Medicine price gap: KMSCL spends Rs 190 crore extra on procurement

THIRUVANANTHAPURAM: Medicines that could have been procured for a maximum of Rs 772 crore were purchased by the Kerala Medical Services Corporation Ltd (KMSCL) for Rs 962 crore last year, resulting in an additional expenditure of Rs 190 crore, according to a comparison of procurement prices. The discrepancy emerged from a comparison of the rates at which the same companies supplied the same medicines to the In-House Drug Bank (IHDB) of Thiruvananthapuram Medical College and KMSCL.

The Health Department reported the procurement price differences to Health Minister K. Muraleedharan. The minister subsequently directed that whenever a medicine is available to another institution at a lower price, KMSCL should procure it at a rate lower than that price. The directive could enable KMSCL to purchase medicines at prices 20% to 25% lower than the rates currently being paid. If implemented, the move is expected to make quality medicines from reputed brands available to the public at lower prices.

The development comes amid longstanding allegations regarding the procurement of certain medicines by KMSCL. Some of the medicines purchased by the corporation have been alleged to be manufactured by fake companies.

The Health Department had also received indications that medicines were being purchased at inflated prices to facilitate the payment of commissions through intermediaries. According to the information received by the department, commissions amounting to at least 10% of the bill value are being paid. The minister's move comes despite opposition from some officials.

Price difference as high as 82%

The price difference is particularly significant in the case of the antibiotic tigecycline. KMSCL purchases the medicine for Rs 1,008, while the In-House Drug Bank of Thiruvananthapuram Medical College purchases the same medicine for Rs 179.39. The difference is Rs 828.61, meaning KMSCL pays 82% more for the medicine.

Price comparison (in rupees)

“Comprehensive restructuring is under way at KMSCL to ensure that quality medicines are made available to the public. The changes will be visible in the coming days.”

— K. Muraleedharan, Health Minister