Case 3.3 – Borneo Pharmaceuticals

Case 3.3 – Borneo Pharmaceuticals

Borneo Pacific Pharmaceuticals Ltd (BPP) was established in 1996 by naturalised citizen Martin Poh. The company was an agent and distributor of pharmaceutical and health-care products in PNG. According to the company’s website it is a wholesaler supplier to markets in the Solomon Islands, Vanuatu, Fiji, Tonga and Samoa.

In December 2013 the company was thrown into the spotlight when the Australian government withdrew from a $38 million drug supplies program, after the PNG Government’s Central Supply and Tenders Board (CSTB) awarded a contract to supply medical kits to BPP (Cochrane, 2013). The PNG National Doctors Association (NDA) expressed concerns at the CSTB decision in January 2014 after it was revealed that the ISO 9001 accreditation requirements was removed (The National, 2014). In April 2014 the Community Coalition Against Corruption – led by Transparency International PNG and the Media Council of PNG (MCPNG) – condemned the contract and asked that the company’s manufacturing facilities is visited by authorities (National, The National, 2014).

The public outcry compelled the PNG Government to send a delegation to Malaysia in April 2014 to inspect the packaging factory where the medical kits are assembled (EMTV, EMTV, 2014). In May 2014 the Parliamentary Public Accounts Committee (PAC) held an inquiry to ascertain how the contract was awarded (EMTV, EMTV, 2014). In March 2017 the acting CSTB chair and Department of Finance Secretary, Dr Ken Ngangan, revealed that the BPP contract expired in March this year. The Office of the State Solicitors advice against the extension of the firm’s contract after it expired in November last year (Kuku, 2017). The BPP medical supplies controversy raises questions about the procurement system used by the CSTB and whether the process was competitive enough to enable the purchase of quality drugs at the lowest possible cost. There have been calls in the health sector in the past for a commission of inquiry to investigate the CSTB and how it conducted its business.

Update as of 2018

Since the last 20 case report was published by TIPNG; there has yet to be significant actions to reflect and redress the severity of the complications faced by the people of PNG regarding the efficient provision of public healthcare. In February 2018, it was reported that 40% of aid-posts / health centres have been closed due to the shortage of drugs and medical supplies (Tahana, 2018)

To date, nothing has been done to assess, diagnose and reform the efficiency and integrity of the operations of the NDOH in light of the somewhat chronic recession in the efficient provision of public healthcare. Recent media publication has revealed that the NDOH has admitted to the weaknesses within its procurement and distribution chain of medical supplies (“Implementation of New Medical Supply System Would Take Time to Roll Out”, 2019)

The Minister for Health – Puka Temu only commented on the new system to assist with the distribution of drugs, but nothing has been said to address the major issue concerning the infirmity of the procurement systems and processes. The awarding of the tender to Borneo Pharmaceuticals despite it not having complied with the International Standardization Organisation’s (ISO) requirement only highlights the discrepancies in the process of appointing medical suppliers (Cochrane, 2013).

It seems that the media’s reportage of Puka Temu’s numerous statements have only pointed to how the system within the distribution chain is slow in the provision of much needed medical supplies and not in reference to the fragility of the procurement systems used in the acquisition of these medical supplies (Mou, 2018). The lack of proper controls and checks will result (and is evident) in the poor performance of these medical suppliers. This only results in additional and unnecessary costs being billed to the NDOH at the expense of taxpayers.

There have been numerous assessment reports composed by various organisations such as the World Health Organisation (WHO), the World  Bank and the Asian Development Bank (ADB) to name a few that have made an independent assessment of the public healthcare system in PNG. These reports have attested to  certain salient issues that are relatively similar or identical.

Transparency International’s position in this matter should be to either call on the government to conduct a special internal audit – if they haven’t done it already. It should also reach out to its partners to assist where possible to provide an independent audit into the processes involved in awarding contracts to medical suppliers. Other concerned CSO’s and stakeholders should do an independent audit of the processes involved to provide substantial diagnosis which may be used to push for governmental reform.

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~ Reference/Bibliography ~

Cochrane.L, 2013, December 26, “Australia withdraws funding from Papa New Guinea health programs over corruption, fake drug concerns”, ABC News. Retrieved from https://www.abc.net.au/news/2013-12-26/an-australia-cuts-funding-of-png-medical-kits/5174992

“Implementation of New Medical Supply System Would  Take Time to Roll Out” 2019, January 18. Post Courier. Retrieved from https://postcourier.com.pg/implemention-new-medical-supply-system-take-time-roll/

Mou.F, 2018, November 7. “Ineffective command affects supply of medical drugs” Loop PNG. Retrieved from http://www.looppng.com/png-news/ineffective-command-affects-supply-medical-drugs-sir-puka-80634 Tahana. J, 2018, June 5, “PNG Doctors call for overhaul as hospital shelves run bare”,  Radio New Zealand.  Retrieved from https://www.radionz.co.nz/international/pacific-news/358889/png-doctors-call-for-overhaul-as-hospital-shelves-run-bare