Lawrence admits to ‘fast-tracking’ $605M drug buy due to crisis-level shortage

-says procurement process not breached despite bypassing tender board

Volda Lawrence

Minister of Public Health Volda Lawrence yesterday admitted to “fast-tracking” the purchase of $605 million from ANSA McAL for the Georgetown Public Hospital Corporation (GPHC) and maintained that the public procurement process was not breached although the national tender board was not aware of the decision until its approval was sought after the transaction.

In a statement issued by the ministry yesterday, Lawrence for the first time publicly acknowledged that there is a crisis-level drug shortage, which she blamed on a conspiracy between contractors and ministry staff.

“My priority is to ensure the nation’s health is given top priority. The health system will not be held hostage by unprincipled persons and therefore I made the decision to shortlist the critical but unavailable items and the suppliers with the ability to provide them on time to avert deepening the drug demand difficulties,” Lawrence was quoted as saying.

Volda Lawrence
Berkley Wickham

According to the ministry, after meeting with public health officials around the country and at GPHC, the minister “was compelled in the interest of the health of the people” to ensure that an adequate supply of drugs were immediately available in the country “to meet the current crisis.” “To this end, she sought to fast track the procurement of these pharmaceuticals to minimise the negative effects on patients due to the shortage of some critical drugs,” the statement said.

“This influenced the decision to seek the greenlight from the National Procurement and Tender Administration Board (NPTAB) for ANSA McAL to supply drugs and pharmaceuticals to the tune of some G$605M,” it added.

No explanation was provided for why approval from the NPTAB was only sought after the fact rather than have it manage the process in keeping with its statutory responsibility.

The ministry statement was a response to recent Stabroek News reports about the $605M contract award to ANSA McAL, which the company has also said followed the procurement process, although Chairman of the NPTAB Berkley Wickham has indicated that the board was left in the dark.

Wickham told Stabroek News last Thursday that he had not seen the contract or approved the sum. “All I can tell you is that I received a letter with some documents attached one morning and almost simultaneously there was a story in your paper about the said letter,” he stated.

According to the letter, seen by Stabroek News, Chief Executive Officer (Ag) of the GPHC Allan Johnson wrote to Wickham on February 28, 2017 seeking approval for the emergency medical supplies. “The Georgetown Public Hospital Corporation is requesting approval from the National Procurement and Tender Administration Board to procure Emergency Medical Supplies. These emergency supplies were authorized by the Hon. Volda Lawrence, Minister of Public Health… The pharmaceuticals supplied by this company was at the time of request available only from this supplier,” the letter read.

He also noted that the NPTAB had received four bids last year for the supply of medical supplies for GPHC pegged at $1.5B.

This newspaper understands that four out of the last five public tenders issued by the GPHC in the last four months were postponed and then cancelled because of procurement irregularities pertaining to insider dealings. It was a result of the allegation that these tenders were faulty that led to a government-ordered Commission of Inquiry into procurement irregularities at the Ministry of Public Health.

Wickham said that as far as he knows, the NPTAB was awaiting the retender of the contracts and that is why he found the “sole sourcing” request to ANSA that he was handed difficult to comprehend.

He noted that upon receiving and reading the letter from the GPHC, and believing the request to absurd, he immediately informed that he did not approve the request. “I have not approved any money because I cannot [do it] just like that. I saw the letter and I said what craziness is this because that is not how it is done. Someone can’t just send a letter to me to approve six hundred and something million dollars, so I notified Lawrence,” he explained.

 

‘Now-controversial route’

The ministry’s statement said ANSA McAL was among four companies—the others were New GPC, Health 2000 and Chirosyn Discovery—from which emergency supplies were procured. It noted that other companies were not a part of the process due to ongoing investigations into their late/or non-delivery of critical drugs during 2016, which they were contracted to procure for GPHC. “Some of these pharmaceuticals were overdue by as much as six (6) months, which exacerbated the drugs 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 Health-care sector,” it added.

