CAG raps OSMCL for its irregularities in drug supply

Bhubaneswar, April 5: The Comptroller and Auditor General of India (CAG) has rapped the state owned Odisha State Medical Corporation Limited (OSMCL)for failing in timely procurement and supply of drugs and equipments to health institutions. The procurement process was riddled with systematic flaws and numerous instances of non adherence to the procurement policy or orders issued by the government. There was stock out of essential drugs in hospitals leading to out of pocket expenditure by the patients. Monitoring of inventory management through e-Niramaya software application was ineffective leading to shortage of drug in health institutions and expiry of drugs as well. Government was unsuccessful in providing unbroken supply of essential drugs to the patients in public health institutions, said the CAG report for the year ended March 2019. Odisha State Medical Corporation Limited is an independent procurement agency for the state health department. Its key functions are timely procurement of quality medicines, surgicals, equipment, instruments, furniture etc. through fair transparent and competitive bidding process. However, the audit of procurement and distribution of drugs by the corporation for 2016-19 revealed that there was inordinate delay ranging between five and seven months in the finalisation of annual procurement plans for drugs and medical consumables and six to seventeen months in respect of equipment, instrument and furniture. "Delay in finalisation of procurement plan impacted the procurement process and supply of drugs and medical consumables to health institutions," the CAG observed. The government watchdog pointed out that OSMCL could supply 336.9 crore (49%) units of drugs and medical consumables during 2016-19 as against the approved quantity of 692.97 crore units. Similarly, out of 3471 purchase orders, 791 (23%) orders were partially executed and 252 (7%) purchase orders were not executed at all which led to less supply of drugs and consumables to the health institutions. Deficiency in stock management led to expiry of 349 categories of drugs valued at Rs 4.18 crore during April 2017 to May 2019. Short supply of drugs and medical consumables by the corporation led to purchase of these items locally incurring extra expenditure. For example, during 2018-19 health institutions had incurred extra expenditure of Rs 98.12 lakh, 44% of total medicines worth Rs 2.24 crore purchased, said the CAG report which was placed in the Assembly on Saturday.