After a year of trying to take over medical procurements, the Ministry of Health may have finally succeeded.
The Cabinet of Ministers on Oct. 27 approved a resolution that de facto gives the ministry control over how medical supplies are purchased.
This negates the purpose of Medical Procurements of Ukraine (MPU), a state company that was designed for independence, transparency and cost efficiency.
Critics of the resolution say that this will allow corruption and delays to taint medical procurements.
The resolution was adopted behind closed doors and had not been announced. The Kyiv Post secured a leaked copy.
In an emailed statement, MPU said it was “concerned.” The health ministry neither informed the company of this decision nor involved it in developing any such document.
“There must be safeguards against unjustified narrowing or prevention of competition during procurement,” the company wrote.
The health ministry did not respond to a request for comment by publication time.
Earlier this month, Ukrainian media published a leaked draft of the resolution. It would have let the health ministry set the technical standards for every good that MPU needs to buy.
This would require the MPU to check every purchase with the health ministry, an exceedingly inefficient approach. It would also allow the health ministry to word their standards in such a way as to exclude legitimate suppliers.
This could allow corrupt health officials to ensure that only pre-chosen suppliers win tenders. Ukraine’s healthcare system has been infamously rife with corruption, especially during the Viktor Yanukovych years.
Finally, it would destroy the main advantage of MPU as a nimble, independent state company that specializes in trying to find the best deals available.
Multiple observers said the draft resolution would have violated the law.
The resolution that passed on Oct. 27 differs from the draft version. It is carefully worded to avoid contradicting the law but, in essence, it’s very similar. Under the final resolution, the health ministry will have control over the lion’s share of each procurement’s standards.
“The Cabinet of Ministers’ decrees, initiated by the Ministry of Health, forces the state-owned enterprise to agree on details, procurement contracts and terms of reference with the government,” said Olena Scherban, a board member of the Anti-Corruption Action Center during an online news conference.
“This delays the process and intervenes and encroaches on the independence of the procurement agency.”
Since MPU has finished all procurements for 2020, the new resolution will not kick in until next year.
“Intervention by the Ministry of Health in the procurement process is a return to the times of (former Health Minister Raisa) Bogatyreva and Yanukovych, when big money was stolen via purchases, while patients did not get their medicine,” wrote the Patients of Ukraine nonprofit.
Ukraine’s medical system has traditionally been infested with corruption. The government overpaid huge sums of money for medicine thanks to corrupt officials with ties to the pharmaceutical industry.
To fight this, the country let international organizations buy its medicines starting in 2015. This led to savings of up to 40% and a series of other benefits.
Medical Procurements was supposed to be the international organizations’ successor. In February 2020, it was placed in charge of 14 out of 38 medical procurement categories.
But since then, the health ministry has done everything it could to interfere in MPU’s work.
Former Health Minister Ilya Yemets tried to prevent the company from working until it placed his own man in charge. Less than a month later, Maksym Stepanov replaced Yemets, but the ministry would not allow MPU to start procurement for many more months, causing critical drug shortages.
For example, thousands of breast cancer patients will receive delayed treatment, according to lawmaker Olga Stefanishyna. Medicines for some rare diseases have run out, forcing some patients to protest, according to Inna Ivanenko, director of Patients of Ukraine. HIV patients came close to shortages, but were saved at the last minute by international donors.
When MPU tried to buy 90,000 protective suits for doctors fighting COVID-19, the ministry stopped it and ordered 71,340 suits from China at almost twice the cost.
The suits arrived with significant delays, despite the ministry paying in advance for over half of the order. The acquisition went through an obscure, new Ukrainian wholesaler that had never worked on an order that large before.
Anti-corruption watchdogs believe that too many billions of hryvnias are at stake for corrupt officials and private interests to allow MPU to remain independent and functional.
