NEW GPC requesting value-for-money audit by auditor general

– slams phantom prices, distortions, and lies of Kaieteur News

Health Minister Dr Bheri Ramsaran

The NEW GPC INC is calling on the Auditor General’s Office to carry out a value-for-money audit of the prequalification process that was conducted in 2010, beginning with the advertisement for expression of interest and including the evaluation and subsequent approval of submissions for prequalification to supply pharmaceuticals and medical supplies to Georgetown Public Hospital Corporation (GPHC).
The company has also warned that it will be pursuing all legal avenues possible to put an end to the malicious attacks against its principals and workers. The NEW GPC INC statement comes in wake of the fabricated and vindictive articles carried in the Kaieteur News within the past month – the latest one appeared in the newspaper’s Tuesday edition and alleged that New GPC INC had sold several drugs at exorbitant prices to the GPHC. The NEW GPC INC said that the latest article by the newspaper was totally false and a blatant fabrication, intended to harm the international standing of the company.
In a statement, NEW GPC INC said it is public knowledge that it was among certain other companies that successfully responded to an advertisement published on the government website on October 21, 2010 for prequalification to supply pharmaceuticals and medical supplies to the GPHC. It was an open process and the results were widely publicised, the pharmaceutical company emphasised.
“The company is, therefore, calling on the AG [Auditor General] to carry out the audit to determine if GPHC received value for money based on the criteria and other established benchmarks as set out in the prequalification process, to set the record straight and let the general public be aware of the facts.”
NEW GPC INC stressed that it is an internationally recognised pharmaceutical manufacturing company that continues to provide Guyana with quality healthcare products at very competitive prices:  “NEW GPC INC will, therefore, not sit quietly while the destructive forces attempt to undermine the company’s continued drive to provide excellent service to the people of Guyana and the international market. The company intends to pursue all available legal avenues to put a stop to this malicious attack not only against its principals but its workers also.”
Only recently, the NEW GPC INC was forced to clarify that its recent award of a Gy$1.1 billion contract to supply drugs to the GPHC, which sparked off Kaieteur News’ malicious attacks, was based on its status as one of two local companies that are prequalified to supply medication to the hospital. It also noted that the International Pharmaceutical Agency (IPA) failed a prequalification test carried out by the hospital in the latter part of 2010.
To prequalify, local and international suppliers of pharmaceuticals and medical supplies were required by the Health Ministry in 2010 to satisfy World Health Organisation (WHO) criteria including legal status; manufacturing capacity; warehousing capacity; licences to manufacture and import; quality control personnel, facilities and SOPs; previous experience in supplying pharmaceuticals; certification of products and suppliers (where products were not manufactured in Guyana); and financial capacity.
Apart from the NEW GPC INC, Health International Inc (HII) and one international supplier, two other local companies expressed interest: Medpharm Co and the IPA. Only Medpharm Co and NEW GPC Inc were duly certified and approved to join a list of established international organisations, including PAHO, IDA, WHO, UNICEF, UNFPA, and UNDP to supply pharmaceuticals and medical supplies to the government of Guyana.
“To NEW GPC’s knowledge and in keeping with the AG’s [Auditor General] recommendations, the MoH (Ministry of Health) has ever since been operating within this mandate. There were various media releases related to the positive economic spin-offs for the country; there are significant benefits to be gained from prequalified suppliers.
“There are significantly reduced lead times arising from closer communication between the MoH and the supplier. The supplier bears some of the responsibility for storage and stocking of materials, whether finished products or raw materials,” the statement said.

Masking the truth
On Sunday the government slammed Kaieteur News for “again publishing unfair information that seeks to give only partial information and misrepresent the truth”. The administration’s statement came in wake of an article in the newspaper’s Sunday edition headlined “Govt pays $1,909 for $80 cream”.  In its response, government said the truth is it has worked assiduously to ensure reliable supplies of medicines at the most affordable prices.
“Supplier quotations for a list of products are assessed as a package, the combined cost for the package. For example, we might request quotations for more than 400 products at a time. The common quoted products between suppliers are compared in terms of prices and the overall lowest price is accepted for the list. This is what happened on the last two occasions when ketoconazole were procured as one item of a list of items. This medicine was part of a large list and the overall cost for this list was lower through the NGPC. This was determined through the evaluation process of the National Procurement and Tender Administration Board.”

Auditor General (ag) Deodat Sharma

The government explained that item-by-item cost varies among suppliers, noting that while it does take into consideration cost per item, the overall cost for a list of items is critical for overall savings. Unless one item is overwhelmingly over-priced, “we prefer to keep them within the list”.
The government explained that in instances where the cost for one item is priced far too high, “we disaggregate out the items where the quoted prices are too high, and remove them from the list. But often another supplier will not want to supply just one or two or a small number of items from the list, particularly when the amount requested is too small. In this particular case, the total amount requested was a small amount. In addition, the procurement manager requested that the particular item be airlifted in order to prevent a stock out.” In the same list of items, another medicine was quoted at a cost of one-third to 50 per cent of the regular price, but shipment was normal shipment.
The Kaieteur News never mentioned that as part of the procurement process, the specific supplier, NEW GPC, provides other items free of cost as additional service to the Georgetown Public Hospital Corporation (GPHC).
Based on the procurement for 2011, the free items will amount to about 10 per cent of the 2011 order quantity for certain high volume items. The medicines included as part of the free supplies in 2012, and at about 10 per cent of the 2011 volumes are cephalexin tabs, normal saline injections, amoxicillin tablets, amoxilclav tablets, amoxicillin suspension, dimennyhydrinate injection, rampril tablets, omeprazole tablets, atorvastatin tablets, depo provera tablets, ketoconazole cream, streptokinase injection, betasome cream, hydrocortisone cream and silsulfazine cream.
Distortion campaign
The Kaieteur News, as customary in its distortion campaign, also ignored that another benefit derived from the present system is the no-cost storage the government obtains from the NEW GPC.
Presently, the NEW GPC incurs cost of more than Gy$150 million annually to provide free warehousing for the ministry. Proper storage of medicines is critical. The truth is that the Health Ministry and GPHC do not and have never had the warehouse capacity to store all the medicines they have in stock. Even with a new warehouse, which is soon to be commissioned, the ministry would have a capacity for only 50 per cent storage of the stock of medicines, and other medical supplies it maintained as inventory.
“We must recall that the NEW GPC, as one of the requirements for prequalification, demonstrated that it had the capacity to store greater than 90 per cent of the annual supply that the public sector requires. As a supplier, the NEW GPC agreed to provide the warehousing need as a non-fee service.
“While someone can make a case in some instances that a particular medicine could have been obtained at a cheaper price, the truth is that, overall, the Ministry of Health has ensured that medicines are purchased at the lowest possible price. A comparison with the international reference prices for these goods would show that the Ministry of Health procures our medicine at an overall savings, compared to the international reference price,” the statement explained.