Region 4 paid $33.7M extra to procure drugs from outside suppliers

The Regional Administration of Region Four (Demerara-Mahaica) paid over $33.7 million more for the supply of drugs, from outside suppliers, during the year 2020, according to the Auditor General’s report.

“A comparison of the prices paid for drugs and medical supplies procured by the Regional Administration from local suppliers with that of the prices paid by MMU (Ministry of Health’s Material Management Unit) as indicated on the price listing submitted, revealed that for twenty-three items the Regional Administration paid significantly higher prices when compared with MMU’s prices. Furthermore, the Region paid in excess of 200% more than MMU’s prices for eight of the twenty-three drugs and medical supplies purchased,” the AG’s 2020 report stated.

The Region paid $6,000 for a roll of 90cm* 91m gauze while the MMU paid $2,214 which is 168% higher. They procured 334 rolls of the gauze overpaying $1.5 million.

Region 4 paid $6,000 for a 70/30 vial of insulin which was procured by the MMU for $1,444. That means the Regional Administration overpaid $5.2 million on the 1,160 vials of insulin they bought.

The AG recommended that the Regional Administration ensure items needed are not available at the MMU for supply before such items are purchased while urging the Region to adhere to the Procurement Act.

With 31 functional health institutions inclusive of two hospitals under Region 4’s control, the AG is urging better systems to be put in place for the efficient management of procurement and disbursement of drugs. According to the AG’s report a physical verification exercise conducted on May 02, 2021, of a sample of 112 drugs and medical supplies at Diamond Diagnostic Centre, Dr CC Nicholson Hospital, St. Cuthbert’s Mission Health Centre and Plaisance Health Centre revealed that there were 9 instances whereby the physical stock was less than the ledger; and 11 where the physical stock was more than the ledger.

In explanation, the Head of the Budget Agency indicated that Drugs and medical supplies were administered to patients and these were not subtracted from the ledger and similarly items were collected but not updated while promising to commence updating the ledgers to reflect the accurate information.

Additionally, the AG found that the cost of drugs expired was not recorded at the Expired Drug Registers at 27 of the 31 health institutions. He estimated the cost to be in the vicinity of $34.921 million for the approximate 1,427 expired items.

“Also, there were instances where the duplicated copies of expired drug lists kept by the health institutions were not always visible. Thus, it was difficult to ascertain the type and quantity of expired drugs on hand,” Auditor General Deodat Sharma said in his report.

He recommended that the Region undertake a survey to determine the realistic needs of pharmaceuticals and other medical supplies required at the medical institutions while adding that they should ensure the proper storage of drugs and medical supplies in order to reduce losses through expiration and improper storage. The AG also urged the region to have mechanisms in place to properly dispose of all expired drugs in accordance with the Regulations of the Food and Drugs Department.

The Regional Administration did commit to endeavouring to honour the AG’s recommendations.