Remdesivir injection, which was considered a crucial drug in COVID-19 treatment protocol, became a household name during the second wave of the pandemic in 2021. While the pandemic threat has receded, it turns out that the Karnataka Government is yet to pay the dues to companies supplying the drug, which adds up to ₹200-odd crore, on account of violation of a tender condition that testing 10% of all supplies to the government is mandatory.
More than a year after the drug was supplied, payments to major pharma companies are stalled due to this violation.
During the second wave of the pandemic in 2021, the critical injection was procured by the government through Karnataka State Medical Supplies Corporation Ltd. (KSMSCL), a nodal agency for procurement of all government-related medical supplies in the State.
‘Safety of patients was not compromised’
The delay in payment of dues has been attributed to violation of tender condition for medical supplies to the government that mandates a third-party lab test prior to supply. However, these lab tests were not conducted citing the medical emergency starting from April 2021.
Remdesivir was in very short supply. Scenes of relatives of patients desperately searching for Remdesivir were all over social media and news publications. A few persons managed to procure the drug from the market by paying a premium
“Such was the demand that not even a single sample of those batches is available for testing (if testing were to be carried out today),” said a supplier of medicine to the government.
The supplier argued that the lapse was only ‘procedural’, and not something that put patients at risk. “This condition exists to ensure that the quality of drugs supplied to the government is not inferior in standard as compared to what is released in the open market. The high-end drug was tested in labs by the manufacturers as per strict protocols and certified safe. Given the emergency during the height of the pandemic, the third-party testing was foregone to save time and speed up supplies to the government,” he claimed.
Companies that supplied Remdesivir to Karnataka Government
The pharma companies that supplied Remdesivir included Biocon Biologics, Mylan, Sun Pharma and Cipla. A leading Karnataka-based company claimed that payment has been withheld for want of a report from an empaneled lab, which is not feasible now as physical stocks are not available for testing. In a letter to the Health and Family Welfare Department, the company pointed out that it had supported the Karnataka Government with COVID-19 drug supply and played an active role in saving every life possible.
Another pharma company expressed unhappiness over the delay in payment for the stock of Remdesivir injection supplied during the second wave of the COVID-19 pandemic despite having completed the relevant paperwork long back.
A senior official of the Health Department of Karnataka told The Hindu, “The situation then was such that emergency supplies were necessary, as thousands were infected with COVID-19 and battling for life. The supplies were made directly to government health facilities, and 10% sample testing in a Delhi-based empaneled lab could not take place as demand for the injection was unusually high and immediate.”
Sources said that KSMSCL Managing Director Rajendra Cholan is expected to move the KSMSCL board shortly for a solution to the more-than-year-old problem. The board is set to take feedback from district health officers (DHOs) and others on the issue, the sources said.
When asked how the government would reconcile the supplies before making the payment, an official said, “Remdesivir is a universally accepted drug, which has been accepted even by the Union Government. The government has a utilisation report. We have sought reports of consumption from the DHOs. There is no adverse report. The matter will be discussed by the KSMSCL board.”
Payment, security deposit of pharma companies held up
Bills amounting to around ₹300 crore are due for payment to vendors who supplied drugs through Karnataka State Medical Supplies Company Ltd., and also under National Health Mission (NHM).
Security deposit of companies that participated in the tender are also stuck, sources in the pharma industry claimed.
“Since the security deposit is not released even of companies that do not qualify in the tender process, some small vendors have stopped participating in the tender process. The security deposit of companies that participated in the tender process is stuck. This could impact the entire medicine procurement process,” a vendor told The Hindu.
Sources said that average annual procurement under NHM is about ₹1,200 crore.
One of the reminder letters to the State Government on pending dues from the KSMSCL by a company reminded the Government that it is suffering hardship due to non -payment since they are a MSME.
Vendors approach Minister, Public Accounts Committee
A couple of vendors said that letters have been written to Health Minister K. Sudhakar and also to the Chairman of Public Accounts Committee Krishna Byregowda apprising them of the problems in the procurement of medical supplies by the Karnataka Government, including non-payment of bills and return of security deposit.
A senior official in the Health Department said that the government owes about ₹300 crore for procurement for NHM, and that the delay in payment is due to the procedure to be followed while clearing bills. The official revealed that a small number of bills had budgetary issues too.
Regarding return of security deposit to vendors, an official said that efforts are being made to clear all of them in the next few weeks. “The security deposit is submitted through an e-portal over the last two years. There are issues in about 15 security deposits that were done during the manual tendering process that was followed between 2013 and 2016. These are pending due to disputes, and a report has been sought.”
