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Anti-malaria drugs tender…Investigation shows drugs worth less than $30M

Government’s purchases of drugs in recent years have come under growing fire with questions of transparency and whether Guyana was getting value for its precious dollars.
Not only has the state auditors criticized the process of procurement, but the opposition parties in Parliament have expressed alarm and have crossed swords with Government. Every year, billions of dollars are handed out in lucrative contracts to especially New GPC, which has been at the centre of the controversy.

New GPC’s CEO, Dr. Ranjisinghi ‘Bobby’ Ramroop

Earlier this week, in the latest of such, the National Procurement and Tender Administration Board (NPTAB), which is the body tasked with assessing bids for government contracts, handled the opening of tenders for the supply of a quantity of 10 anti-malaria drugs. Two lone bids were submitted, one was from the International Pharmaceutical Agency (IPA) for $32.7M and the other for $261.5M from New GPC whose bid was $228M more than IPA’s.
Kaieteur News is in possession of the list of anti-malaria drugs that Government needed.
That list includes Artemether/Lumefantrine; Primaquine; Chloroquine; Artesunate; Mefloquine and Quinine.
There are a number of websites easily available which give the prices of drugs. One of them is http://erc.msh.org. According to the site, a popular one used by suppliers, the cost per tablet or capsules and injections for the listed anti-malaria drugs range from one US cent to the most expensive being about forty-eight US cents.
Using the website’s prices, which are quoted in US dollars, a rough calculation of the price of drugs as requested by the Ministry of Health comes up to Guyana dollars $24M.
IPA’s bid, as mentioned above was for almost $33M while New GPC was for just over $261M.
In a statement on Friday, New GPC claimed that Ministry of Health requested drugs manufactured by Novartis.
“The Government of Guyana (GOG) through the Ministry of Health (MOH) requested in the bid document the supply of Coartem, an anti-malarial drug. The bids were opened at the National Procurement and Tender Administration Board (NPTAB), Ministry of Finance, for the supply and delivery of anti-malarial drugs on Tuesday.”
The independent Stabroek News newspaper reporting on the bids opening this week called the Chief Executive Officer (CEO) of New GPC, Dr. Ranjisinghi ‘Bobby’ for a comment but said it was accused of wanting to cause a scandal.
Through sole tendering, something that the Auditor General has criticised in numerous annual reports, the New GPC has received billions of dollars from the government. Given this bid one can imagine the price the government paid for its drug supplies.
On Friday again, both the government and New GPC issued separate statements defending the procurement process and the questionable bids.
According to Health Minister, Dr. Bheri Ramsaran, the evaluation process is yet to be completed and as such it may be too early to pronounce on the issue. But it was Minister Ramsaran who justified the purchase of the drug, Ketoconazole for a price nine times what it should cost.
“I would like to point out that at this very early stage, the bids have just been opened and the evaluation of these bids has to be done according to established procedure of the evaluation committee. I would like also to point out that the discrepancy between the amounts of monies that are indicated in the article may well be explained when this evaluation process would have been completed.”

Health Minister, Dr. Bheri Ramsaran

The Ministry of Health, in the statement, said the Government of Guyana awaits that report.
He also said that some of the drugs look expensive.
“We need to look at those. Some of these drugs look quite expensive and it would be useful for use to await the evaluation process which is a law governed process, fixed menu of measures that will be undertaken to see that the companies for example are compliant and that the drugs that they are bidding for are for example those that are in the original bid document and such other factors.”
The Minister insisted that the evaluation committee’s job is to determine whether each company bid for all the drugs and if they that were specified in the document.
He said also that malaria is a serious public health threat and the Ministry of Health has over the years with national partners such as PAHO worked out treatment modules and that includes the purchase of expensive medication which are tried and tested.
“The Ministry of Health intends to stick to those treatment regimes. In this regard the Ministry of Health advertised for companies to bid for the supply of such drugs. Such drugs would include for example the much tried and tested Co-artem.”
Co-artem is the brand name for the generic drug Artemether-Lumefantrine. The International Drug Price Indicator states that the highest price for the drug is US$1.46 per pack.
At this time, a generic version of Coartem (artemether/lumefantrine) is not available. Novartis Pharmaceuticals Corporation holds the exclusive rights to market this medication until October 2014. This is the earliest possible date that a generic version of the drug could become available. However, Co-artem may be protected by certain other exclusivity rights until April 2016.
Wikipedia carried the following note, “The first significant price reduction occurred in 2006, when the price of Co-artem decreased from an average of US $1.57 to US $1.00. In 2006, due to an improved supply situation for the natural ingredient artemisinin, Novartis was able to undertake the pharmaceutical industry’s most aggressive manufacturing scale-up of its kind from 4 million treatments in 2004 to 62 million treatments in 2006.
“Novartis and its partners invested heavily in expanding production capacity at their facilities in China, and Suffern, New York. This increase in production capacity ensured that supplies of Co-artem met demand which enabled Novartis to further decrease the price of Co-artem.

The list of drugs that the Ministry of Health published in its bid documents.

“In April 2008, Novartis further reduced the public sector price of Co-artem by approximately 20%, to an average of US $0.80 (or US $0.37 for a child’s treatment pack). This price reduction was made possible through production efficiency gains.”
“The Ministry of Health still maintains that drug as part of its treatment regime, one of the main prongs of its treatment regime to roll back malaria. We are not about to change that treatment regime since it is supported by the findings and research of reputable international support organisations and the findings of our malaria control programme,” he stated.
New GPC has been supplying drugs to the Guyana Government since the 1990s. At one time, the company was awarded contracts under what is known as the sole tendering process. This simply meant that government could just ask New GPC to supply a list of drugs without the necessary checks to determine whether the prices are in keeping with market prices.
According to Kaieteur News’ Editor-in-chief, Adam Harris, the procurement of services and supplies is critical to the development of Guyana.
“All that we are trying to determine is whether Guyanese are getting value for their money. It is a fact that New GPC would have been supplying drugs since the 90s. Questions have been asked what could be hidden, dating back to that period.”