GPHC issues explanation for $632M drug purchase

Jul 22, 2017 News

– says management erred, Minister not responsible

Public Health Minister Volda Lawrence

An explanation has been issued by the Georgetown Public Hospital Corporation [GPHC] regarding its controversial $632 million emergency procurement.
In a statement disseminated to the media yesterday, the Board of Directors of the hospital revealed that based on its own probe into the multimillion-dollar emergency procurement at the beginning of the year, it was found that the GPHC was facing a critical shortage of drugs.
Reasons cited for the shortage by hospital authorities included underestimation and late quantification of drugs, the annulment of a tender because a GPHC Finance Department employee tampered with a tender document; and the failure of some local suppliers to honour their 2016 contracts.
The Board in its statement further pointed out that on February 3, 2017, Minister of Public Health, Ms. Volda Lawrence, held a meeting with then Chief Executive Officer [CEO] [Ag], Mr. Allan Johnson, and senior staff of the Finance and Pharmacy Departments of GPHC and compelled them to immediately devise a plan of action to alleviate the drug shortage as quickly as possible.
The staff of GPHC reported that the Minister requested that the hospital take into consideration the Pan American Health Organisation (PAHO)’s emergency mechanism to supply pharmaceuticals, and also check with the Materials Management Unit (MMU) of the Ministry of Public Health to ascertain whether they had any of the required drugs in stock.
Thereafter, a determination could be made about which drugs the hospital would need to procure from suppliers.
It was noted that at a subsequent meeting that day, the Minister of Public Health reportedly listened to a plan of action developed and presented by the GPHC Finance Director which included determining availability of drugs from PAHO, MMU and local suppliers; obtaining quotations from suppliers; sending an evaluation report to National Procurement and Tender Administration (NPTAB) for approval, then followed by the award of tender. However, GPHC did not follow its stated plan of action, the Board statement underscored.
The Procurement Act provides that any contract beyond the sum of $15 million must go through NPTAB, which then forwards it to Cabinet for review and approval.
It was noted that former Acting Chief Executive Officer of GPHC, Mr Allan Johnson, wrote NPTAB seeking approval for the contracts, after GPHC had begun to receive pharmaceuticals from the suppliers.
“None of the information received by the Board revealed that the Honourable Minister ever gave instructions to GPHC officials to bypass any procurement procedures or laws,” the Board said in its statement.
In fact, the statement added, “The Board was shocked and disappointed to learn that GPHC had breached the law”.
It was revealed that the emergency procurement included pharmaceuticals from New Guyana Pharmaceutical valued at $20,888,610, from Health2000 valued at $2,923,920, and from Chirosyn Discovery valued at $2,138,925 under the same flawed procurement process.
The Board said that it believes that the senior staff of the Finance Department had an ethical and professional duty to properly advise Mr. Johnson, since this matter was within their realm of expertise. Mr. Johnson had been known to trust and depend on his officers to do the right thing and it is regrettable that they failed him in this instance.
“However, ultimately the power was within Mr. Johnson’s judgment and signature, and he acted recklessly. It is also unacceptable that when the Board was installed and held its first meeting on 22nd February, 2017, Mr. Johnson failed to disclose this serious matter to the newly-installed members,” the Board added in its statement.
As such, it emphasised in its statement that “the Board, Management and staff of GPHC have been fully cooperating with the Public Procurement Commission (PPC) in their ongoing investigation. We wish to defer to the report of the PPC in relation to this matter since that body has the remit and required expertise to conduct a thorough investigation.
Further, the PPC has wider jurisdiction to interview all parties involved,” the Board added in its statement.

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