Disregarding rate contract, GMSCL orders medicines worth crores

Updated: Jun 12th, 2024

Medicines

A government body has allegedly caused a loss of over ₹2 crore to the government exchequer by procuring medicines at the old rate after expiry of the rate contract and extending the old contract of the supplier.

Gujarat Medical Services Corporation Limited (GMSCL), which is responsible for procuring medicines for government hospitals in the state, placed an order for 9.5 crore paracetamol tablets on June 11. It has been decided to procure 80 crore of these tablets for the year.

After the contract expired in January, the corporation had extended the old rate contract to the supplier company until November, allowing them to supply medicines at the old contract rate. This order is alleged to have incurred losses worth over ₹2 crore to the government treasury.

Currently, these medicines are said to be available in the market at a 45% lower price.

Currently, 1,000 tablets of paracetamol medicine are available in the market for ₹250. In contrast, GMSCL has paid ₹495 for this lot.

In general, the practice for procuring medicines for government hospitals is to invite tenders and procure the best quality medicines at the lowest cost.

When asked about the delay in opening the tenders launched in January, GMSCL’s Managing Director (MD) Ganga Singh said, “The time has not yet arrived for the tender launched in January.”

Responding to a question about paracetamol being available in the market at half the price of the old rate contract, he said, “You provide evidence for that.”

Compared to Gujarat,  the Odisha Medical Services Corporation Limited and Rajasthan Medical Services Corporation Limited are procuring the paracetamol lot of 1,000 tables for ₹298 and ₹293 respectively. Odisha and Rajasthan have already issued and approved their tenders a short time ago, and these contracts have been approved after January.

As the circumstances stand, GMSCL seems to be reluctant to procure medicines at lower prices. The medical services body floated fresh tenders in January to procure paracetamol and other medicines, but those tenders have not been opened yet.

When asked about the delay in opening the tenders, IAS Ganga Singh said, “The tenders will be opened when their turn comes.”

An official involved in the medicine tendering process said, “When the prices in the market have fallen, the heads of the respective departments usually do not not extend the old contract. Instead, the opposite is happening here.”

The responsibility of placing medicine orders for GMSCL lies with deputy general manager Hitesh Prajapati.

Purchasing lapses for essential tablets

To overcome iron deficiency, iron-folic tablets are prescribed. The rate contract for these tablets, which are being purchased under code number 1379, is ₹153.70 for 1,500 tablets.

Instead, the medicine is procured from Hindustan Laboratories for a price of ₹190.31 for 1,500 tablets.

Despite being available at a lower price, an order for 48,890 boxes of 1,500 tablets each, costing over ₹93.31 lakh, has been placed. This has already been brought to the attention of Health Minister Rushikesh Patel.

As many as 1,000 tablets of iron-folic tablets under code number 1378 are being purchased at a price of ₹126.87 per packet from Hindustan Laboratories. On the other hand, generic medicines of similar quality that offer 1,000-tablet packets are available at ₹103.80 per packet.

An order of over 1.45 lakh boxes of 1,000 tablets each of this medicine, costing ₹1.84 crore, has also been placed.

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