003. Central Drug Purchasing Greatest Corruption

Central drug purchasing greatest corruption.

By Pharma Biz.

P A Francis.
4 April 2012

Procurement of medicines, vaccines, contraceptives, medical equipments, etc. for various disease control programmes of the Central and state governments has grown into a huge business in India with increasing allocation of funds for it annually. These purchases are required for millions of employees of large undertakings like railways, defense department, public sector oil companies, etc. of the Central government and for health departments of state governments. What was happening over the last several years is growing corruption in purchases of drugs and other medical supplies of the Central and state governments. Many of these products are found to be not of standard quality and procured from multinationals and large Indian companies totally disregarding the quality products available from small scale companies. These purchases are made without following proper purchase norms and at high prices. And there has been complaints against such questionable procurement of medicines and other supplies in the past from various quarters. However some of the state governments like Tamil Nadu, Andhra Pradesh and Kerala have, of late, detected these irregularities in drug purchases in their states and have tried to streamline the system by setting up autonomous corporations for the purpose.

Compared to the state government purchases, the requirement of medicines by the Central government and its agencies is much larger and it is estimated to be more than Rs.2000 crore annually. For the Central government, most of the purchases are made under the Central Government Health Scheme of the heath ministry apart from the direct purchases by undertaking like Railways, SAIL, Coal India, etc. As these purchases involved huge sums of money, corruption and unfair purchase practices have got deep into the system. These Central agency and PSUs have been following different drug procurement criteria restricting the entry of several medium and small scale drug companies with good quality products. Earlier central agencies and PSUs have been procuring medicines through open tender applications without any restrictions like turnover criterion. But, since last 3 years, some of the PSUs imposed certain conditions barring smaller Indian companies from participating in the tenders. The conditions are based on considerations such as size of the company, market share and turnover and not on factors like quality, efficacy and affordability. In short, there was no uniformity in purchase norms of PSUs and CGHS causing discrimination and discontentment among the pharma industry. The health ministry has been, therefore, planning to bring an end to this faulty system of drug purchases by different central agencies and establish an autonomous and transparent drug procurement body. Now, last week Central Medical Services Society was established as the central procurement agency for all Central government purchases. The agency is expected to start functioning from current year as an independent, professional and autonomous agency for procurement of quality medicines and services required by the ministry of health in a transparent and fair manner. This revamped drug procurement system is expected to bring in prudent utilization of funds for various government healthcare schemes from now onwards. The health ministry must now ensure that CMSS should efficiently procure and distribute quality medicines and other supplies from largest number of pharmaceutical companies in the country henceforth. 

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