USAID slams Health Dept procurement and supply 

Papua New Guinea’s Shadow Health Minister warned this week that the nation faces ‘catastrophic consequences’ from unprecedented levels of mismanagement within its health services, which is causing widespread suffering and preventable deaths. MP Joseph Yopyyopy, has set out a sobering set of statistics to back his assertions, including the shortages of medicines reported across the country, the TB crisis, the 12,000 children under five who die every year and the 1,500 women who do not survive childbirth.

Against this backdrop, over the past month PNGi has published a series of investigations into the supply of medicines and medical products to PNG’s hospital and health centres. They document abusive commercial transactions that are leading to the circulation of overpriced and substandard medical goods. In forthcoming features we will delve into the methods used by corrupt officials and companies, to circumvent oversight in the Department of Health, and defraud the public. These abusive contracts and frauds are critical factors that contribute to the extremely poor health outcomes and low life expectancy across the country.

The findings laid out by PNGi, have been further supported by a recent USAID study conducted into the Department of Health’s management of medicine and medical supply procurement.

The analysis, carried out by a private consultant from the international firm Chemonics, on behalf of the USAID Global Health Supply Chain Program, presents some disturbing results. It found:

1. The average prices being paid by the Department of Health for medicines and medical products are ‘far above prices on the international market’;
2. There is a lack of routine quality control testing by either supplier or the Department; and
3. Proper purchasing procedures are not being followed. 

The analysis also highlighted a number of further factors that could be indicative of possibly illegal or criminal behavior, and which certainly warrant further investigation. For example:

• Orders being issued without approval;
• Two suppliers being responsible for more than half the total value of all supplies;
• Many items ordered having no catalogue number so they cannot be tracked; and
• One supplier receiving ‘a significant proportion of business from two Area Medical Stores’ which was ‘against national trends’. 

Overall, the picture painted in the USAID assessment is one of chaos, with drug requests from centres around the country being dealt with on an ad hoc individual basis, supplies being ordered and dispatched with no proper paperwork, most purchase approvals being given after the supply has been completed, and no attempts to ensure either value for money or the quality of products supplied.

Two of twenty-four samples tested in the study did not meet the required specification; that is, alarmingly, over 8% of the samples tested. Even given the low sample size, these results indicate a very real risk to public health from the supply of substandard medicines and medical products; something that was also highlighted in the discussion around Borneo Pacific Pharmaceuticals in Part 1 of Profiting from Sickness.

Although USAID says its review was requested by the Senior Executive Management team in the National Department of Health, and it made 12 recommendations to address the serious failings identified, PNGi has been informed no remedial action has been taken. This is something the Shadow Health Minister should be raising immediately with his counterpart on the government side and the Department Secretary.