News
SC suspends import of drugs from unregistered Indian company
View(s):- Serious doubts about the quality, safety and efficacy of the drugs
By Namini Wijedasa
The Supreme Court has suspended the importation of medicines from a private Indian supplier under the Indian credit line (ICL) stating that serious doubts had arisen regarding the quality, safety and efficacy of the products bought from Savorite Pharmaceuticals (Pvt) Ltd.
The Court also granted leave to proceed in the relevant fundamental rights petition filed by Transparency International Sri Lanka (TISL) against Health Ministry moves to buy medicines from two private Indian companies–Savorite and Kausikh Therapeutics (P) Limited (KTL)–through unsolicited proposals, bypassing regulatory oversight.
The three-Judge bench led by Justice Murdu N.B. Fernando, PC, and comprising Justices Yasantha Kodagoda, PC, and Achala Wengappuli, said there were questions regarding the lawfulness of the impugned procurement transaction.
The Court granted two interim reliefs. It suspended the future importation of pharmaceuticals from Savorite without obtaining a further order–on the proof that quality and safety requirements have been met and the procurement was lawful–from the Court.
The Court ruled that two consignments already in Sri Lanka could be released for use only after necessary testing and after the National Medicines Regulatory Authority (NMRA) gave its independent assurance of their safety, quality, and efficacy.
The Sunday Times has, since December last year, written about Health Ministry attempts to use the ICL to buy drugs from locally unregistered, handpicked Indian companies, bypassing NMRA approval or vetting, citing “urgency”. One of these entities is Savorite.
Itw was revealed in open Court this week that Savorite, a first-time seller to Sri Lanka, had walked into the Health Minister’s office on October 19 last year with a long list of medicines that it offered to sell. The Ministry Secretary was also present.
Thirty-eight items were subsequently identified for which the NMRA chief executive officer (CEO) granted “waivers of registration” on the same day that the Health Ministry requested such waivers from him. Of the purchased items, two have already arrived.
In early December 2022, Health Minister Keheliya Rambukwella sought Cabinet approval to buy drugs using the ICL and “other sources of funding” from a second Indian entity named Kausikh Therapeutics. Later that month, the Minister and the NMRA CEO went to India on a three-day factory visit at the company’s invitation.
Kausikh was found to have been blacklisted by State Pharmaceuticals Corporation over questions regarding some batches of medication. The Attorney General’s Department informed Court that the Health Ministry would not pursue a contract with that company. However, Kausikh remains a respondent in the ongoing case.
The action was filed in the public interest. Representing the petitioner, lawyer Senany Dayaratne submitted to Court that the Cabinet had approved the purchases on the premise that there were zero stocks available and that the procurement was urgent. An impression was created that the acquisition of NMRA-approved medicines was to be done through Savorite and “other selected suppliers”.
But the procurement pertained to just Savorite and medicines that were not registered with the NMRA. Cabinet had therefore been misled, Mr. Dayaratne claimed, and approval was granted for a completely different purpose in the context of the urgent purchases that were made.
Mr. Dayaratne referred to the Finance Minister’s written observations to the Cabinet. It said that, if the medicines were to be procured on an unsolicited or single-source bid using the ICL or other funding sources, the applicable procurement guidelines must be followed.
The Counsel took up the position that procurement guidelines had not been adhered to. The State posited that what was relevant was a Finance Ministry circular of June 2022 allowing for emergency health sector purchases. But Mr. Dayaratne countered that this was a vague process that was not stringent; and that the 2006 procurement guidelines continued to apply as they had not been repealed.
Separately, the only entity with constitutional power to formulate and promulgate such guidelines was the National Procurement Commission and that had not been done, Mr. Dayaratne argued.
The shortage now being claimed by the Health Ministry was “essentially due to the mismanagement and ineptitude of the officials concerned”, he said. These do not come within the contemplation of the 2006 procurement guidelines as justifying emergency or urgent procurement. Therefore, the Health Ministry could not resort to the extraordinary measure of relying on a single-source supplier.
The Health Ministry could not or should not have procured through Savorite, which, among other factors, was not registered domestically and had not previously supplied to Sri Lanka. There was no demonstration as to how it was selected to the exclusion of everyone else.
Mr. Dayaratne also said the NRMA CEO could not have granted waivers of registration because he was not the statutory party vested with the power of waiver. It is vested in the Authority and its Board. The law does not provide for the delegation of this exceptional power. In any event, Mr. Dayaratne said, there was no documentary evidence that it had been transferred to the CEO.
The CEO granting the waiver of registration on the very date that it was requested by the Health Ministry is “extremely suspicious” and also contrary to law.
Deputy Solicitor General Nirmalan Wigneswaran appeared for the respondents except for the two Indian companies. He maintained there was a genuine urgency created by the drug shortage that was clearly not due to corrupt practice. There were weaknesses, he accepted, but not by design.
The principal reason for the shortage was the exchange crisis and the inability to procure these medicines through ordinary procurement and payment methodologies. The ICL process was cumbersome and there were not enough people willing to go through it.
The Health Ministry had sought to procure some of the required medicines through expressions of interest called for on September 27, 2022, Mr. Wigneswaran said. Some companies had responded and certain medicines were bought but not sufficient numbers of the other drugs. The Health Ministry was compelled to resort to these extraordinary measures because the ICL had been about to expire, at that point in time.
The procurement guidelines relevant to the process were the June 2022 Finance Ministry circular which permitted a departure from the 2006 procurement guidelines and the normal competitive process, Mr. Wigneswaran asserted. The Ministry received the unsolicited bid from Savorite through the proper channels. After it was properly evaluated in terms of price and quality, and given the circumstances, it was decided that it was in the public’s best interest to buy medicines from Savorite.
The waivers of registration had been carried out legally in view of the authority held by the NMRA Board to delegate power to the CEO, Mr. Wigneswaran said. There was no illegality.
If there were any concerns about the quality and safety of the drugs, the Health Ministry was willing to ensure they received certificates of quality and safety via third-party testing.
Attorneys-at-Law Nishadi Wickramasinghe, Sankhitha Gunaratne and Lasanthika Hettiarachchi also appeared for the petitioner.
The best way to say that you found the home of your dreams is by finding it on Hitad.lk. We have listings for apartments for sale or rent in Sri Lanka, no matter what locale you're looking for! Whether you live in Colombo, Galle, Kandy, Matara, Jaffna and more - we've got them all!