MANILA, Philippines - The Commission on Audit (COA) has advised the provincial government of Pampanga to stop buying medicine through consignment.
“The price difference between the consignment order’s unit cost and the prevailing market price ranged from 9.40 to 689.82 percent, contradicting the purpose of institutionalizing the consignment system... as stated in Sangguniang Panlalawigan Ordinance 463,” state auditors said in a 2015 report released recently, citing 32 drugs procured through consignment last year.
Records show that the provincial government makes consignment arrangements in procuring medicine for its 11 district hospitals.
COA said Department of Health Administrative Order 2006-039 states that the price of consigned goods should not be higher than the selling price of essential generic drugs and medicine procured through the DOH-Philippine International Trading Corp. parallel importation scheme or the prevailing market price, whichever is lower.
The price of consigned medicine should be lower even with markups by hospitals compared to private outlets, the order states.
“This situation may provide healthy competition with private retailers and may prompt them to lower drug prices as well,” state auditors said.