IPA awarded $36.5M contract without licence to import

… danger of dumping pre qualification criteria exposed

Public Health Minister Volda Lawrence has revealed that in 2016 and 2017, several firms were awarded contracts to supply pharmaceuticals to the health sector but failed to deliver. This resulted in shortages that led to her authorising an “emergency’ contract for $650 million to ANSA McAL.

The International Pharmaceutical Agency (IPA) was one of those companies that failed to supply all of the drugs it was awarded because it was not qualified to import some specialised pharmaceuticals.

In January 2016, IPA, which is owned by Alliance For Change (AFC) funder Lloyd Singh, was awarded two contracts to supply the Georgetown Public Hospital with pharmaceuticals and medical supplies. On one of the contracts for $36.5 million, the company only delivered 80 per cent of the pharmaceutical because it was not qualified to supply the remainder.

The remaining 20 per cent of drugs consisted of narcotics, including morphine which required special certification for importation.

IPA insiders confirmed that the company is not registered to import those categories of drugs and was therefore denied a licence by the Government Analyst-Food and Drug Department (GA-FDD). Head of the Food and Drugs Department, Marlon Cole, explained to Guyana Times that in order for a firm to import narcotic-typed pharmaceuticals, it must be registered in order to be granted a licence. Cole said in the case of IPA, the company was not registered.

Lloyd Singh

Though IPA is not registered, the company attempted to import the narcotic-type drug on behalf of a registered firm, Pharmagen. Reliable sources within IPA’s management explained that the company was hoping to secure the licence to import the drugs by acting on behalf of the registered firm.

After being denied the licence, IPA had to inform the authorities of its inability to supply the remainder of the drugs and settle the difference which amounted to some $5.5 million. This was an object lesson as to why the pre-qualification of suppliers based on objective criteria established by the World Health Organisation-World Bank had been established by the previous Administration. This was jettisoned by the A Partnership for National Unity/AFC coalition Government.

Minister Lawrence has complained of practices where contracts are being awarded to suppliers unable to supply the drugs, thus resulting in drug shortages crises across the country.

During the Budget Debates in February 2016, Dr Karen Cummings, the Government’s point-person on health, alluded to the cancellation of the prequalification-based contract with the NEW GPC in October 2015, and said, “Mr Speaker: open, competitive bidding is on the horizon… This APNU/AFC Government will ensure that it does not water the hard earned taxpayers’ dollars on enriching the pockets of the undeserving.”

Public Health Minister Volda Lawrence

The Public Health Ministry claimed to have received support from USAID to develop a new standard for “an open, competitive bidding system”. A bidding document to this effect has been approved by the National Tender Administration Board, following which a pre-bid meeting with all potential bidders was held on December 16, 2015. However, the $700 million which was allocated the following January appeared to have been given to selected suppliers, who did not deliver, and whom the Minister refuses to identify.

Both Lawrence and her predecessor, Dr George Norton, had admitted that the shortage of drugs across the country was as a result of the changes implemented by Government to the drug procurement system.

“Some of these pharmaceuticals were overdue by as much as six months, which exacerbated the drug shortage at the hospital. These are the same suppliers who, before May 2015, were given the opportunity under the Granger Administration to become suppliers of pharmaceuticals to the public healthcare sector,” she said. But the prequalification system which was scrapped by this Government had guaranteed that reputable contractors were supplying the nation’s health sector with the requisite quantity and quality of drugs. When the prequalification system was in place, the health sector was not prone to constant shortages of drugs, which puts the lives of patients at risks.


However, one stakeholder who spoke with this publication emphasised, “Guyana should not try to re-invent the wheel. The Government promised to replace the World Bank/WHO-designed prequalification system that Guyana had because they wanted to create a “more level and decentralised playing field.” However, he has emphasised that in so doing, the Government allowed in “fly-by-night” companies and individuals who just could not handle the internationally prescribed standards and consequent supply chain demands.

Another doctor with years of experience in the public and private health sectors said, “Whatever their concerns about the old prequalification criteria favouring one company, they have to admit it worked over the decade it was in place. And it’s a myth that only one company benefited; the others who received a substantial amount of the business had the decade to bring their scores up to par. We can see the consequences of that now that they can’t deliver contracts they were handed.” Pressed to elaborate on NEW GPC’s record between 2005 and 2015 on the country’s pharma supplies, he rattled them off his fingers: “The proof of the pudding is (that) there were no shortages in the decade. None! They also offered 70,000 square feet of temperature-controlled, PAHO compliant cold chain storage pharma warehousing completely free of cost. And with their location at Ruimveldt, it meant almost instantaneous deliveries.

“They also added a manufacturing capacity to our national push for independence by manufacturing a substantial quantity of pharma supplies, which were FDA approved and resulted in substantial exports to bring in foreign currency. They also employed a substantial number of Guyanese, who all paid their taxes. “Finally, they made all Guyana proud when they became the first company to manufacture anti-retrovirals in our early fight against HIV/AIDS.”