Andhra Pradesh loses crores by procuring medicines from PSUs, SSIs

Hyderabad: A policy to procure cotton, bandage cloth, gauze cloth and rolled bandages from the Small Scale Industries (SSI) and handloom units and antibiotics from the Central Public Sector Undertakings (CPSU) and Public Sector Undertakings (PSU) for government-run hospitals in the State is reportedly posing a threat to the people.

• APMSIDC report states that govt’s preference to promote PSUs and SSIs is bleeding the govt
• The officials found out antibiotics procured from CPSU/PSU firms are found Not of Standard Quality (NSQ) on a few samples testing
• Even the rates for bandage cloth, gauze cloth are higher in comparison to Taminadu and Rajasthan States

According to the State Medical and Health Department sources, the Andhra Pradesh Medical Services and Infrastructure Development Corporation (APMSIDC) was mandated to procure the medicines to supply for the drug stores located in various parts of the State, from where the medicines are being distributed to the government-run hospitals.

However, a report from the APMSIDC to the government pointed out the very policy insisting on procuring the antibiotics from the CPSU/PSU and SSI units and handloom units by giving preferential treatment has been forcing huge amounts by it.
A letter from the managing director of the APMSIDC said, “In case of reserved items of cotton, bandage cloth etc our analysis shows that we are spending about Rs 33.98 crore on procurement.

At that volume we are spending at least 14.76 crore excess amount (77% excess) from medicine budget of the poor to subsidise SSI units and handloom units.” He further said, “We may explore the possibility of giving pricing preference of 10 % to 15% to local SSIs and go for open tender.”

On quality standards of procurement due to the preferential treatment, the APMSIDC said that it had found out antibiotics procured from CPSU/PSU firms are found Not of Standard Quality (NSQ) on sample testing by APMISDC. For this, it has named the Ciprofloxacin tablets of 250 mg, 500 mg, manufactured by HLL Life Care and Bengal Chemical. Also, it has also found that Amoxicillin and Clavulanate Injection of 1 mg, manufactured by M/s KAPL too were found to be NSQ.

Also, the CPSU and PSU have been charging different rates for different States in selling their products. For example, the APMISDC report to the government said that after comparing rates with Tamilnadu Medical Services Corporation (TNMSC), “It is observed that there is a lot of difference between the APMISDC rates ie, (108%) when compared with TNMSC for 17 items,” and “99.83 per cent when compared with Rajasthan MSC for 21 items,” it added.

Under these circumstance to procure the quality standards items it has sought the government to bring in policy changes as the protectionism for the CPSU and PSU have been forcing the corporation to compromise in getting quality standard items as well as doling out crores of rupees budgetary allocated funds for the poor man’s medical welfare in the State.