Health Policy

Ministry of Health will form company to buy drugs

eHEALTH BureauIn its first significant move towards bringing about more transparency, the Health Ministry has decided to set up a company, with independent directors on board, to procure drugs and equipment to be distributed to state-run medicare centres. The ministry itself will maintain an arm’s length, restricting itself to policy-making and monitoring. At present, the procurement effort is fully managed by the ministry itself.Procurement of drugs and equipment is a INR2,500-crore business for the government today but is plagued with frequent changes in personnel, allegations of leakages, red-tapism and wasteful expenditure. Further, it does not have a supply chain to speak of and delays in tendering, ordering and payment have made the system inefficient. The ministry itself concedes there is a lack of standardisation of procedures and trained manpower.It has now sought the Planning Commission’s approval for setting up a Central Procurement Agency (CPA) on the lines of Tamil Nadu Medical Services Corporation Ltd, a procurement company set up by Tamil Nadu. The CPA is proposed to be headed by a full-time Managing Director (in the rank of Additional Secretary) and supported by a Board with independent directors. “The Board will be empowered to take all decisions without any reference to the ministry,” the proposal said. The CPA would be a lean organisation, technology savvy, MIS-based and will assist weaker states with capacity building.

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