Breaches in medicines procurement cause 1.5 billion drams damages: study

YEREVAN, October 5. / ARKA /. Armenia’s State Commission for Protection of Economic Competition (SCPEC) unveiled today the findings of an extensive study which revealed 1.5 billion drams embezzlement in the procurement of medicines for state-run hospitals and clinics.

Some 300 million drams of this amount were violations in providing free and discounted medicines. SCPEC chairman Artak Shaboyan said the study embraced 134 hospitals in the capital city and regions as well as 315 companies engaged in the import, production and sale of drugs.

The study found that about 100 of these 134 medical institutions purchased drugs without announcing tenders in a blatant violation of the law "On Procurements" paying in some instances for drugs three times more than their real market cost.

"For example, the population of the country often uses anti-inflammatory drug" ceftriaxone "which some medical institutions bought for 850 drams, while its real price is 190 drams," according to Shaboyan.

He cited another instance, when the health facility used government funds to buy "amlodipine" for the treatment of cardiovascular disease for 4,800 drams, while its real price is about six times lower - 850 drams. Shaboyan said when the anti-trust agency demanded explanations form heads of medical establishments the latter said they did not know the requirements of the law. The majority of violations were found out in Shirak and Lori provinces.

Shaboyan said SCPEC has instituted administrative proceedings against the companies Natalie Pharm, Viola, Anikofarm, Eurofarm, Rusfarm, Egdani, Magee El, Camelli, a private entrepreneur Hrant Gevorgyan, and against 29 public health facilities in Yerevan and outside it. Natalie Pharm was fined 50 million drams for the abuse of a dominant position on the market of drugs.

Late last month President Serzh Sargsyan berated the government for widespread bribery and nepotism in state procurements administered by various Armenian ministries and other government bodies. The president singled out “kickbacks paid at the expense of the state budget” to officials handling procurement tenders. He instructed state prosecutors and the National Security Service to investigate the reported abuses and “go after people who take kickbacks and have their cousins win tenders with twice the prices” offered by other potential suppliers. He stressed that the law-enforcement bodies must start the crackdown from high-level officials. ($ 1 - 408.38 drams). -0-