Plan for a state-run corporation for purchase, supply of medicines dropped

Haffkine Institute to purchase medicines, drugs for all state depts

Written by Sandeep Ashar | Mumbai | Published: July 10, 2017 5:39:49 am

The Maharashtra government’s plan for the formation of an independent state-run corporation for the purchase and distribution of medicines and drugs has been shelved. According to information, Chief Minister Devendra Fadnavis, who had last year announced plans for formation of the independent corporation, has instead approved a proposal to appoint the Centre-backed Haffkine Institute for the procurement of medicines. At present, four government departments — public health, medical education, women and child development and tribal development — issue both centralised and localised contracts for the purchase and supply of medicines.

For 2017-18, the state government has made a budgetary provision of Rs 550 crore for these contracts. Apart from these, various municipal corporations make localised purchases worth another Rs 600 crore. Last year, after allegations of irregularities and flouting of norms were raised in medicine purchase contracts worth Rs 40 crore, the chief minister had announced the formation of a unified authority in the form of a state-run corporation on the lines of the one existing in Tamil Nadu.

Contending that the current decentralised form of procurement was riddled with flaws and that there were several complaints regarding the pricing, supply and quality of drugs, Fadnavis had declared that the new corporation would bring in more transparency in medicine purchase. Also, the public health and the medical education departments, in particular, have been at constant loggerheads over the policy for awarding contracts. There have also been allegations over poor quality and short supply of medicine across departments. “The idea behind formation of the new unified authority was to formulate a single policy for medicine purchase and distribution,” said an official.

Sources said a proposal for the formation of the new corporation was formulated but was shot down after senior bureaucrats opined that it would involve high operational costs. “The government’s previous experience with state-run corporations has not been very encouraging. Rather than appointing another one, it was felt that granting powers to the Haffkine Institute would save time and costs. They (the institute) have the relevant experience,” said a senior government official.

The four government departments will now be directed to place their medicine requirement before the institute’s managing director, who is an IAS officer. The institute, which would be given additional staff for the procurement process, will purchase the medicines in a centralised fashion. Incidentally, the sources confirmed, both Medical Education Minister Girish Mahajan (BJP) and Public Health Minister Dr Deepak Sawant (Shiv Sena) were not in favour of the move, since it would mean that the entire procurement process would now come under the ambit of the food and drug administration department led by BJP’s Girish Bapat.

Mahajan’s suggestion that a procurement committee under former director general of police Praveen Dixit, which has been appointed by his department, be continued with until the institute has built the capacities to take over the work has been accepted. The committee has now also been tasked with ordering similar procurements for the remaining departments. Meanwhile, some government officials have argued that the purchase cost of medicines that weren’t manufactured in-house at the institute would be costlier. Various state government agencies purchase close to 600 different kinds of medicines and drugs annually on an average.

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