Emergency procurement of $605m in drugs

In Wednesday’s edition, Stabroek News reported that the Georgetown Public Hospital Corporation (GPHC) had applied to the Chairman of the National Procurement and Tender Administration Board (NPTAB) for approval for the emergency purchase of a whopping $605m worth of drugs from Trinidadian conglomerate ANSA McAL. This application was reputedly part of an overall request for a staggering $1.5b in drugs and involving three other firms.

Up to Friday, neither the Ministry of Public Health nor the GPHC had sought to defend this extraordinary request or to explain how it complied with the provisions of the Public Procurement Act. However, on Thursday when contacted by Stabroek News, the Chairman of the NPTAB, Berkley Wickham expressed shock that such a request could have been made of him in the manner that it was and said he had contacted the Minister of Public Health, Volda Lawrence on the matter.

On Thursday Minister Lawrence promised a statement by Friday on the transaction but this was then deferred to Saturday. The statement issued on Saturday by the Public Health Ministry was a jumbled defence of the emergency purchase, an admission of deep-seated problems in health procurement and a declaration that key personnel of the ministry have been and are compromised. Importantly, nowhere in the statement was there a reference as to what provisions of the Public Procurement Act were activated to enable this $605m purchase.

The ministry’s explanation was as follows: “After meeting with public health officials around the country and at GPHC, the Honourable Minister was compelled in the interest of the health of the people of Guyana, 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. This influenced the decision to seek the green light from the National Procurement and Tender Administration Board (NPTAB) for ANSA McAL to supply drugs and pharmaceuticals to the tune of some G$605M.”

Based on the statement on Saturday, Minister Lawrence and her ministry appear to have devised their own procurement law and are now a law onto themselves.  It defies belief that Minister Lawrence, a former Chairman of the Public Accounts Committee (PAC) of Parliament, would engage in such unlawful conduct. An accounting officer appearing before the PAC with a story similar to the one presented by Minister Lawrence on Saturday would be immediately banished from the hearing.

More information has to be provided by the Public Health Ministry but it appears that what the Ministry engaged in was restricted tendering. However, the purchase does not meet the criteria set by law for restricted tendering and towers over the threshold of $1m set in the regulations for such a procedure.

Under Clause 26 of the Public Procurement Act restricted tendering is only possible if highly specialised goods available from only a few sources are being sought in which case all such suppliers have to be invited to bid. In any event the contract has to be below the $1m benchmark set by the regulations under the Act. The Ministry’s procedure does not appear to comply with the request for quotation system neither does it comply with the single-source method where it could have attempted to argue a case for a catastrophic event in terms of a crippling shortage of drugs at the national referral hospital.

Minister Lawrence must now state exactly which provision of the Public Procurement Act she operated under and what steps she took to ensure that advice and approval were sought from the NPTAB on the matter before the purchase was made from ANSA McAl. The NPTAB’s formal position on Minister Lawrence’s  actions will be awaited with great interest as would the stance of the recently established Public Procurement Commission.

It is mind-boggling that any procuring agency can operate in this manner even considering the major challenges posed by drug supply at the GPHC. This transaction and the fact that it appears to have proceeded must attract urgent and serious scrutiny by the government. The Granger administration cannot play fast and loose with the procurement law. Certainly not after it pilloried the PPP/C for years over the favouring of the New GPC. The law is the law. It is sacrosanct and inviolable. Those who breach its premises – minister or not – must be held fully accountable. The President and Cabinet also have to be heard from on this issue. Did Cabinet grant a no-objection for this massive contract?

It would have been perfectly reasonable for the Ministry to declare an emergency at the GPHC and to seek the assistance of the NPTAB to determine how best to meet the hospital’s need in the context of the law. This thought doesn’t appear to have entered the Minister’s matrix for these purchases.

In the statement on Saturday, the Ministry makes a series of alarming declarations including that there was “skulduggery, 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.”

The statement further asserted that the “current drug shortage was a ploy manufactured by some unprincipled importers and crooked Public Health staff to enrich themselves” and that some pharmaceutical supplies were overdue by as much as six months.

From these statements it appears that there is an enormous crisis in drug procurement and it requires the declaration of an emergency to ensure that patients in the public health system are not made to suffer. This however does not justify the bypassing of the procurement law. The present situation would call into question the performance of both the former Minister, Dr George Norton and the administration itself over the last 21 months of this burgeoning crisis. What did they do about this drug shortage? For many months, both Minister Norton and the GPHC had denied persistent reports about the shortage of drugs. Was the ministry and the GPHC covering up this problem and why was the government oblivious to it? How many items on the ANSA McAl list are indeed urgently required by the GPHC and why wasn’t the list just confined to those?

These latest developments in the drug procurement system – coming on the heels of an earlier inquiry that led to the removal of the Public Health Permanent Secretary – further attest to the fact that the Granger administration is yet to grasp control of vital administrative areas. Its leading officials continue to underperform, dissemble and manufacture unlawful manoeuvres. The Charlestown drug bond is a clear case in point at this very ministry.

The public will await with great interest further information from Minister Lawrence and the NPTAB about the details of this drug procurement and then it will be for the government to act.


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