Pharma scandal: Procurement delays, exorbitant prices will force billion-dollar supplementary

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…still no system to replace prequalification criteria for reliability

While the controversy surrounding the latest $605 million sole-sourcing scandal to have beset the Public Health Ministry/Georgetown Public Hospital Corporation (GPHC) continues, with regard to pharmaceutical supplies procured for the health sector, reports continue to pour in from all regions – including the tertiary Georgetown Hospital – of continued drug shortages, which are having an adverse effect on poorer patients who cannot afford to purchase the drugs prescribed by their public medical practitioners.

Stakeholders are asking: When will Government sort out its pharma procurement system?

Country Head of ANSA McAL in Guyana, Beverly Harper
Country Head of ANSA McAL in Guyana, Beverly Harper

Recently-appointed Public Health Minister Volda Lawrence has volunteered that it was an acute shortage of drugs in the system that led her to approve a sole-sourced contract for $605 million for Trinidadian firm ANSA McAL.

“Some of these pharmaceuticals were overdue by as much as six months, which exacerbated the drug shortage at the Hospital. These are the same suppliers who, before May 2015, when all the pharmaceuticals for the nation was sole-sourced from NEW GPC for billions of dollars, were given the opportunity under the Granger Administration to become suppliers of pharmaceuticals to the public healthcare sector,” she said.

After stoutly denying there were shortages in the face of persistent reports to the contrary, former Public Health Minister, Dr George Norton has now conceded that in fact the shortages did exist. He said he supported Minister Lawrence in her decision to sole source. During the budget debate in February 2016, Dr Karen Cummings, the Government’s point person on health, alluded to the cancellation of the prequalification-based contract with the NEW GPC in October 2015, and said, “Mr Speaker, open, competitive bidding is on the horizon. Sole sourcing of drugs, as we know it, will end very soon! This [A Partnership for National Unity/Alliance For Change] APNU/AFC Government will ensure that it does not water the hard-earned taxpayers’ dollars on enriching the pockets of the undeserving.”

Public Health Minister Volda Lawrence
Public Health Minister Volda Lawrence

The Public Health Ministry claimed to have received support from the United States Agency for International Development (USAID) to develop a new standard for “an open, competitive bidding system”. A bidding document to this effect has been approved by the National Tender Administration Board, following which a pre-bid meeting with all potential bidders was held on December 16, 2015. However, the $700 million which were allocated the following January now appear to have been given to selected suppliers, who did not deliver and who the Minister stubbornly refuses to identify. A source at GPHC has indicated to this newspaper that one of the major culprits is a company based on Camp Street, which is owned by a known AFC supporter.

The concerned professionals are worried that unless the defaulting suppliers are publicly identified, they will once again receive contracts they cannot supply, and place additional lives at risk. They hope that if the Minister continues to balk, the Auditor General would at least rectify this anomaly next year.

In the new round of efforts to supply pharmaceuticals for the country, the present revelations indicate that on four separate occasions, bids from suppliers were received but were cancelled after irregularities were discovered to have been committed to give some suppliers an unfair advantage. The IPA was not one of the four suppliers that received “emergency” contracts to bail out the Ministry from the crisis of its own making, and this lends credence to the claims of those professionals who point to the IPA as a defaulter. Because of the delay and exorbitant prices paid for sourcing of supplies, one insider has predicted that Government will have to return to Parliament with a supplementary budget for at least $1 billion.

Reviewing the debacle, President David Granger opined, “If there is some procedural irregularity, that (situation) can be rectified; and if it is found that somebody is at fault; well, there can be disciplinary actions,” he told reporters on the televised programme “The Public Interest”.

Prequalification

However, according to a source from the Public Health Ministry, who spoke with this publication, “Guyana should not try to re-invent the wheel. The Government promised to replace the World Bank/[World Health Organisation]WHO-designed prequalification system that Guyana had because they wanted to create a “more level and decentralised playing field”.” However, he has emphasised that in so doing, the Government allowed in “fly-by-night” companies and individuals who just could not handle the internationally prescribed standards and consequent supply chain demands. “This is also why we have the Minister now complaining about ‘fake drugs’ entering the system,” the professional emphasised.

Another doctor with years of experience in the public and private health sectors said, “Whatever their concerns about the old prequalification criteria favouring one company, they have to admit it worked over the decade it was in place. And it’s a myth that only one company benefited; the others who received a substantial amount of the business had the decade to bring their scores up to par. We can see the consequences of that now that they can’t deliver contracts they were handed.”

Pressed to elaborate on NEW GPC’s record between 2005 and 2015 for the country’s pharma supplies, he rattled it off: “The proof of the pudding is (that) there were no shortages in the decade. None! They also offered 70,000 square feet of temperature-controlled, WHO-compliant cold chain storage pharma warehousing, completely free of cost. And with their location at Ruimveldt, it meant almost instantaneous deliveries.

“They also added a manufacturing capacity to our national push for independence by manufacturing a substantial quantity of pharma supplies, which were FDA approved and resulted in substantial exports to bring in foreign currency. They also employed a substantial number of Guyanese, who all paid their taxes.”

According to the Minister, NEW GPC was one of the companies given part of the emergency order; however, attempts to elicit a comment from NEW GPC proved futile, as calls were not returned as promised. (Guyana Times)

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