Medical kit distribution highlights failure to reform

The government’s announcement of four new medical kit distribution contracts highlights again the failure to reform a system that has been repeatedly exposed as ineffective and inefficient.

As recently as November last year a government audit recommended that the awarding of distribution contracts should be outsourced to the Provinces so they could make their own local arrangements and effectively monitor performance. This was put forward as one part of a comprehensive set of reforms to improve the procurement and distribution of medicines and medical supplies.

However, those reform recommendations have been ignored by politicians and bureaucrats, who seem to be actively protecting the failed status quo.

According to media reports, the Central Supply and Tenders Board has stuck to the old, failed system in awarding four new regional distribution contracts. The contracts have been given to Global Customs and Forwarding Ltd [Momase region], LD Logistics Ltd [New Guinea islands] South Pacific Pharmaceutical Distribution Ltd [Highlands] and L & Z Enterprise Ltd [Southern region].

Regional Medical Kit Distribution Contracts 2018

Global Customs and Forwarding is the company embroiled in corruption allegations against Paul Dopsie, an Executive Manager in the Department of Health. Global has alleged that between 2014 and 2016, Mr Dopsie demanded and received over K265,000 in ‘facilitation payments’ to secure the release of payments under their medical kit distribution contract. Global also claimed they were later persuaded not to pursue their allegations against Dopsie on the promise their contract would not be rescinded.

The details of the alleged corruption were revealed in the report of the Special Audit conducted by the Prime Ministers Department in 2017. The Auditors further claim, Health Secretary Pascoe Kase has done nothing to report the alleged fraud to police or the internal audit division, nor has he evidently instigated any disciplinary action against Mr Dopsie.

The fact that, against this history, a new contract has now been awarded to Global, raises a host of ethical and governance questions.

Meanwhile, LD Logistics has been awarded the New Guinea Islands contract. This is despite a slew of carefully evidenced criticisms of LD’s poor performance, delays, non-delivery and over-charging by the company in relation to previous medical distribution contracts.

South Pacific Pharmaceutical Distributors is another company that shows up previously in the procurement and distribution of medical supplies. According to the Prime Minister’s audit team, between 2014 and August 2017, South Pacific Pharmaceuticals received, in total, K5.6 million for supplying medicines and medical supplies.

In the same period, according to the audit report, L & Z Enterprise received K19,473,2429 for medical kit distribution in the Southern Region.

The same audit also revealed that the Department of Health takes no steps to monitor the performance of its contractors, or even to check their invoices comply with contractually agreed pricing.

Given the long history of complaints from all around the country about the inadequate supply and distribution of medicines and medial supplies; the Health Department’s failure to implement reform recommendations; and the Department’s failure to monitor the performance of its contractors, we should all be concerned about the government’s decision to stick with the same distribution companies for a further twelve months. Particularly in light of the above evidence.

In the short-term it seem likely the same shortages of essential live-saving treatments is set to continue in our aid posts, health centres and hospitals. This is a tragedy for everyone who relies on the public health system and means that government spending of over K87 million on the latest round of medical kits could end up being largely wasted.