Thursday, March 23, 2023

CMS supplies fall behind schedule by more than a year

The current shortages of vital medical drugs and others at public health facilities countrywide may persist for a long time to come.

The reason for the crippling drug shortages experienced at hospitals and clinics throughout the country is blamed on the ailing Central Medical Stores (CMS) Procurement processes.

It all began from the time when Dave Terpstra was the Procurement Director in 2010. He is not alone in taking the flak. The current Tendering Head (Procurement), Minenhle Mhlanga, is also said to have a hand in the sorry procurement mess at the CMS.

Both are accused of giving preferential treatment to foreign companies, especially Denmark-based Missionpharma A/S to the detriment of local companies with a history of supplying drugs to the CMS.

This is said to be the root cause of the current drug shortagess experienced throughout the country.
Industry sources allege that both Terpstra and Mhlanga have always made it impossible for the CMS to award tenders to local bidding companies to the exclusion of their Denmark-based favoured company – Missionpharma A/S ÔÇô which is not a drug manufacturing company and no different from local ones. Sources also allege the Danish company actually buys some drugs from neighbouring South Africa before reselling them to Botswana at exorbitant prices.

Insiders at CMS who have had frustrations with the Procurement Director have corroborated the story as told by industry sources and revealed to the Sunday Standard that the non-availability of vital drugs and the delay in the supply of other drugs happens because Perpstra would first request the Denmark-based company of its ability to supply drugs before awarding tenders. In case the company is unable, sources say the CMS would be forced to wait for months until the company is ready to supply drugs.

Terpstra has not responded to a written enquiry from this publication regarding the allegations above.

The Sunday Standard can, however, reveal that Missionpharma A/S has, to date, failed to supply thousands and thousands of quantities of medical drugs after they had been given at least 50 orders by the CMS. The orders were given to the company between October last year and August this year. For instance, a consignment of drugs which was ordered on 3 October 2011 and due to be delivered on 26 December 2011 has still not been delivered. Many more others have also not been delivered. This is despite the fact that that government pays Missionpharma A/S through a Letter of Credit.

The company, it is alleged, gets to be awarded tenders ostensibly on the basis of its financial strength. The reasoning has not convinced the CMS Biomedical Engineering Superintendent, Peter Kuate, who has serious differences with the Tendering Head (Procurement).

The Biomedical Engineering Superintendent argues that financial strength is not a guarantee to supply drugs timely further arguing that at any rate it disadvantages local pharmaceutical companies.

The Sunday Standard has seen copies of e-mail correspondences of Friday 10 august 2012 between the CMS Tendering Head (Procurement) and the Biomedical Engineering Superintendent Peter Kuate showing clear differences between the two over which companies must be invited for request for quotations (RFQ).

The exchange happened after Kuate was not comfortable with in Mhlanga’s insistence to exclude some local companies from the RFQ on the basis of financial strength which Kuate argued does not guarantee that a company would supply drugs timely as is the case with Missionpharma A/S.

Kuate to Mhlanga:

“I have gone through the ITT [invitation to tender]. I have been part of ongoing tender evaluation and this clause has qualified a lot of companies as such reduce competition. The Ministry of Health or government shall lose money unnecessarily. Let us save government money by promoting competition .This is an RFQ [request for quotation] and we do not have to be too strict as on tender. I don’t see how this [financial strength] adds value to the quality and delivery of the products even on tender I feel the same. Most companies, especially international companies, use L/Cs [Letters of Credit] and do not necessarily use their financial strength to get L/Cs. The same companies would still fail to deliver on time irrespective of their financial strength. The financial strength will exclude new and other companies. This does not necessarily mean that they are not capable since government has opened this to any company.”

Mhlanga to Kuate:

“We do not accept anybody to be awarded [tenders] beyond their financial strength. You start crawling, walk and then run. You do not just accommodate bidders for the sake of it, that is why there is a criteria for every ITT [Invitation to Tender] PPADB[ Public Procurement and Asset Disposal Board] has endorsed [this]because of the reasons which we have presented so I have re-instated it…leave such decisions to a procurement specialist. Just that you are in the evaluation does not mean you should disclose the evaluation process.”

The heated exchange above and the alleged relationship between Terpstra and Missionpharma A/, the basis upon which it is built remaining unclear, has not only become detrimental to the health of thousands of Batswana who desperately need drugs but also threatens the very existence of local pharmaceutical companies with a history of supplying drugs to the CMS.

The PPADB spokesperson, Ditapole Tsheboeng, told the Sunday Standard that tenders are always evaluated, adjudicated and awarded in accordance with the pre-determined criteria stated in the tender documents availed to all those interested in participating in the tender.

“Section 38 of PPAD Act provides that evaluators and adjudicators shall take into account in ranking, recommending, adjudicating and awarding bids financial capacity of the bidders.
Furthermore, Regulation 39 provides that a bidder’s ability to meet the required qualification shall form part of an integral part of the evaluation process. Therefore the award is based on the pre-determined evaluation criteria that may include financial capacity,” said Tsheboeng.

One of the concerns raised by local pharmaceutical companies is that Missionpharma A/Shas provided substandard drugs which have since been recalled from CMS facilities.

To this end, some local pharmaceutical companies known to this publication have raised complaints with the Public Procurement and Asset Disposal Board (PPADB) Executive Chairperson Poppy John regarding the manner with which foreign companies such as Missionpharma A/S were selected for CMS’s new selective drug tenderPR11/3/2/10-11 worth over P100 million. Tsheboeng has confirmed such.
“Indeed a number of local pharmaceutical companies raised their objections to the award of tender award by PPADB, alleging unfair procurement practices at CMS, in particular that the method of procurement used to select the supplier was unjustified and therefore unfair to local suppliers, that the Department of Central Medical Stores was paying exorbitant prices for the drugs thus wasting tax payers money, and that the quality of the drugs supplied was below acceptable standards of quality,” said Tsheboeng.

She said the PPADB “took the allegations raised very seriously” and conducted a Tender Audit to determine whether there was any legitimacy in what was said.

“A comprehensive audit was undertaken which in summary revealed that the allegations raised were unwarranted. The investigative audit addressed in detail the issue of overpricing, the quality of the drugs, as well as the legitimacy of the procurement strategy adopted at the Central Medical Stores (C.M.S)” she told the Sunday Standard. According to the PPADB spokesperson, the findings of the Audit were that the procurement model adopted by CMS was implemented in a satisfactory manner.

The PPADB also said that the audit revealed that the model brought about cost savings and an improvement in the vital drugs supply chain management system something which is strongly contested by local companies and insiders at CMS.

“The findings of the audit were communicated to the complainants and the matter has since been settled,” she said.

While the PPADB claims all is well at CMS, the Sunday Standard can reveal that on 13 July this year by way of a letter reference number MS100/10/04 III, Glucose 5 % Infusion 1000ml drug supplied by Missionpharma A/S was recalled from the CMS facilities thus confirming complaints of below standard quality of drugs supplied by Missionpharma A/S as raised by local pharmaceutical companies. The drug is manufactured by Marc Biosciences Ltd with batch number: 20110047. The complaint raised with the product is that it has fungal growth. It is feared that patients may have already been infused with the solution. It was not possible to reach owners of Missionpharma A/S in Denmark.


Read this week's paper