Doing away with awarding of contracts can lower cost of drugs

LAST week, The National’s reporter Rebecca Kuku looked at the history of Papua New Guinea (PNG)’s protracted procurement and supply of medical kits and pharmaceutical drugs woes and issues. She now focuses on the National Procurement Commission (NPC) and controversial supplier, Borneo Pacific Pharmaceuticals Limited (BPPL).

CAN PNG’s medical kits and pharmaceutical drugs be made cheaper for Papua New Guineans?
That’s the question The National pursued and featured after the National Doctor’s Association (NDA) raised its furore after health secretary Pascoe Kase on Aug 14 announced that BPPL had been awarded two government contracts to supply medical kits and antibiotics valued at more than K100 million.

Yockopua … Generic medicines procured this way will be cheaper and effective.

NDA secretary and chief of emergency medicine Dr Sam Yockopua questioned the Government’s rationale of awarding contracts to the private sector.
“Why can’t the Government set up its own department to procure medical kits and medicine directly, either, from the World Health Organisation (WHO)-certified suppliers, like the International Dispensary Association (IDA) or equivalent, or directly from manufacturers in Asia, Australia, the US or Europe?
“Generic medicines procured this way will be cheaper and effective,” he added.
Last week, The National spoke to the National Department of Health (NDOH), the National Procurement Commission (NPC), Institute of National Affairs executive officer Paul Barker and former health secretary Dr Quentin Riley. The report covered the processes and the person (s) involved in tendering and awarding the contract.

Bole … tenders go through stringent steps and procedures

We now look at how tender is processed by NPC.
NPC chief executive officer Simon Bole says there are three procedures to be adhered to when processing tender requests:

• IN awarding contracts, including contracts for the procurement and supply of medicine and pharmaceutical drugs or antibiotics, the NDOH will write to NPC requesting for a tender execution by submitting its bidding documents and specifications;
• NPC then assesses NDOH’s request and checks to see if NDOH has the funds or whether there is an Authority to Pre-Commit from the Finance Department. When all documents are cleared, the NPC sends the costing for the advertisements, and after the NDOH has made the payment, the NPC proceeds to advertise on behalf of the NDOH. NPC then conducts the open and close tender with the NDOH after six weeks.
• NDOH then goes through its evaluation and assessment exercise to submit its recommendation to NPC. Upon receiving the recommendation accompanied by all the required documents, the NPC will submit the request to the Technical Finance Evaluation Committee (TFEC) which is made up of technical advisers and senior officers from state solicitors, NDOH, Works, Finance and NPC officials.

“The NPC Board and CEO is not part of the TFEC. The evaluation report from the TFEC is then given to the NPC CEO who then gives it to the NPC Board which is made up of the finance and works secretary, officials from the finance minister, state solicitors, an engineer, an accountant and a civil society representative.
“If the contract is below K10 million, then the board approves it and NPC writes up the contract and sends it to the state solicitors for legal clearance. After this is done the contract is signed.
“But if the contract is worth more than K10 million, then NPC sends the recommendations to the state solicitors for legal correction and the works department for technical correction before submitting it to NEC for approval.
“Once NEC approves it, the documents are sent back to NPC. We will then write up the contract and send it to the state solicitors again for legal clearance. After this is done, state solicitors sends it back to NPC who then sends it to the NEC for execution,” Bole said.
He said upon approval, the NEC would send the documents to the Governor-General to sign the contracts on behalf of the state.
Bole said tender processes took so long because of the required stringent steps and procedures.
He added that the public had the right to lay complaints against the awarding of Government contracts, provided they had the evidence to support their grouses.
Bole said the public, including organisations and associations like the National Doctor’s Association (NDA) could lodge complaints with the NPC if they were not happy with the awarding of contract/s but it must also provide supporting documents and evidence to back their grouses why the contract/s should be suspended or cancelled.
“And if the NPC finds enough evidence to entertain the grouses or complaints, we can suspend the contracts while an investigation is carried out,” he added.

Sir John … PAC to probe why Australian Government withdrew its two-year $38 million funding programme for PNG in 2013

Despite the NDA’s furious response a day after the awarding of contracts was announced, the NDOH maintained that PNG needed to top up the supply of medical kits and antibiotics.
Kase said BPPL was awarded the two one year contracts to ensure that the country would not be hit by medicine shortages while a new contract was tendered.
Parliamentary Public Accounts Committee (PAC) chairman Sir John Pundari has announced that, among other controversies, the two government contracts awarded to BPPL would also be probed following a public outcry, including stakeholders in the health sector.
BPPL has been doing business with the NDOH since the 1980s. The company is registered with the Investment Promotion Authority (IPA) and is certified under the PNG Pharmacy Act.
This Act was passed after the millennium. BPPL gets its supplies from three off-shore manufacturing companies, including the controversial North China Pharmaceutical Corporation (NCPC) who were certified by the WHO in 2015 to manufacture and package medicine.
BPPL’s warehouse, storage site and cool room were inspected by the German ISO 9001 certification team and the company only got its ISO 9001 in 2014.
However, Sir John said that they would also be looking into why the Australian Government withdrew its two-year $38 million funding programme to supply drugs to some 3,000 health centres nationwide out of concern over the BPPL tender process in 2013.
“We will also be looking into finding out where the medicines are being sourced from and why there has been continuous continuous complaints and reports of medicine shortages every year despite the spending of huge allocations into public health services,” he said.

