Irregularities in drug procurement under emergency purchases revealed

An audit report submitted by the Auditor General about the 2020 annual report of the State Pharmaceuticals Corporation (SPC) has disclosed irregularities in the purchase of dopamine and epoetin.

As per the SPC’s annual report, the Medical Supplies Division (MSD) of the Health Ministry, in accordance with the international competitive bidding system, had called bids for the purchase of 120,000 ampoules of dopamine of 5ml to treat heart patients. Subsequently, the MSD had awarded the bid to a selected supplier to procure one ampoule of dopamine for a price of Rs. 33.43.

The report mentions that a total amount of Rs. 4 million (Rs. 4,011,600) had been allocated for the purchase of 120,000 ampoules in total.

However, as the order was delayed, the MSD went on to purchase 12,994 of ampoules of dopamine of 5ml from the local agent of the main supplier for Rs. 940 each.

At the same time, 14,995 more ampoules of another drug had been purchased from another supplier and the total cost for both purchases amounted to Rs 26 million (Rs. 26,309,660).

It is reported that the Technical Evaluation Committee and the Procurement Committee had overlooked the difference between the total procurement cost and the initial allocation made for the purchase.

Meanwhile, the additional cost of Rs. 23 million (Rs. 23,231,048) which was incurred due to the supply delays as a result of a fault on the part of the main supplier had not been recovered either.

Further, it was revealed that purchase order had been awarded to the main supplier despite its unwillingness to test the dopamine samples at the SPC’s laboratory instead of at an SPC-approved Indian laboratory. 

The audit report also shows that although the ampoules purchased from the local agent were required to have a shelf life of at least 12 months at the time it is provided to the MSD, the shelf life had been mentioned as 10 months.

It also threw light on a sum to the tune of Rs. 44 million (Rs. 44,640,750) spent under emergency purchases for the procurement of 7,000 syringes of epoetin 1000IU for kidney patients.

Completion of the procurement process has taken nearly 2 years although it was supposed to be completed within a period of 8 weeks, resulting in an additional cost of over Rs. 1 million (Rs. 1,179,757) which was incurred due to the continued depreciation of Sri Lankan rupee against the US dollar.

In 2018, the Hambantota District General Hospital and the Colombo South Teaching Hospital had requested 3,000 of these syringes for their estimated requirement, none of these two hospitals had received a single syringe up until July 06, 2020.

It was also revealed that 5,612 other syringes had been in storage at the MSD without being distributed while only 1,388 were provided to 10 hospitals which had not submitted their estimated epoetin syringe requirement.

According to the report, this drug had been procured at a time when there was no urgency.