June 19, 2018, 4:29 pm
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COA: 690% overprice found in Pampanga meds purchase

GOVERNMENT auditors have reported numerous anomalies in the medicine procurement of the provincial government of Pampanga in 2017, including overpricing of over-the-counter and prescription drugs ranging from 3.41 percent to a whopping 690.08 percent compared to prevailing market prices.

Based on the audit report released last April 17, Pampanga’s procurement of drugs and medicines from January to August 2017 amounted to P61.36 million.

All these were acquired through consignment arrangement with a few suppliers and were earmarked for distribution to 11 district hospitals run by the province.

At an exit conference between provincial officials and members of the audit team, the Pampanga Provincial Administrator agreed to comply with the observations.

On the other hand, the Provincial Health Office chairperson was asked to investigate the finding on overpricing and to address the issue in future transactions. 

Auditors were able to compute the rate of overpricing by conducting a price canvass in four leading drugstores in the City of san Fernando, Pampanga. These were Mercury Drug, Manson Drug Corp., The Generics Drug Pharmacy, and Southstar Drugstore.

“The items canvassed were of exactly the same brands/item description provided in the consignment order. The prices of at least 26 drugs and medicines acquired through consignment were still higher by 3.41 percent to 690.08 percent than the prevailing market prices,” the Commission on Audit said.

It warned the provincial government that higher prices of consignment medicines violate the Department of Health’s Administrative Order No. 2006-039 and defeats the objective of providing readily available quality medicines to poor constituents at affordable prices.

The biggest price jack-up was reported in azithromycin 500mg (brand name Zithromax) which was acquired on consignment at P1,195 each against the prevailing market price of only P151.25.

Also listed with high mark-ups were methimazole 5mg tablets (Tapdin) at P15 each but sold by local drugstores at only P6.75 or a difference of 122.22 percent; and Febuxostat 80mg tablets at P68 each although available in popular pharmacies at only P31.50 or a cost discrepancy of 115.87 percent.

Auditors noted that the consignment cost does not even include the add-on cost when purchased by patients from the district hospitals.

“With this, the province was again placed in a disadvantageous situation on its consignment transactions. As a result, the Province was no able to avail of reasonable prices,” the COA said.

Review by the audit team of consigned drugs likewise showed items totaling P4.68 million that were not included in the Essential Drug List of the Philippine National Drug Formulary (PNDF).

It said the process violated the DOH Administrative Order No. 2006-039 which states that only drugs listed in the PNDF may be considered for consignment system.

Those not on the list may still be considered for consignment but only by prior approval of the Formulary Executive Council.

“Verification of payments totaling P61,359,632.94 of consigned drugs and medicines from January to August 2017 showed that some …were not in the Essential Drug List. Procuring drugs and medicines not included in the list would not give the government the assurance (of) good quality and essential drugs at reasonable prices,” the COA noted.
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