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Govt continues to procure branded drugs even as it bats for use of generics

LiveMint logoLiveMint 14-09-2017 Teena Thacker

New Delhi: Generic medicines in India may have received a boost with Prime Minister Narendra Modi backing them, but his government’s own record in procuring such drugs for state-run hospitals is less than impressive.

Medical Stores Organization (MSO), the procurement unit for the ministry of health and family welfare, has not been able to source low-cost drugs for its beneficiaries over the last few years. In fact, it continues to buy expensive branded and patented drugs, ignoring its own directive for promoting the cheaper generics.

The MSO procures, stores and supplies medicines, surgical items and medical equipment to public health facilities.

It had floated tenders for procurement of generic medicines through its government medical store depots (GMSD) in Hyderabad and Kolkata in 2015 and 2016.

Of the total quantity covered in these tenders, comprising 820 generic drugs in both depots, only 152—or 19%—was procured.

Against that, the tender for procuring branded drugs was “well timed”, three people aware of the development disclosed, requesting anonymity. “The government procurement agency finalized the tender in 2015 and then again in 2017. In fact, a special tender for 22 medicines which contained nine patented drugs also received a go-ahead,” people cited above said.

For government-run hospitals and beneficiaries of Central Government Health Scheme (CGHS), procurement is done through a public tender that awards the contract to the lowest bidder.

In the tenders floated for procuring generic drugs by the MSO, only a select band of firms from across the country participated and bid for it.

“The ministry officials have turned a blind eye to these lapses and high costs, and are going ahead with procurement at the expense of the exchequer. There has been no focus to bring generic drugs. Branded drugs continue to remain the preferred choice of the government procurement agency over generics despite various announcements, incurring extra expenditure. Only select manufacturers are allowed to bid in these multi-crore tenders of the MSO. While the tender for procuring generic drugs has been put on the back burner, the MSO did not go slow in procuring expensive patented drugs,” added one of the three people, who asked not to be named.

Those familiar with the development alleged violation of procurement rules by the MSO during procurement.

“The buying of high-valued patented gliptins, which is a patented drug for diabetes, under the garb of generic drugs was in clear violation of procurement norms,” they added. Those privy to it also disclosed that even in the above-cited bids, the drugs were procured at a much higher price than the other drug procuring agencies within the ministry.

Bharat Singh, deputy director general, MSO, blamed “restrictive tender conditions” for the poor response to these tenders. “There were a number of issues which cannot be explained. For example, there are some companies which do not make generic drugs so we are left with no choice but to buy branded drugs. I can confidently say that due procedure was followed in the tender process.”

Navdeep Rinwa, a joint secretary in the health ministry, said, “I can’t make any comments on the tender process at this point of time. There is a formulary for generic drugs but I don’t have figures with me.”

The government has been pushing for generic drugs for a while, but the move gained momentum with Modi announcing plans to put in place a legal framework to ensure doctors prescribe generic medicines.

Earlier, the Medical Council of India instructed doctors to prescribe generic drugs as much as possible.

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