P500 disparity in Covid-19 test kits leads to huge gap in orders – Quimbo

Francisco Duque III —PPA POOL

MANILA, Philippines — A P500 “disparity” in purchasing Covid-19 test kits can lead to a huge gap when the government orders in bulk, Marikina 2nd District Rep. Stella Quimbo said on Monday.

At the hearing of the House of Representatives appropriations panel on the utilization of the funds of the Department of Health (DOH) and the Philippine Health Insurance Corporation, Quimbo said there were instances when test kits of the same brand and the same method were priced at P2,083 and P1,562.

“I observed that there were instances that the testing types were the same, the brand names were the same, but prices were different. And the price difference was as high as about P500. So for example, there was a price difference of P2,083 versus P1,562,” said Quimbo, the senior vice chairperson of the appropriations committee.

“Why did you order in different lots? Why did you not have these ordered at the same time to get favorable prices? Because of that, prices were different.  And there’s a P500 disparity across certain lots and that’s big, especially if you make big orders,” she added.

Health Secretary Teodoro Herbosa explained to Quimbo that the DOH submitted documents requested from them, particularly regarding the P47.6-billion Covid-19 funds transferred by the DOH to the Procurement Service of the Department of Budget and Management (PS-DBM).

READ: Duterte ordered transfer of P47.6 billion COVID funds to PS-DBM – Duque

Herbosa, who was not yet DOH chief when the pandemic struck in 2020, said he believes the different prices were caused by the items being purchased at different times.

Former Health Secretary Francisco Duque III, the DOH chief during the Covid-19 pandemic who was present at the hearing, agreed with Herbosa.

“However, I can only surmise why the prices were different because I was special advisor of the task force then, and I knew that certain items changed their pricing over the times, so I think we to look at the date that some items are procured because they were changing the cost as the pandemic was ongoing,” Herbosa explained.

“I agree with the statement of Secretary Herbosa; it’s very important to look at the timelines of your Honor,” Duque added.

However, Quimbo pointed out that Duque has been unable to explain the price differences and their relation to the time frame.

“You keep repeating Secretary Duque that these were all done in the interest of time; you had to do these all expeditiously, we hastened procurement.  All of a sudden now that we’re asking you to please explain the substantial price difference, you’re now using as a defense the lapse of time. So what is it?  Is it expeditious or lapse of time?” she said.

Duque explained that the transactions were done by the PS-DBM as the DOH handed the funds to the procuring entity. This was again questioned by Quimbo as it initially appeared that the DOH was not involved in the procurement of the testing kits when the items were specialized.

“My understanding Sec (Duque) is that — this is my layman understanding — that instructions to bid would come from the DOH, so meaning to say, you based it on specifications, you bid these, because the question is why did you not group all of the materials you need?” Quimbo asked.

“And actually sir, the next question is, how much was the price on the world market at the time of that purchase? That’s the next question because it could be as low as $8, that is the next question right?” she added.

In August 2021, the Commission on Audit (COA) found deficiencies in how the DOH managed its P67.32-billion fund to fight the Covid-19 pandemic, adding that it contributed to challenges that the country faced during the crisis.

COA’s annual audit report on DOH in 2020 revealed that the deficiencies were caused by non-compliance with laws and regulations, which led to missed opportunities for the department.

READ: COA finds DOH lacking in managing P67.32-B COVID funds

Eventually, the DOH was questioned for handing over to the PS-DBM the responsibility of procuring protective equipment, when the latter’s mandate was to purchase common-use supplies like pens, paper, and other generic equipment.

The Senate also quizzed the PS-DBM on why it awarded a contract to Pharmally Pharmaceutical Corporation despite the company’s small paid-up capital of P625,000.

Pharmally was accused of selling overpriced personal protective equipment like face masks and face shields.

House Deputy Majority Leader and Iloilo 1st District Rep. Janette Garin pointed out the controversy could have been avoided if the DOH had not delegated its mandate to the PS-DBM.

“It is actually a function that DOH should not delegate because the DOH has the pool of network when it comes to manufacturers when it comes to pricing of other countries,” she said.

“We are not procuring ball pens, paper, erasers. We are procuring devices, commodities, and medical supplies that are quite highly specialized. That is why there is a big difference between procurement from PS-DBM … as compared to procurement through PS-DBM where you requested PS-DBM to procure on your behalf.  This means you asked them to buy items specialized by the DOH,” she added.