According to the ministry, ANSA McAL is one of only two companies in Guyana that is able to provide the cold chain storage necessary to maintain the integrity of a wide range of pharmaceuticals that are critical in the local healthcare sector.

It added that ANSA Mc AL not only airfreighted the drugs, which it said helped spike the cost to import the items for the public health sector, but also donated four refrigerators to GPHC to store the emergency supplies at the internationally acceptable temperature of 20 to 80 C.

“No other company in the history of the institution has provided cold storage facilities at the hospital even though, at least one of them was the sole supplier of pharmaceuticals to the institution for over 20 years. All pharmaceuticals for the entire nation was sole-sourced from that company for billions of tax-payers’ dollars. During that period, GPHC used icepacks to store these sensitive drugs at the facility, because the main refrigerator was in poor condition and unable to maintain the correct temperature for these drugs endangering their efficacy, potency and integrity,” it explained.

Lawrence, the ministry said, “was unwilling to jeopardise the sector and patients’ lives” and “took what may appear to be the now-controversial route.”

It added that “moles” in the GPHC procurement system have constantly being leaking information to the media with the aim of discrediting officials of the institution and that often-times misinformation is given. “The tender process was never breached and the route to procure the emergency supplies was fast tracked. The National Procurement and Tender Board Act makes provision for such, and the same suppliers would have emerged,” the ministry said.

‘Engineered shortage’

The ministry charged that several unscrupulous practices by suppliers have created supply gaps and acute shortages, especially in the outlying regions. It said after her appointment at the start of the year, Lawrence found a “crisis” in the health sector, which she blamed on a “conspiracy” between drug suppliers and ministry staff. She is quoted as saying that the “engineered shortage” has meant that drugs that should have been in the public health system since 2016 to cater for demands in the first quarter of this year are not there and this has far reaching implications for the tender process for drugs. As a result, she added that she is bracing for a fierce fight from suppliers and staff who now feel threatened by the new course being chartered for the public health system.

The statement said Lawrence met with several delinquent suppliers on Friday at her Brickdam, Georgetown office.

It was noted that after being “greeted with the news of a shortage of drugs in the system” after her appointment, Lawrence immediately held talks with Material Management Unit (MMU) staff of the Ministry of Public Health. She also visited several regional hospitals and GPHC executives to correct the problem.

However, the statement added that up to the present time she is still uncovering “a combination of skullduggery, collusion, delinquency, deliberate breaching of established sector protocol by Public Health staff, manipulation of the system by importers with the support of employees and fabrication of records including evidence of bogus receipts.”

Lawrence is quoted as saying that the situation is so dire that police have been called in to deal with staff who are selling drugs to private pharmacies.

She asserted that the current drug shortage is a “ploy” manufactured by “unprincipled importers” and “crooked Public Health staff” to enrich themselves. There is a widespread practice among some suppliers, Lawrence claimed, to wait until close to the contractual delivery date and then indicate their inability to supply the items for which they have had been paid, while others supply a few of the items then refuse to supply the remainder, blaming unexpected changes in the global market prices.

The statement said that while they are short-changing the public health sector, the very items are available on the local market at very steep prices from the same suppliers and their pharmaceutical clients. It added that this has forced private health institutions nationwide to buy the now high-priced items in limited quantities to help meet the needs of their patients.

The statement said the public health system needs urgent and massive overhaul as Lawrence has found that several procurement officials are not only unqualified for the job, but are also unwilling to follow protocols and processes, thus helping to “create a sand storm” within the health sector.

Consequently “slippages are many and gaps are very wide,” Lawrence was quoted as saying, while adding that because health is a lucrative sector and a magnet for “corrupt individuals and venal firms,” many have fallen victim to the allure of dishonest gain.

“Without a shadow of doubt this shortage is manmade and created to cheat the country of medical supplies and cash… but I am not for sale,” she said.

 

 

 

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