Govt drugs purchases tops $5B mark this year

Apr 22, 2014 News

Guyana’s shopping budget for pharmaceuticals and medical supplies this year is expected to surpass the $5B mark even as the process to shortlist suppliers continues.

New GPC owner, Dr. Ranjisinghi ‘Bobby’ Ramroop

Last year, Guyana spent $4.69B. The time around, according to the estimates recently approved in the National Assembly, it is the intention to expend in excess of $5.14B, or $442M more than 2013.
The drugs bills would represent half of the total Ministry’s budget of $10B.
The Georgetown Public Hospital Corporation (GPHC) is set to spend $1.86B or $40M more than in 2013.
While the Opposition approved the expenditure during the recent considerations of the 2014 National Budget, there have been questions especially over the drug purchases by the Ministry of Health and GPHC.
The spending again attracted the attention of the Opposition during the recent budget debate. Leader of the Alliance For Change, Khemraj Ramjattan, requested details of what percentage of the $1.8B set aside for drug supplies the New GPC would be receiving in contracts. New GPC is the company in the middle of an ongoing scandal involving the purchase of drugs.
The government now has to provide the details.
For years now, the company, owned by Dr. Ranjisinghi ‘Bobby’ Ramroop, a close friend of former President Bharrat Jagdeo, has had a stranglehold in the supply of pharmaceuticals to the Government.
The Opposition, using its Parliamentary powers, has been questioning the manner in which the inventory was being managed and the prices being paid.
There were also heavy criticisms over the process used in selecting New GPC as a pre-qualified supplier which allowed the company to be among the first in line for the supply of drugs in case of emergencies.
That company has been accused by the Opposition of being favoured as a recipient of the multi-billion state contracts.
Ramjattan also wanted information as to what measures were in place to determine whether Guyana was receiving the best possible prices for drugs. Billions of dollars are being spent annually on procurement, with New GPC receiving the lion’s share in contracts.
Local importers have been complaining of a deliberate plot by the administration to sideline them.
In the case of the storage, the Ministry of Health, citing a lack of capacity, has been using a space of New GPC, paying that supplier tens of millions of dollars for storing drugs it had bought from them in the first place. Between late 2007 and December 2012, New GPC was paid more than $90M to store drugs for Government.
The Opposition, describing the deal as a sweetheart one, was especially concerned about the degree of control that the Ministry had over the drugs.
The Ministry has since moved to its own storage facility in Diamond, East Bank Demerara. Also, based on audit reports, there have been accusations that New GPC failed to deliver millions of dollars in drugs.
In early 2010, the Cabinet under the Jagdeo administration decided that New GPC would be the sole supplier of drugs.

Former President, Bharrat Jagdeo

In 2011, in controversial circumstances also, a number of companies were pre-qualified to become suppliers, including New GPC.
Drug purchases have accounted for a large chunk of the Ministry of Health’s expenses with New GPC in 2011 being awarded almost 80 per cent of the $13B expended.
The Opposition parties in the National Assembly have expressed alarm over the developments with members of its Public Accounts Committee arm, clashing during examinations of the 2010 Auditor General’s report.
Hotly debated also was how the Ministry did not follow competitive bidding processes and as such allowed $1.252B in contracts to be granted to New GPC to deliver drugs in 2010.
Last December, the pre-qualification period expired and Government immediately moved to invite companies to apply.
However, local suppliers and the Opposition again criticized the “unfair” conditions which included among other things, large spaces for storage and evidence that it supplied hundreds of millions of dollars in drugs.
The conditions, in effect, tipped the scales in favour of New GPC.