‘Emergency’ sole sourcing: Georgetown Hospital could have saved over $300M

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Two local companies are confident they could have supplied “emergency drugs” to the Georgetown Public Hospital Corporation for less than half of the total $606 million paid to Trinidadian firm ANSA McAL.

After analysing the quotation involved in that transaction, the companies have said the Georgetown Hospital could have saved more than $300 million on this transaction alone, and there would have been added benefits to the economy from having some of the products manufactured right here in Guyana.hospital

One local supplier also questioned how is it that ANSA McAL knew there was a shortage of these specific drugs, to be able to bring them in. Further, the supplier emphasised that ANSA McAL does not stock those specific drugs.

Management of the Georgetown Hospital has been accused of deliberating creating an emergency situation in order to sole source drugs from its preferred supplier. It has cancelled and delayed four out of its five public tenders within the last four months, thereby creating a situation wherein there was a massive shortage of pharmaceuticals.

When contacted, Chief Executive Officer (CEO) of the Georgetown Hospital, Allan Johnson, refused to speak on the matter, and questions asked were repeatedly met with this answer: “No, thank you”.

Public Health Minister Volda Lawrence, who had a role in approving the awarding of the $606 million contract to the Trinidadian firm, also refused to speak to reporters on the issue. On the sidelines of a parliamentary sitting on Thursday, Lawrence told media operatives, “I am not for sale, and neither is my integrity.” The Minister has, however, promised to release a statement on the matter.

In a letter dated February 28, 2017, Johnson thanked the Minister for authorising the procurement of medical supplies from ANSA McAL to the tune of $605,962,200, even though local firms could have supplied the same quantity and quality of drugs at better prices.

Cheaper prices

Questions are now being raised regarding why local firms which could have supplied the pharmaceuticals at cheaper prices had been sidelined. It raises the issue of motive and possible corruption, which is reminiscent of the earlier decision to rent a non-existent pharma warehouse.

In a Kaieteur News report, ANSA McAL claimed it had submitted a bid for the $606 million contract; but according to information received, on Tuesday, February 14, 2017, six companies, including ANSA McAL, had each submitted a bid in response to the Georgetown Public Hospital’s public tender for pharmaceuticals. In fact, the list of participating companies and their respective bid totals were published in KN on February 15. Moreover, on the same day, Georgetown Public Hospital also requested quotations, not bids, for emergency supplies based on availability, after it had belatedly cancelled yet another tender for emergency supplies. There was therefore no bidding process for the emergency supplies, as is being alleged.

Given the magnitude of this transaction with ANSA McAL, there is a strong possibility that it would impact the public tender/quantities which are still under consideration, and that must be of concern to the five other bidders.

Meanwhile another local company, NEW GPC, pointed out on Wednesday that it could have supplied many of the items instantaneously, since there is usually inventory on hand. In a worst-case scenario, the company said, the delay would have been less than a few days to get the products manufactured right here in Guyana.

“NEW GPC has surveyed some of the items it manufactures locally and some imported against ANSA McAL, and the company’s prices are significantly cheaper. NEW GPC’s prices could be independently confirmed by reviewing recent bid submissions to the Tender Board in 2016 and 2017,” the firm stated.

Additionally, NEW GPC has said that by utilising its established and reliable supply chain, it could have supplied earlier the items to be imported; for instance, a Clindamycin injection, for which ANSA McAL’s price was 12 times that of the NEW GPC’s.

For Diclofenac tablets, the NEW GPC has said, ANSA McAL’s price was 15 times its price; and for Clotrimazole cream, which is made locally, ANSA McAL’s price was as much as 23 times the New GPC’s price. From merely 16 of the 118 items surveyed, the Georgetown Hospital would have saved over G$100 million of taxpayers’ money had it purchased those items from the NEW GPC.

The local manufacturing giant strongly believes its quotations are being deliberately excluded, or timed in such a manner as to facilitate ANSA McAL. “Case in point is the Georgetown Hospital’s recent purchase of Oxytocin (Item# 114) from ANSA McAL when NEW GPC had inventory on hand and offered it at what is now confirmed at a fraction of the price. In any case, what reason could there be for an emergency purchase from ANSA McAL if NEW GPC was offering stock on hand at a better price? And what about other local suppliers?” NEW GPC questioned.

NEW GPC also noted that in recent meetings with suppliers, Georgetown Public Hospital’s senior management insisted that they would seek out the lowest price to determine tender awards.

“Choosing to do business with ANSA McAL with these exorbitant prices is contrary to that publicly stated position and is tantamount to misleading the other bidders who were present,” NEW GPC said.

The company also highlighted that the Georgetown Public Hospital’s previous preference for cheapest prices created the opportunity for some importers to supply inferior products at the exclusion of locally manufactured items, and this most certainly had adverse consequences on patients.

NEW GPC also noted, with concern, the Georgetown Hospital’s recent removal of the 10 per cent preferential treatment.

“Which Guyanese company could realistically secure a contract from the Trinidad Government for US$3 million in pharmaceuticals; and moreover do this outside of public tender – and for the supply of products from extra regional sources, since ANSA McAL is not a manufacturer?” NEW GPC has asked. (Guyana Times)

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