Auditor General Sue Winspear has expressed disappointment in the Health Services Authority’s failed procurement exercise for its pharmacy, saying value for money is important when around $9 million annually is being spent.
The Office of the Auditor General’s HSA Outpatient Pharmacy Services report also highlighted issues with the archaic Pharmacy Act and lack of performance checks at the government pharmacy facility.
Winspear shared her concerns in a statement on the release of the OAG’s latest report, which reviewed operations and the expenditure processes at the widely used government health facility.
“It was disappointing to note that lessons from the previous procurement exercise did not appear to have been learned. The procurement exercise that started in late 2019 was started far too late and took too long, leading to contracts, that were not providing value for money, being extended multiple times. That procurement exercise was eventually abandoned in early 2021 and a new one has now started,” Winspear said in the statement on the report made public Tuesday afternoon.
According to the report, the HSA carried out a procurement exercise in 2017 that resulted in nine contracts for the supply of medicines being awarded covering July 2017 to December 2019, and there were “some challenges” with that exercise.
Procurement under the microscope
The Office of the Auditor General said it found a number of deficiencies in the contract provisions which did not ensure fixed prices or best value for money. It also pointed to HSA’s contract templates that did not include standard clauses outlining consequences for late or non-delivery of orders.
“The contracts state that the prices offered in the tender process must be fixed for the first year, and thereafter proposals for price changes should be submitted in writing; it is not clear if these provisions were enforced,” the report stated.
A new procurement exercise was started in December 2019 for the supply of medicines, but it too had a number of deficiencies and was abandoned early in 2021.
“The HSA spends around $9 million a year buying medicines and it is important that it obtains value for money from this,” Winspear said.
The report said the new exercise “made it impossible” for new contracts to be awarded in a timely manner, as the contracts for the supply of medicines were due to expire.
That procurement exercise was cancelled at the vendor evaluation stage and existing contracts were extended to March 2022.
A new tender has been launched and is expected to be completed in January 2022. A business case was initially prepared for the pharmacy procurement, but the OAG said the quality of options evaluated was not sufficient.
Additionally, “we found that two of the options did not comply with the Procurement Act and one option was not adequately explored. The business case set out milestones, but these were not adhered to, and the procurement process suffered lengthy delays”.
The report added that HSA informed the OAG that the emergence of COVID-19 in early 2020 further contributed to the delays in completing the procurement process.
“As a result, the existing contracts were extended numerous times,” it added.
Legal changes needed
The report also pointed that the legislative framework is “outdated and there is a lack of strategic direction at the national level for healthcare, and by extension pharmacy services”.
“Not for the first time I am having to report that the legislative framework for pharmacy services is significantly out of date and there is a lack of strategic direction at the national level for healthcare. The Pharmacy Act, which dates back to 1979, is not in line with current good practice and creates risks for the control and regulation of drugs that are able to be brought into the Cayman Islands. This needs to be rectified as soon as possible,” Winspear said in her statement.
When it came to the actual medicinal supplies the report highlighted that the HSA provides a good quality pharmacy service, which has improved over recent years, “but it needs to do more, including regularly measuring and reporting on performance”.
The Auditor General recognised that HSA provides vital pharmacy services for a large proportion of the population, including many of “our most vulnerable people.”
“It is pleasing, therefore, to be able to report that the HSA provides a good quality pharmacy service and has processes in place to ensure that the quality, safety and efficacy of the medicines it uses and dispenses to patients,” she said.
“I encourage the HSA to continue to improve pharmacy service, by for example improving its facilities, and to regularly measure and report on a range of performance indicators. These should include measures that contribute to customer satisfaction such as waiting times,” she added.
Among the 19 recommendations outlined in the report, the OAG said the government should revise the Pharmacy Act, and the Pharmacy Council should finalise, publish and enact standards of practice for pharmacy technicians as soon as possible.
As for the HSA pharmacy itself, the OAG recommended, among other improvements, customer service training and ensuring sufficient financial information is available to monitor and report the profitability of the entire pharmacy.
The Health and Wellness Ministry did not respond in the report to its recommendations, which the auditor general called “both highly unusual and disappointing”.
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