COA report: Lapu-Lapu disadvantaged by procurement of drugs

CEBU, Philippines - The Commission on Audit (COA) found five procurement contracts for drugs and medicines of Lapulapu City Government totaling P3.5 million that can be obtained for only P1.8 million at the retail botica managed by the Department of Health (DOH).

Thus, the City lost the opportunity to save at least P1.6 million, the 2012 audit report said.

According to the report, the City of Lapu-lapu is persistent in acquiring its drugs and medicines requirement from local suppliers without first considering the availability of the items from the DOH retail botica established by the government.

The botica serves as a wholesale and distribution hub of low cost and quality medicines to retail drugstores or hospital pharmacies like the local government units, botika ng barangays, drugstores operated by the cooperatives, and community-based organizations.

COA said that although the botica cannot provide all the requirements of the City, as it sells only those items listed in the Philippine National Drug Formulary (PNDF), nevertheless, it would be advantageous to the City Government to procure available items which are much cheaper at the Botica.

The PNDF is an integral component of the Philippine National Drug Policy aimed at making available and accessible essential medicines of proven efficacy, safety and quality at affordable cost.

The essential medicines included in the PNDF list are selected with “due regard to public health relevance, evidence of efficacy and safety and comparative cost effectiveness.”

“The City Government, however, did not make use of such facility but preferred to procure its drugs and medicines requirement from private suppliers, using either mode of small value procurement or public bidding. Although the action of management is in compliance with the law, the results were not beneficial to the City,” read the audit report.

The City Health Officer explained that the City agreed with the intention of the audit observation as it is beneficial to the government, but emphasized that majority of the drugs needed by the City Government are not available in the DOH Botica, so that by directly making the purchase, will not eliminate the hassle of procurement and the conduct of public bidding in the acquisition of those items not available from said botica.

Some of the drugs purchased by the City of Lapu-lapu in the latter part of 2012 are reportedly even lower compared to the DOH Botica.

COA said the allegation that procuring medicines available at the DOH Botica will only cause so much delay because the facility has no ready stocks is not supported with proper documents and therefore, has no basis.

It said that the Bids and Awards Committee has not presented proof that the City of Lapu-lapu served a Purchase Request to the DOH Botica.

“The cost benefit analysis was not prepared and signed by BAC members and there were no costs mentioned therein, which could support the conclusion of the CHO,” it said.

 COA has recommended for the City to procure medicines which are available and cheaper at the DOH retail botica “to save and sustain well-meaning government initiated program/project.”

It further recommended that the BAC scrutinizes purchase requests on drugs and medicines and conduct market surveys at DOH retail botica and distributors/suppliers to obtain the most advantageous price for the City with due consideration to  the timely response to the needs of the hospital. — (FREEMAN)