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Drug purchases: Fresh evidence reveals more details about Health Ministry’s fast-track deals
View(s):By Namini Wijedasa
It also reveals that decisions were made to buy medicines (bypassing registration) on the basis of proposals from private suppliers, even if consignments from previous orders were on the way.
Favoured treatment
Concealed within these tenders were the human immunoglobulin and Rituximab contracts that the Health Ministry gave to local supplier Isolez Biotech Pharma AG which claimed in official documents that raw materials would be brought from India—when no such thing happened. A third drug called Irinotecan was ordered but did not arrive.
It is still not clear just how many of the drugs commissioned through the emergency procurement method were actually through the Indian Credit Line (ICL)—or whether the credit line was used as an excuse to take in unsolicited proposals without raising suspicion.
Despite official documents claiming the Isolez purchases would be paid for using Indian credit, it remains unanswered how this could have been done if the products were not bought from India (as has already been proven).
But documents show that Isolez was a favoured party among certain officials in the Health Ministry. The Seeduwa-based company had for many years failed to secure Good Manufacturing Practices (GMP) certification from the National Medicines Regulatory Authority (NMRA). A trail of documentation issued under three NMRA managements shows that its manufactory was deemed unsuitable on multiple grounds.
After its application was again rejected in 2022, former Health Secretary S. Janaka Sri Chandraguptha wrote to the Chief Executive Officer of the NMRA in June this year, recommending and requesting the issuance of GMP licences and production approvals “under proper conditions” to Isolez “as initial stage for 03 numbers Trial Batch products (Salbutamol IV, Lidocaine IV, Tramadol IV) given NMRA approvals considering as a national requirement [sic]”. Certification was still withheld as the relevant NMRA pharmacists objected.
Preferred treatment was also evident in the awarding of multimillion-dollar contracts to Isolez. In November 2022, the Health Ministry placed an order for 22,500 vials of IV immunoglobulin 5g, even though a total of 40,702 vials of the same medication were received via a company named ABC Pharma between October 3 and December 29, 2022.
Nevertheless, Isolez was given the order as an “emergency procurement” and instructed by the Health Secretary to adhere to an agreed timeline and take all actions to “import” the drugs as quickly as possible. There was no evidence of such “imports” ever arriving.
Isolez delivered the first 100 vials of immunoglobulin to the Health Ministry only in May 2023, well after the deadline. Penalties for late supply were waived off on Mr. Chandraguptha’s instructions (he cited a Cabinet decision of April 2022 in respect of medicines and surgical devices arriving past the due date owing to “the sudden fluctuation in the foreign exchange rates”).
A new “special pathway”
Over 150 separate drugs were considered by the Health Ministry under the so-called “special pathway” that former NMRA CEO Vijith Gunasekara set in motion on September 2, 2022, according to documentation seen by the Sunday Times. (Around 40 of these were received, authoritative sources said.)
Dr. Gunasekara wrote to the Health Ministry Secretary, saying that the NMRA had organised an “internal fast-track pathway for WoR [waiver of registration] issuance for procurements related to various funding agencies approved by the Ministry of Health.” He said this was done under the NMRA Act’s Section 109, which pertained to the granting of WoRs.
But the special pathway that Dr. Gunasekara devised—and obtained NMRA Board approval for via a note—gave him the sole authority to issue WoRs. The law does not envisage a situation in which a single person takes over such power; it clearly states that “the Authority may grant permission…” and describes a set of special circumstances under which it may do so.
The former Health Secretary approved the usage of this “internal special fast-track pathway” to issue WoRs “when recommended by the Ministry.” This set in motion a process whereby a few officials of the Health Ministry and NMRA rubberstamped drug purchases while bypassing established tender procedures.
The Sunday Times repeatedly warned, alongside many medical and health experts, that this would open the floodgates to unsolicited proposals from unvetted, unregistered companies as well as create space for corrupt practices and financial misappropriation.
On September 22, 2022, the Health Ministry’s Additional Secretary (Production, Supply & Regulation of Pharmaceuticals) Saman Ratnayake wrote to D.R.K. Herath, the MSD’s Deputy Director General, instructing him to place three-month orders for drugs for which they had under one month of stocks—using the ICL and through private parties. He said this must be done through the State Pharmaceutical Corporation (SPC), which is the medical procurement arm.
MSD starts procurement
But four days later, Mr. Rambukwella submitted a Cabinet paper requesting permission for the purchases to be carried out through the MSD, which has no mandate to buy medicines. He justified it by stating that procurement through the SPC took time, that there were severe shortages of many drugs and medical devices, that the ICL would expire in December (it was later extended), and so on.
In early October, the Cabinet approved for MSD to carry out emergency purchases from “private sector import agents” under the ICL with NMRA sanction. It also allowed the Health Ministry pricing committee to decide on the tenders. There was no mention in the Cabinet paper of a Technical Evaluation Committee (TEC) which would have examined drug quality and other critical parameters relevant to public health.
On September 27, 2022, the Health Ministry published a document titled “Invitation for Expressions of Interest to import and supply of [sic] vital and essential pharmaceuticals to Sri Lanka under the Indian Credit Line for 3 months”. It had 188 items, including immunoglobulin and Rituximab.
The Ministry’s “Expression of Interest (EOI) Evaluation Committee and Price Reviewing Committee” appointed on October 26, 2022, had five members. It was headed by the Additional Secretary (Admin) of the Health Ministry. The others were the MSD Deputy Director, the Medical Officer (Procurement) of the Ministry, a Ministry Accountant and a Pharmacist from the MSD.
It was not a TEC. At no point did it, or any other committees set up in this regard, have specialist doctors with the expertise to decide on the suitability and urgency of the medication under consideration. A separate Tender Board, headed by Mr. Chandraguptha, approved each of these procurements without any form of technical evaluation having been done of the products they endorsed.
The Isolez bids were submitted by way of quotations starting October 3, 2022, and waved through by the Health Secretary and other officials. But the NMRA CEO later claimed that WoRs issued in his name for all three drugs ordered from Isolez were forged.
While the Isolez tender has received considerable attention—because it was glaringly bad—questions remain over a host of other orders placed with companies and the prices at which these deals were sealed.
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