THE Auditor General has revealed that Honeybee Pharmacy supplied drugs from unregistered manufacturers such as paracetamol tablets that had mould like growth on the surfaces and did not meet acceptance criteria for appearance test.
According to the Report of the Auditor General on the accounts of the republic for the financial year ended 31st December 2019, 58 out of the 60 items that constituted the health centre kits worth US$3,400,151.04, (about K70 million) were sourced from non-contract stated manufacturers.
“It was observed that the supplier sourced various medicines and medical supplies from unapproved manufacturers. In this regard, fifty-eight (58) out of the sixty (60) items with an invoice value of US$3,400,151.04 that constituted the health centre kits supplied were sourced from non-contract stated manufacturers. The contract required that the goods supplied under the contract shall be registered for use in the procuring entity’s country. It was observed that the medicines and allied substances contained in the 4,752 health centre kits with an invoice value of US$3,792,761.28 delivered in August and September 2020 were not registered with the Zambia Medicines Regulatory Authority. The Special Conditions of the Contract Clause (Delivery and Documents) requires among others that the original certificate of quality control test results in conformity with the World Health Organisation “Certification Scheme on the Quality of Pharmaceutical Products Moving in International Trade” be availed to the procuring entity. A review of the letter of Goods Acceptance Certificate by Medical Stores Limited revealed that the Health Centre Kits were not accompanied by the Certificate of Analysis from the Manufacturer / Supplier,” the report stated.
The report further revealed that tests by ZAMRA on paracetamol tablets supplied by Honey Bee and valued at US$179,074.37 revealed that the tablets had mould like growth on the surfaces and that the sample did not meet acceptance criteria for appearance test.
“In this regard, tests were carried out by ZAMRA and Zambia Bureau of Standards to assess the quality of the medicines and medical supplies and the results were as follows: Tests on Paracetamol Tablets ZAMRA undertook tests on the paracetamol tablets (BP100mg and BP500mg) contained in the health centre kits that had been supplied and had an invoice value of US$179,074.37. A review of the Certificate of Analysis dated 10th September 2020 on paracetamol tablets BP500mg revealed that the tablets had mould like growth on the surfaces and that the sample did not meet acceptance criteria for appearance test. In addition, a review of Certificate of Analysis dated 16th September 2020 on paracetamol BP100mg revealed that the sample did not meet the acceptable criteria for Assay and Friability Tests,” it read.
“Lubricated Latex Condoms; A laboratory test report dated 22nd September 2020 from Zambia Bureau of Standards revealed that the condoms supplied with an invoice value of US$114,428.16 had failed on the following parameters: bursting volume, hang and roll (water tightness), length, and package integrity. A laboratory test report dated 22nd September 2020 from Zambia Bureau of Standards revealed that the latex examination gloves supplied with an invoice value of US$109,961.28 had failed the water tightness test. The soap bar supplied in the kits with an invoice value of US$13,068 did not have a trade and manufacturer’s name. Soap bar Supplied without Manufacturers Name; Diazepam injection with an invoice value of US$4,656.96 was missing from the health centre kits supplied. 4g of Tetracycline HCL 1% eye ointment tube was supplied instead of 5g which had an invoice value of US$22,952.16.”
The report further revealed that the company did not reach the criteria needed to be considered as a supplier for the said contract with questionable references among other irregularities.
“On 26th July 2019, the Director, Clinical Care and Diagnostics Services sought authority from the Permanent Secretary-Administration to urgently procure 50,000 Health Centre Kits. According to the bidding document, the tender was split into five (5) lots to ensure that the Ministry would not be reliant on a single supplier for the delivery of the Health Centre Kits. In November and December 2019, the Ministry engaged three (3) suppliers to supply and deliver 50,000 health centre kits at total contract sum of US$35,651,700; Artemis Pharmaceutical Zambia Limited 22,500 kits, US$14,139,450; Honeybee Pharmacy 22,500 kits, US$17,958,150 and Pharmanova Zambia Limited, 5,000 kits US$3,554,100 bringing it to a totals of US$35,651,700. As at 24th September 2020, only Honeybee Pharmacy had supplied 4,752 health centre kits worth US$3,792,761.28 which was invoiced to the Ministry and had not been settled while the contracts for Pharmanova Zambia Limited and Artemis Pharmaceutical Zambia Limited were in the process of being terminated by the Ministry due to failure to provide performance bonds,” the report read.
“A review of Phase 2 of the Preliminary Evaluation of bidders to consider in part whether the bidder had over two (2) years’ experience in dealing with pharmaceuticals revealed that Honeybee Pharmacy had passed the evaluation based on referral letters of having supplied similar products to two (2) of its customers. However, Honeybee Pharmacy’s responsiveness was questionable in that; the evidence provided by Honeybee Pharmacy comprised of referral letters from two customers from Malawi and South Africa who had been supplied 16,000 units of health centre kits and 20,000 units of male condom kits respectively. The referral letters lacked details such as contact details of the referees (including the names of the directors who signed the letters, the physical and postal addresses, phone numbers, and email addresses) and the letters had no dates. The referral letters did not therefore allow for follow up to verify the legitimacy of the references. Further, the pharmaceutical license which allows trade in wholesale was only issued on 28th August 2019 which was less than four (4) months at the time of signing the contract and therefore Honeybee could not have been supplying for more than two years.”
It was further revealed that an analysis of the financial statements submitted by the three bidders revealed that the average turnover from 2016 to 2018 did not meet the criteria as they fell below the value of the bid.
The report further revealed that Honeybee did not have manufacturers’ authorisation from ZAMRA.
“ITB 14 1 (h) required that the bidder should furnish a certificate from the competent appropriate drug Regulatory Authority (RA) and that bidders should submit a Manufacturer Authorisation. However, a review of the evaluation report at the technical stage revealed that out of the sixty (60) items bid, Honeybee Pharmacy did not have manufacturers’ authorisation but were found to be responsive,” it read.
The report also revealed that six officers from four stations who had died had not been removed from the payroll and had been paid salaries and allowances amounting to K160,381.
Further, it was also revealed that a senior resident medical officer from Senanga General Hospital who was absent from duty since 2014 was irregularly paid salaries amounting to K1,981,551 and as at 31st August 2020, the funds had not been recovered.