News
Pharma industry flays Health Minister’s drug purchase policy
View(s):- Chamber fires out six questions to NMRA as more details emerge on the controversial deals to buy medicine from two Indian firms — Savorite and blacklisted Kausikh
By Namini Wijedasa
Sri Lanka’s pharmaceutical industry this week voiced concern to the National Medicines Regulatory Authority (NMRA) about the Health Minister getting Cabinet approval to buy medical supplies for the State sector from locally unregistered Indian manufacturers, citing urgency.
The Cabinet has approved purchases from two companies named Savorite Pharmaceuticals (Pvt) Ltd and Kausikh Therapeutics (P) Ltd. The Savorite order has already been placed and the Health Ministry has requested a “waiver of registration” from NMRA for its drugs. The Kausikh proposal is under evaluation, Health Secretary Janaka Sri Chandraguptha said.
Broad-basing unsolicited proposals
Minister Rambukwella addressing the media on Wednesday. Pic by Akila Jayawardena
These approvals were not announced at Cabinet press briefings or published in the weekly list of Cabinet decisions, raising serious doubts about broader transparency in procurement matters–a longstanding issue that has repeatedly been flagged by multilateral agencies, including the International Monetary Fund.
However, anxiety within the health sector regarding such purchases–and alarm that recent trends could set a precedent for future medical purchases –has prompted a steady flow of information into the public domain.
Savorite is a first-time supplier. Neither its manufacturing site nor medical goods are listed with the local regulator, NMRA. Kausikh previously sold medicines to Sri Lanka but was blacklisted by the State Pharmaceutical Corporation (SPC) owing to a failed sample and product defect. It is currently not NMRA-registered.
The Minister claimed at a news conference on Wednesday that the Cabinet had also sanctioned the purchase of three months’ worth of NMRA-approved medical goods from “other selected suppliers”–in addition to Savorite and Kausikh–using the Indian credit line “and other funding resources” based on the urgency and requirement of the Medical Supplies Division (MSD).
This would greatly broaden the scope of obtaining medicines through unsolicited proposals, bypassing competitive tender. Also citing urgency, the Ministry is likely to seek another waiver of NMRA registration for the drugs to be bought from Kausikh.
For medicines to be sold in Sri Lanka, the NMRA must license the supplier’s manufacturing facility in keeping with World Health Organisation (WHO) standards as well as register its local agent and each drug to the company name. This is to ensure that the quality of individual products matches the required standards.
The importance of due process is evident from one previous report related to Kausikh Therapeutics. In 2015, bottles of Cephalexin antibiotic syrup (drawn as a random sample on the request of the then Director of the Lady Ridgeway Hospital for Children) were found to have “improper sealing of metal foil, absence of tamper proof plastic screw caps in some containers and formation of lumps on the inner walls of few bottles”. Issues with bottle quality also arose in 2017.
This is why local oversight is crucial, health sector officials reiterated. They spoke on condition of anonymity over fear of reprisals. “Registration or certification issued elsewhere is irrelevant,” a senior doctor said. “You cannot say a particular company is approved by the British or Australian or US authorities and so, by default, it is guaranteed that what it sells to Sri Lanka meets our prescribed standards of safety, efficacy and quality, etc. Domestic mechanisms exist to safeguard the well-being of Sri Lanka’s patients.”
The pharma industry
raises concerns
The Sri Lanka Chamber of Pharmaceutical Industry (SLCPI) also underscored this in a letter to NMRA Chief Executive Officer Vijith Gunasekera this week. It asked six questions from the regulator.
As the sole legal authority responsible for the registration of all pharmaceuticals and for setting, maintaining and ensuring their quality in the country, it inquired, was the NMRA kept informed of the latest actions by the Health Minister?
If so, is the NMRA in agreement “with unregistered pharmaceuticals being purchased in such an ad hoc manner from unregistered manufacturers who have no previous records of supplying the State health sector and are such actions compatible with the NMRA act of 2015?”
“Is the NMRA prepared to allow the same kind of privilege to other manufacturers who, in some cases, [are] much more reputable than the manufacturers mentioned in the media reports?” the SLCPI continued. “If such procedures are allowed, doesn’t that make the very institution of NMRA and its designated functions completely redundant?”
If these kinds of approvals are given a free hand, “why does the staff at the NMRA, especially the experts at the MEC [Medicines Evaluation Committee] extract so much details [sic] from our membership regarding perfectly legitimate products and even go to the extent of refusing registration on trivial grounds?”
“Does the financial status of our country, which is precarious even from the point of view of the Hon. Minister, allow this kind of profligacy with the scant resources of public money?” the Chamber pursues, stressing that its concerns were “as legitimate as they are serious”.
