers and cardiological products to antibiotics and infusion solutions. The company traditionally holds the leading positions in terms of production and sales volumes in the Ukrainian market, ensuring the availability of medicines for millions of patients.
In recent years, Darnitsa has been actively investing in the modernization of production lines, digitalization of processes and development of R&D areas, cooperating with international partners and seeking to expand exports to the EU, Asia and the Middle East.
However, amid economic challenges and a drop in consumer activity, the company faced a significant decline in sales, which in 2025 led to the forced shutdown of production lines and staff reductions. Despite the difficulties, the pharmaceutical company declares its intention to maintain production in Ukraine and continue to invest in development.
It is worth noting that in 2024, business media reported that Volodymyr Zagoriy, together with his son, former MP Hlib Zagoriy, owned the pharmaceutical company Darnitsa, whose informal beneficiaries included Borys Lozhkin, and whose governing board was headed by former Deputy Head of the Presidential Administration Dmytro Shymkiv.
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