CAG: Hospital Drug Purchase Faulty
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26 February 2009
New Delhi, India
The Comptroller and Auditor-General (CAG) has pulled up the department of health and family welfare for its lackadaisical approach which led to excessive spending running into hundreds of crores.
As per the report, at all the hospitals including GB Pant Hospital, LNJP Hospital, DDU Hospital, IHBAS, GTB etc., frequent extensions to rate contracts for drugs and surgical items by Central Procurement Agency resulted in financial benefit to supplying firms whose rates had reduced in the intervening period.
The rates could not be finalised at the right time that resulted in a loss. Because of the extension of the existing contracts the hospitals had to pay the old price while the prices in the market had reduced over 77 per cent.
The report also mentioned that the rush expenditure that is incurred during the closing months of the financial year was on an average 50 per cent in most of the hospitals. In the GB Pant hospital, it went up to 75 per cent during 2006-2007.
Moreover, same company was supplying same drug to different hospitals at different rates. Also no suitable effort was made to recover the penalty in case they do not supply the required drugs. In some instances the purchases were made in excess of requirement while at others the essential drugs were out of stock.
The CAG also noticed that purchases were made through chemists by hospitals and the discounts were as low as four per cent in many instances which should have been more and same for all hospitals.
As per the norms, the supply of the drugs and other medical items should not have MRP printed on it.
But in many of the government hospitals items with MRP printed on them had been supplied and were detected.
Poor reporting of test laboratories, no provision for penalising labs for incorrect reporting, inadequate action taken against firms supplying substandard drugs, delay in installation of equipment were other weaknesses found inherent in the medical system of the capital by the apex audit body.