Sole-sourcing of drugs from New GPC worrying

– PAC sees resistance to public tender

Members of the Public Accounts Committee (PAC) of Parliament are concerned at the Health Ministry’s continued sourcing of drugs from the New Guyana Pharmaceutical Corporation Limited (NGPC) without competitive bidding, despite repeatedly promising to discontinue this practice.

Public Accounts Committee Chairman PNCR-1G MP Volda Lawrence told Stabroek News recently that the single-sourcing from the NGPC is a classic example as to why the Public Procurement Commission needs to be established. What makes the situation worse, she said, is that the government is basically financing the company’s operations since it gives the company a full advance to purchase the drugs.

When contacted on Friday, Director of the NGPC Dr Ranjisinghi Ramroop declined to comment on the matter, saying that this newspaper has been targeting his business.  “Stabroek News is targeting my group of companies through various means,” he said, while accusing the Kaieteur News of doing the same.

Over $1.4 billion was paid by the government to the NGPC last year for the procurement of drugs and medical supplies based on sole sourcing approved by the National Procurement and Tender Administration Board (NPTAB), the latest Auditor General Report had stated. The report also noted the continued failure of the administration to appoint a Public Procurement Commission, in accordance with Article 212(W) of the Constitution, to oversee such transactions.

According to the recent report, “during 2009, the ministry expended amounts totalling $1.884 billion for drugs and medical supplies.”  Of this amount, the report said, an amount of $1.404 billion was paid to the New GPC Ltd, after approvals were obtained from the NPTAB for contract awards.

Lawrence believes that these drugs could easily be procured at cheaper prices adding that the Health Ministry has a Procurement Agency which could easily acquire such products using a computer. She said there was not much the Public Accounts Committee could do about the matter except speak about it.

Back in July of 2008 when the matter was raised by some parliamentarians, Health Minister Dr Leslie Ramsammy had strongly defended direct drug purchases from the NGPC as compliant with a Cabinet decision but also announced that his ministry would request a renewal of a decision which would also allow procurement from several international suppliers.

The Auditor General’s report for 2004 had made a recommendation that the ministry advertise internationally every three years for the supply of drugs and medical supplies and pre-qualify suppliers.

Efforts to contact Ramsammy for comment on the matter were unsuccessful.

The manner in which the government procures drugs from the NGPC has been highlighted in previous reports by the Auditor General and the issue has been raised repeatedly by the opposition parties in the National Assembly.  When the matter was raised in the 2008 Auditor General’s report in connection with the GPHC, the Head of the Budget Agency said that Cabinet had renewed its approval by the issuance of Cabinet Decision CP (2003) in July of 2008.

The Audit Office recommended that the corporation put systems in place to ensure that all drugs supplied are promptly delivered and to avoid any breaches in the tender board procedures.

In July of 2008, Ramsammy explained that the waiver aimed at NGPC came into play in 2003 and this also was not time-bound as Cabinet had made the decision after he made a request in order to improve procurement and supplies to the health sector. He said several local suppliers were provided with the International Development Association (IDA) price list and given the opportunity to make proposals for the supply of medicines and commodities on condition that the quality and price and the ability to deliver medicine on a timely basis be competitive with IDA. “The NGPC submitted a detailed proposal which the Ministry of Health believed would improve the supply chain arrangements,” the minister said.

Ramsammy said then that procurement from local and overseas agencies were on a pay-first basis. And payments to NGPC were always secured through financial security arrangements. “It is therefore mischievous to give the impression that the Ministry of Health favours the NGPC by payment upfront for its drugs and medical supplies. The Ministry of Health’s payments to the NGPC, moreover, [are] with local currency and savings accrue because the government does not have to purchase foreign currency,” he said. He said too that the NGPC facilitates storage for the ministry’s supplies with no additional cost. The minister said since many of the drugs procured from the company are available through its warehouse, the ministry did not have to take its supplies through one-time block shipment and this ensured that drugs did not expire because of slow use by the sector.

AFC MP David Patterson, who is also a member of the Public Accounts Committee, said that with the absence of a Procurement Commission, there is not much the PAC could do to stop the arrangement. Asked if it could be that the New GPC was providing the drugs at a very competitive price, Patterson said that no.  “There is no evidence of that whatsoever, nothing to suggest that we’re getting a deal from NGPC,” he said.

According to Patterson, when the Ministry of Health came to the Public Accounts Committee in June they said that they were about to put things in place to go to tender. But Patterson labelled this a “smoke screen” while questioning why the process would take so long.  “How long does it take to go to tender for an aspirin?” he asked while stressing that “this is not rocket science”.

He said that there is a clear resistance to having an open tender for the procurement of drugs. “If they [the New GPC] are providing such a lovely service, they should be no objection to opening it to tender,” Patterson said. He too echoed the sentiments of Lawrence that the government was using taxpayers’ money to finance the operations of the NGPC.
– PAC sees resistance to public tender

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