The finance department of the Ministry of Defence (MoD) has turned down the contract to outsource medicines for the Services to private companies, which was cleared by Defence Minister A K Antony.
The decision has triggered a turf war with the department of Ex-Servicemen Welfare (ESW) with the latter accusing the finance department of shooting down a reform process, which would have strengthened the delivery of quality medicines to Army hospitals. The MoD finance claims that the entry of private players would increase the taxpayers’ burden as the latter could easily manipulate the supply process.
“It is clear that the outsourcing of pharmacies in ECHS is a progressive reform which will not only enhance clientele satisfaction but also lead to savings for the government,” an ESW March 15 note stated adding that the contract to private vendors could save approximately `90 crore for government exchequer as it would stop the leakages. “Once the pharmacy operation has been outsourced, the choice of medicines to be prescribed will be that of the pharmacy vendor and the concerned doctor of the ECHS clinic. It is doubtful if any doctor left to himself will prescribe generic medicines and preference would be generally given to branded medicines. The discount for such medicines is lower,” finance department wrote in response.
It further stated that under the present system, government avails 62 per cent discounts on medicines from companies while private vendors mentioned a discount of only 27 per cent. “It is not clear how a discount of 27.75% would achieve a higher saving than a discount of 62% which is against any mathematical wisdom,” MoD finance responded to the ESW department adding that the urgent steps need to be taken to improve the performance of existing system.
The Sunday Standard