The SLCPI states that, “even [if] a minor component of these reports turns out to be accurate, we register our protest against such in the strongest manner possible”.
Systems are crucial
At his news conference, however, Minister Rambukwella said the Health Ministry had been forced to procure drugs through unsolicited proposals because registered suppliers had failed to provide supplies on competitive bidding. Of 180 tenders called, 16 companies had applied and only three came through.
“If we tender and they don’t come, as the Minister, what can I do?” he said, pointing out that the health sector had a drugs shortage and that duration of the Indian credit line–already extended–will expire in March.
The Sunday Times asked the SLCPI for a response. It said that registered pharma companies participated in “most of the tenders” but in some cases (five to 10 percent), “due to long payments delays by the SPC and one-sided tender clauses”, certain companies refrained.
To solve the impasse, the Chambers suggested that a meeting be held with registered pharma suppliers “with specific objectives to iron out the present challenges, such as the non-practical tender procedures and payment plan of the old dues”.
Another glaring reason for suppliers’ increasing lack of interest in health sector tenders is “systemic and systematic corruption”, the representative of a leading pharma company said.
“They are jaded after being exposed to all the corruption over the years,” he pointed out. “And with so much attention on corruption now by the IMF and other agencies, it is time to introduce a procurement process –perhaps aided by the World Bank–where politicians cannot interfere and where professionals guarantee the best results to the benefit of the industry and the public. Transparency is imperative.”
Tellingly, Minister Rambukwella revealed that the ADB which recently passed funds for emergency medical supplies to Sri Lanka does not allow the Health Ministry to handle the procurement. The Sunday Times found that the World Bank adopted the same policy.
“They do the order, procurement, all…they do it,” he said, adding that this takes around six months. “They tell us to give a list. Sometimes when we give a list, they say these are not necessary.”
And, coincidentally, doctors pointed out this week that several of the drugs to be bought from the two Indian companies are classified as “non-essential” by the MSD (although Cabinet approval was obtained on the grounds that all purchases would be of “essential” drugs). They include Erythromycin syrup, Montelukast 5mg chewable tablets and Cephalexin (antibiotic) dispersible tablets to be obtained from Kausikh.
It was also questioned why the Ministry has ordered 250,000 injections of Enoxaparin injections (a relatively high-cost anticoagulant) from Savorite when Cabinet approval was only recently obtained for a million of the same injections using the Indian credit line. In both 2018 and 2019, the annual requirement for the drug had been less than 500,000 vials.
Separately, the official database shows that there were 1.8mn tablets of Cefuroxime (antibiotic) 500mg available in MSD stores as of Thursday. But it is planned to buy 1.125mn more Cefuroxime tablets from Kausikh. The average three months’ consumption of the drug for 2018 and 2019 was 968,670 tablets.
It is further anticipated to obtain 300,000 Montelukast 5mg (an anti-inflammatory drug that treats allergies and prevents asthma attacks) from the same company. MSD currently has 431,610 tablets in stock–more than the quantity used in all of 2019.
Cabinet approval and
President’s observations
Minister Rambukwella maintained that the Cabinet and the President, as Finance Minister, approved letting selected suppliers sell drugs to the Ministry on the basis of unsolicited proposals; and for the Ministry to use not only the Indian credit line but other funding sources to tide over prevailing shortages.
However, President Ranil Wickremesinghe’s consent has provisos which, when interpreted, do not indicate overarching approval as the Health Minister had implied.
For instance, Mr. Wickremesinghe says in point ‘b’ that the “Ministry of Health should follow the procedures which are applicable for private sector pharmaceutical suppliers who import drugs on behalf of the State Pharmaceutical Corporation under the Indian Credit Line Scheme for the proposed supplier”.
The SPC website shows only one method under which drugs could be bought under the ICL. In summary, it requires a separate expression of interest from a supplier for each drug, to be submitted with NMRA registration. A supplier without NMRA registration may be selected and a waiver could be considered based on price but there are no provisions for unsolicited proposals in the SPC guidelines.
In point ‘c’, the President also says that the Ministry and the proposed supplier must enter into an agreement regarding prices and quality of drugs before the importation. It could not be immediately verified if this had been done in the case of Savorite.
And in point ‘d’, the President says that “if there are any private sector supplier [sic] who comes under unsolicited basis to provide medical supplies under the Indian Credit Line, the Ministry of Health should follow the process of a, b and c above for them. Further, if funds utilize [sic] other than the Indian Credit Line, the appropriate Procurement Guidelines should be followed by the Ministry of Health.”
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