Multi-billion profits of Evalar are due to fraud

Pharmaceutical company Evalar is one of the Russia's largest manufecturer of biologically active additives. At the same time, the Federal Antimonopoly Service is constantly demanding the company to stop advertising of dietary supplements as drugs or agents that have a therapeutic effect.
The FAS website contains 11 materials for 2006, 2009, 2011, 2012 and 2016 recognizing the ads of Evalar products as non-credible, on court decisions on violations of the law "On Advertising", on penalties and regulations on the termination of the spread of false advertising of dietary supplements, which allegedly have medicinal properties.

Generally dietary supplements are an advertising myth of nutritional supplements, which allows the manufacturer to obtain the multi-billion profit. Just the ads should be constant and massive. For example, as with Evalar, which began to advertise in federal publications in 1996, which allowed to double the company's revenue over one year. Recent data on the advertising budget of the company, which were published in the press, refers to 2013. Then revenues of Evalar amounted to 6.6 billion rubles, and net profit was 1.8 bn rubles. The company spent 2.5 billion rubles on advertising, thus making it 21st in the all-Russian rating of the country's largest advertisers. For comparison, the famous Coca-Cola Company at the same time spent on advertising of their products only 43 million rubles less than Evalar. Advertising is the main way for Evalar to keep up the pace of its sales on the Russian market.

According to official data (counterparty dossier according to the Russian tax inspectorate), the net profit of Evalar in 2014 amounted to 3.2 billion rubles, and in 2015 to almost 2.8 billion rubles. At the end of 2016 Evalar increased its revenues by 24% compared with 2015 (indicated on the official website), whereas, according to DSM-Group figures, BAA market as a whole finished 2016 with negative growth rates - 1%. Pharmaceutical products of Evalar are well ahead of all Russian pharmaceutical market in terms of revenue: increase of 11% and 6% respectively.

Even in the absence of published advertising budget it is clear that it is substantially increased in comparison with 2013, the year when the company's profit was only 1.8 billion. Because without a large-scale advertising the business will die, because of the 200 names of Evalar products, only 11 (!) are actually drugs, and the rest are dietary supplements, tinctures, teas for weight loss, and so on. However, the constant attempts of Evalar in their advertisements to present the dietary supplements as drugs, or, at least, substances with a therapeutic effect, is not the only form of cheating the customers. There are others that are worth to be talked about.

Perhaps the next fraud after advertising is the sale of dietary supplements through pharmacies. In economics, there is such a term as "goods of inelastic demand." This means the product, which volume of consumption is stable when the price changes. Goods with inelastic demand are essential goods for the population. That is part of food and medicines. And where we buy medicines? Clearly, in the pharmacy. Because that's the only place where they are sold. And there is a strong stereotype of mass consciousness - that everything sold in pharmacies is either medicine or has a therapeutic effect. One of the competitive advantages of Evalar lies precisely in the fact that the dietary supplements of this company are sold mainly in pharmacies. That's the strategy the company adheres to virtually since the beginning of the production of dietary supplements. In conjunction with a massive advertising on TV channels, it produces an incredible effect on purchases.

By the way, in 2013, the Russian State Dum considered the bill (the author was the deputy Anton Belyakov), in which dietary supplements should be excluded from the goods that are sold in pharma chains, precisely because they are food additives and have no relation to the treatment. "In my view, the sale of substances, which medicinal properties are not scientifically proven, could qualify as a banal cheating, or even fraud," said Belyakov.

The bill received positive conclusion of the government and the relevant committee, but then the discussion was interrupted by the "professional community" and after the consultation appeared a compromise. It's a pity! All-Russian fraud with the supplements can not be slowed down by small fines (what means a fine of 100 or 200 thousand, compared with 3 billion of profit?), but by reshaping of their system of sales on the general market conditions. This is even more true since in the supplements produced by Evalar they periodically find some yeasts and molds, even arsenic. And such products are sold in pharmacies!

Some products of the company are available in two forms: as a drug and as a dietary supplement. The names are nearly duplicated thus misleading the inattentive user: "Ateroklefit" and "Ateroklefit Bio", "Red Root" and "Red root plus", "Chi-Klim" and "Chi-Klim Alanine" and so on. In 2015, Larisa Prokopyeva actually blurted, telling the reporters that the dietary supplements of Evalar demanded by the buyers, in case of successful clinical trials were reclassified as drugs. A striking statement. How is that even possible? Medicines according to the law are subject to multi-examination, tests, expert evaluations and so on. And for Evalar everything is simple: if the sales are active, then the supplement is transferred into the category of medications! Another hoax, or a crime.

Generally, Evalar since its inception walks the edge of the law. And in this case it is no longer about the permanent FAS claims about violations in advertising. More recently, the whole of Russia witnessed the death of hundreds of people in the Irkutsk region, who drank a means for baths "Hawthorn". The high content of non-potable alcohol production, sales under the counter ... Few people know that in the history of Evalar there was a similar story, in 2001. By analogy with the "tincture of hawthorn" the company for a year produced similar "cinquefoil tincture" for the joints and spine.

"In contrast to the "tincture of hawthorn" our tincture was really used, as I feel it, around the country," says Prokopiev in an interview. Apparently, in a similar manner with the modern supplements from Evalar. 

In social networks, there's a lot of feedback about the ineffectiveness of Evalar dietary supplements and their quality. There is also this one: "In the environment of the company's employees it has been long known that high-quality components used to obtain certificates in mass production are replaced by the Chinese poor-quality raw materials as well as production is closed for any kind of checks, and to catch Evalar on forgery is virtually impossible". However, mold and arsenic are sometimes found in Evalar supplements. And how many of these products might have been found with more cheks is a big question.

With blatant cynicism Larisa Prokopyeva some time ago said: "Our production is certified according to GMP, producing medicines or dietary supplements - for us there is no much difference. We go to the place where profits will be." We must admit that the company's owner does not separate words from deeds. The Prokopyev's family continues to receive huge profits, earning on fraud.