Juffa … complaints are not just coming from the public but also from hospital and aid post health officers

PAC deputy chairman Garry Juffa also says the health of the people is a priority and the Government must ensure that it is effective and services are reaching to everyone.
“The PAC inquiry notices have been served in response to the public outcry since the contracts were awarded to BPPL.
“We cannot work on rumors and allegations, so we are conducting the inquiry to collect information and review it.
“And the complaints are not just coming from the public but also from hospital and aid post health officers who have all spoken out against this. Even doctors have threatened to walk off their jobs.
“Year after year, bigger and bigger allocations are approved for the health sector, yet medicine shortages are a yearly issue,” he said.
Juffa said the PAC was mandated to protect the people and the public funds belong to the people.
“The PAC has given all three parties – NDOH, NPC and BPPL – 14 days to come forward with the information it has requested for the inquiry,” he added.
BPPL has denied allegations (not by The National) that the medicinal supplies procured by the company were substandard or fake.
The National has, since Aug 16, published follow-up news on why the Government should look into cheaper alternative ways to procure medical kits and supplies.

Prime Minister James Marape had also, on Aug 18 told The National that the Government was reviewing and looking into alternative ways to improve its procurement and supply of medicines (pharmaceutical drugs) for the people.
“And we will be talking to donor partners, including Australia, on how best to procure and supply medicines in the country,” he added.
Marape said the two contracts awarded to BPPL was only for one year to ensure the country did not face shortages of medicine.
In 2017, online news portal PNGi published a three-part feature titled “Profiting from sickness: The dark economy of public health …”
The PNGi reports contain many details and damning allegations against BPPL.
Asked for clarifications and comments on the reports, BPPL Julia Y in an email response, copied to Fairfax Legal lawyer Keith Iduhu, to The National said:
“Firstly Publisher of PNGI are not known any legal action would be a futile exercise. The company take serious on this unfounded allegations and reserved its right to file court action when the identity of the publisher are known.
As to the sources of Borneo’s suppliers who are allegedly certify to only manufacture medicine for animal: Borneo categorically denies this assertion and advise that we source our medical supplies from NCPC International Corp., who are also the supplier of medicine to IDA. (please refer to IDA’s recent prove of purchase from NCPC international Corp. as attached). Noted that IDA is the preferred supplier of drugs whom the NDA has been advocating for.
We reserved the right to take legal action for any adverse, untruth and unfounded allegation made thus far.
Thank you.
Regards
Julia Y.
Borneo Pacific Pharmaceuticals Ltd
Port Moresby, Papua New Guinea” – sic

BPPL chairman Sir Martin Poh says: “We know the quality of the drugs that we are bringing into the country. There are reports alleging that the medical supplies procured are fake and that the contracts it was awarded last month were illegal.
“In August this year, we were awarded two contracts for the supply of Beta Lactam Antibiotics Drugs and the supply of 100 per cent Health Centre and Aid Post Kits in PNG.
“Since the award of the contracts, there have been numerous reports alleging that medicinal supplies procured by the company are, substandard and/or fake and the contracts are illegal.
“BPPL categorically denies the allegations made without substantive evidence to prove such claims.
“The NDA leveled similar allegations against BPPL after it was awarded a similar contract in 2013. Consequently, a team including NDA representatives and NDOH visited the two factories in China from which BPPL imported the medical kits.
“A report of that fact-finding mission concluded that BPPL’s arrangement with the NCPC is certified and internationally recognised.”
Sir Poh said NCPC also exported pharmaceutical drugs to Europe, the US, India and Africa and 80 countries and regions.
“It is also the first company in China to obtain the ISO 9001 Quality Management System Certification. The manufacturer is also recognised by the WHO and United Nations International Children’s Emergency Fund (Unicef).
“BPPL is not the only supplier to procure pharmaceutical medicine supplies from NCPC. The International Dispensary Association (IDA) also sources from NCPC,” Sir Poh stressed.
BPPL started operations in 1996, registering as a pharmaceutical company in PNG. It has since had a long association with the NDOH, private hospitals and other pharmaceutical suppliers in the country.
A supplier and distributor of health centre and aid post medical kits since 2000, WHO engaged a consultant in 2008 to review the content of the kits.
It must also be noted that medicinal products supplied to NDOH by local suppliers from companies or manufacturers from abroad are all prequalified by the NDOH based on the documentation supplied by agencies.
BPPL also attained ISO 9001: 2015 accreditation in 2014. A similar PAC inquiry was conducted in 2014.
The National had also conducted a random search on BPPL’s corporate website for more information on its corporate activities and history but could not find any.

Meanwhile, Sir John has invited the public and Members of Parliament to attend and witness inquiries into the NDOH, NPC and BPPL.
He said the PAC had issued “notice to produce”, pursuant to Section 23 (1) (b) of the Permanent Parliamentary Act to the NDOH, NPC and BPPL.