‘Gravity of waste’: Nearly P2B lost due to near-expiry, expired test kits — Pangilinan

MANILA, Philippines — As much as P1.25 billion in funds were potentially lost with the government paying the full cost of near-expiry COVID-19 test kits while at least P550 million worth of test kits expired at the height of the pandemic without being used, senators learned Tuesday.

“That gives us the gravity of the waste, incompetence, and corruption that we are facing,” Senator Francis Pangilinan lamented during the hearing of the Senate blue ribbon committee, which is looking into the government’s pandemic response spending.

Pangilinan quizzed officials from the Department of Health (DOH) over the test kits it purchased through the Procurement Service of the Department of Budget and Management (PS-DBM) in 2020.

Expired test kits

The senator cited a letter dated December 7, 2020 signed by DOH Assistant Secretary Nelson Santiago addressing then PS-DBM head Christopher Lao.

Santiago, through the letter, requested that the delivery for another batch of test kits procured from Pharmally Pharmaceutical Corp. be rescheduled “because the test kits that were [earlier] delivered expired,” according to Pangilinan.

“The proposed [new] delivery schedule will prevent the repeat of the past scenario wherein a large number of stored BGI kits expired,” Pangilinan added, quoting the letter.

Santiago confirmed that 7,925 kits—equivalent to 371,794 COVID-19 tests—expired without being used.

Each kit would contain 40 to 50 tests depending on the brand, according to Santiago.

After a quick computation, Pangilinan said the expired test kits may have amounted to P550 million if the 7,925 test kits were bought for P69,500 each.

“[If it was] P75,000 per kit…it would be P594 million worth of expired testing kits,” he added.

It was not clear, however, if the expired test kits were the ones procured by the PS-DBM from Pharmally, the foreign-led firm that is now under the Senate’s scrutiny after it bagged over P8.6 billion in supply contracts last year.

But Pangilinan pointed out that Santiago’s December letter has a copy furnished to Pharmally corporate secretary and treasurer Mohit Dargani.

“So I assume these are Pharmally kits,” the senator said.

‘Not acceptable’

Pangilinan then turned to DOH Secretary Francisco Duque III and asked him about the test kits that went to waste amid the lack of badly needed COVID-19 testing at the time.

“Is this acceptable to you?” the senator asked.

Duque, in response, said the cost of the expired test kits was only 3.6 percent of the total cost of the testing.

“So you’re saying P500 million of expired testing kits is just three percent and, therefore, it’s OK?” Pangilinan then followed up.

“I asked a very simple question. P500 million worth testing kits expired at the height of the pandemic and we are struggling with testing. Is that acceptable to you?” he added.

Duque said: “No…it’s not acceptable to me.”

Discount for near-expiry kits

Pangilinan also once again questioned the purchase of test kits which failed to meet specified requirements, pointing out that the government would not have needed to pay for the full cost of the said items if they are already nearing their expiration.

Citing industry insiders, Pangilinan said it would have been possible for the government to get 10 to 15 percent discount for test kits that only have a 12 to 18-month shelf life.

“If the shelf life is within 6 to 12 months, discount is at 15-25 percent. If it’s less than six months, it’s around 30 percent or more. But full amount was paid. That is overpriced,” Pangilinan said, noting that a 25-percent discount would have saved the government P1.25 billion.

“Not just overpriced, that is also using equipment that is substandard or at least lacking in the necessary shelf life for us to be able to effectively deal with COVID [and] avoid deaths and sickness,” he added.

Based on PS-DBM documents, the senator said Pharmally delivered 4,800 kits on May 2, 2020, and 3,200 kits on May 4, 2020.

The inspection reports, he said, indicate that the kits have a manufacturing date of April 5, 2020 and an expiry date of October 5, 2020, or a shelf life of six months.

But a PS-DBM Technical Requirement document dated April 21, 2020 mandated that all testing kits must be fresh stock and mush have a shelf-life of at least 24 to 36 months from the date of delivery, Pangilinan pointed out.

He also said other Pharmally deliveries consisted thousands of test kits which likewise did not meet the requirement of having at least 24 to 36 months of shelf life.

Pangilinan said these deliveries include:

• 12,000 A*Star Fortitude Kit 2.0 Covid-19 RT-PCR Test delivered 2-4 months from expiration date (P688 million)
• 41,400 BGI, Real-Time Fluorescent RT-PCR kit, delivered 9 months before expiration date (P2.88 billion)
• 312 MGI Easy Magnetic Beads Virus DNA/RNA Extraction, delivered 8 months before expiration date (P246 million.)

But Duque explained that the at least 24-month expiry period was a pre-pandemic requirement.

“Bago po kasi itong virus na ito, pati yung mga gumagawa ng mga [The virus was new so even those manufacturing the] test kits have to rely on evolving information as to the stability of the test kits,” the health chief said.

Still, Pangilinan said the government could have availed of discounts.

“Why didn’t you renegotiate for a lower price? Bakit tinanggap? [Why did we accept it?]” the senator said.

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