News
Report reveals several top health officials were involved in massive drug racket
View(s):By Namini Wijedasa
The procurement system includes the Health Ministry’s Pharmaceutical Production, Supply, and Regulation Unit (PSRPU), its Medical Supplies Division (MSD), the National Medicines Regulatory Authority (NMRA), and the State Pharmaceutical Corporation (SPC).
The report, seen by the Sunday Times, adds to mounting evidence against key health sector officials. Its findings have confirmed the abuse of public funds. Separately, facts continue to be reported by police to the Maligakanda Magistrate’s Court regarding the questionable procurement of drugs and medical devices in 2022–23. However, charges are yet to be filed in the magistrate’s court, while indictments in the High Court too are pending.
The report has looked into the former Health Ministry Secretary’s role in questionable purchases as head of the Health Sector Emergency Procurement Committee (HSEPC) and in his position as Secretary; and the contribution of two former top-level employees of the SPC and NMRA who also served in the HSEPC. Pic by Akila Jayawardena
The inquiry report is significant because it brings to light the actions of a host of public sector employees in responsible positions. Their involvement in corruption and malpractice usually goes unnoticed and often unpunished.
Mounting evidence
In December 2022, the Sunday Times first started reporting about the severe risks of unregulated medical sector purchases. But action was only taken by law enforcement after September 2023, when it was discovered that medication for which the Health Ministry had paid at least Rs. 144mn was fake. For instance, subsequent Court-ordered lab tests proved that the human immunoglobulin vials contained “no detectable” immunoglobulin.
The Health Ministry inquiry recommends disciplinary action and work suspensions against a large number of senior officials, including one top position-holder to whom it attributed a litany of wrongdoings such as multiple violations of national procurement guidelines.
This official is accused of bypassing NMRA-registered suppliers to favour unregistered ones and of leaving room for the distribution of substandard medication across hospitals through his actions. He is incriminated in causing the incorrect use of Rs. 144mn in public funds and in issuing a circular instructing the MSD to settle suppliers participating in “urgent procurements” within 45 days, decreeing the Health Ministry to pay a penalty to them if that fails.
The inquiry report also recommends disciplinary action against several others for having ignored critical national procurement guidelines and authorised payments. It reveals that an order was submitted for 22,500 vials of immunoglobulin despite a supplier selected through legitimate means having already submitted pricing for a 7,500-vial consignment.
Medicines were bought using the expressions of interest (EOI) system, outside of national procurement procedures. The waivers of registration (WoR) that were issued had not been properly examined. (WoRs allow drugs and medical devices to be waived through without proper regulatory oversight.) It had also not been detected at the time they were submitted that some WoRs were forged. Payments for both immunoglobulin and rituximab were passed notwithstanding the submission of such fake documents.
The inquiry finds that a senior NMRA official created a mechanism called the “special pathway” to issue WoRs for the urgent procurement of medicines—and that instead of obtaining NMRA Board approval for it, sent it directly to the Health Ministry Secretary for validation. Instructions were then given to grant WoRs without obtaining the relevant supporting documentation from medicine suppliers, merely based on an application for a waiver.
The official also ignored instructions from the NMRA Board to suspend the issuance of WoRs, thereby exposing the public to substandard medication. When the Board halted the provision of waivers through the special pathway, he sent a letter to the Health Ministry Secretary seeking permission to continue with it, the inquiry report states.
A senior MSD official is accused of not revealing how many medicines were in stock in the national health sector network and not just the MSD, what had already been ordered, and what was due to be delivered (from earlier orders) when drawing up the list of items that needed to be purchased. Nonessential items were also included.
Explanations required
The inquiry report recommends that explanations be called from a host of others, including an NMRA management assistant who sent WoRs and related documents to the suppliers or SPC officials without presenting them to the designated authorities.
It highlights the actions of three other health sector management assistants and also recommends that they be questioned about vouchers that were meant to be attached to WoRs—but were not. It recommends that the chief financial officer be instructed to take action regarding the monetary loss incurred by the government through these “emergency” purchases under the relevant financial regulations.
The report has looked into the former Health Ministry Secretary’s role in questionable purchases as head of the Health Sector Emergency Procurement Committee (HSEPC) and in his position as Secretary; and the contribution of two former top-level employees of the SPC and NMRA who also served in the HSEPC.
Accordingly, the inquiry points to how the EOI method was cleared to be adopted without “any legal basis”. It calls attention to how prices were requested under the Indian credit line but how payments were made using other public funds. It reveals that officials had not obtained the relevant approvals, including from the Department of Public Finance, when choosing to bypass procurement guidelines and eschew tenders for medicines; and that payments to Isolez Biotech Pharma, the supplier of the falsified human immunoglobulin and rituximab, were prioritised.
The NMRA’s former chairman has been held responsible for the issuance of WoRs outside of the accepted procedure.
The report says the preliminary inquiry could find no evidence that Health Ministry officials had been involved in the creation of forged WoRs for the purchase of the two falsified medications. The owner of Isolez was in remand custody, and his statement was therefore not obtained.
The inquiry recommends that a committee be set up to consider the payment of compensation to patients who had received these medicines as the National Drug Quality Assurance Laboratory (NDQAL) has established that they were falsified. It also recommends tracing the recipients and giving them the necessary treatment.
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