Flaws in purchase of drugs: CAG

Published: 15th February 2013 10:09 AM  |   Last Updated: 15th February 2013 10:09 AM   |  A+A-

Procurement of drugs with a low shelf life, storage of drugs and IV fluids in garages and toilets and buying drugs at much higher prices than the current prices - these were some of the observations made by the Comptroller and Auditor General of India (CAG) on the Government of Karnataka (General and Social Sectors) for the year ended March 31, 2012.

The report, tabled in the Legislature on Thursday, has observed that the tender evaluation by the Karnataka State Drugs Logistics and Warehousing Society was flawed in many cases as many non-responsive tenders had been considered responsive and drugs had been procured from these non-responsive sources during 2010-11.

“Drugs procurement lacked planning, resulting in chronic delay in finalising the rate contracts for supply of drugs. While the rate contracts for 2008-09 had been finalised only in March 2009, those for 2009-10 had been awarded only in October 2010. This resulted in non-availability of sources for procurement of drugs during the period March 2010 to October 2010.”

The report further said, “The cost of drugs procured directly from the Karnataka Antibiotics and Pharmaceuticals Limited (KAPL) during 2008-12 against exemptions granted by the government under the Karnataka Transparency in Public Procurement Act were high. The exemption lacked justification as the rates charged by KAPL had been far higher than those at which other state governments had been purchasing these antibiotics during the corresponding period.

During 2008-12, out of Rs 111.14 crore paid to KAPL to purchase of 17 of 42 drugs, Rs 55.44 crore represented the higher cost paid when compared to the rates paid by other state governments.”

The report stated, “Procurement of drugs, especially IV fluids, had not been based on estimates of actual need and drugs had been procured far in excess of requirement, creating storage problems in the warehouses and health institutions. These excessively procured drugs had been stored in garages, toilets, corridors in health institutions. Further, 7,223 drugs worth Rs 15.82 crore had been procured with shelf life of less than 80 per cent and 1,024 of these had shelf life of less than 50 per cent. Another 87 drugs costing Rs 35.30 lakh had a shelf life of less than 90 days.”

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