How Indians cornered N2.5 billion from Nigeria’s Health Ministry
By Sun News Publishing
Saturday, July 22, 2006
It is not clear whether the alarm is genuine or it is just a desperation on the part of those who lost out in a juicy drug supply contract. But one thing is certain: questions are now being asked as to the why and how four Indian companies (including one that seemed to have come into existence few weeks to the opening of bid) cornered N2.5 billion contract in Federal Health Ministry.
But that is only one part of the story. As Saturday Sun undercover reporter discovers, the contract may have opened the way for a deadly cargo that may be on its way to Nigeria. EMMANUEL MAYAH obtains secret documents detailing the latest spinoff of a controversial Anti-Retroviral (ARV) drugs contract.
It is several weeks since the deal closed on what Abuja insiders now refer to as the latest jumbo contract; yet dirty details seeping out of the Federal Ministry of Health are already making the capital city stink to high heavens. As tongues begin to wag, with industry watchers becoming more bewildered by the day, the fear is rife that the shrewd grip of foreigners on the Nigerian economy is getting even tighter. Or how else would anyone explain the ease with which a whooping N2.5 billion health budget got into the kitty of some Indians without recourse to due process and in total defiance of the spirit of President Obasanjo’s reform agenda.
But that is the least of the worries of watchdog groups tracking events in Nigeria. Last week, the news finally filtered in that an international trade alert has been issued on one of the four foreign companies contracted to supply Anti-Retroviral (ARV) drugs to the Federal Ministry of Health.
A copy of the trade alert obtained by Saturday Sun revealed that countries, especially those in Africa, have been warned to be on the lookout for deadly consignments of ARVs manufactured by a South-Africa based company called Aspen.
The alarm was triggered after it was discovered that a container of Aspen Lamivudine 150 mg tablets contained a Glycron tablet (Gliclazide 80mg) amongst the Lamivudine tablets. The registration number was given as A38/2O.2.8/0343 and batch number as E184392. It is feared that more containers of batch E184392 are either in transit or have been supplied to unsuspecting countries.
The document further stated that despite the small round Glycron tablets (160mg mass) being very easily distinguishable from the larger diamond shaped Lamivudine tablets (320mg mass), there is nothing to stop the patient from swallowing it too.
Saturday Sun gathered that Glycron tablet is oral hypoglycaemic drug used to control blood sugar level in patients with type 2 Diabetic Mellitus. The implication of its ingestion by error is that a lot of patients with HIV/AIDS would have suffered a terrible lowering of their blood glucose level resulting in a condition refered to as hypoglycaemic shock with death as a consequence.
Since the trade alert, Nigeria is one country most seen to be at risk of Aspen’s blunder or sharp practices. This has inevitably become so, given the nature of the controversies dogging almost all of the ‘lucky’ companies favoured in the N2.5 billion deal, namely: Worldwide Ventures, Strides Accolades, Ranbaxy Pharmaceuticals and EBS. If the first three companies at least have a presence in drug manufacturing business, not a great deal is known of EBS. When it curiously emerged as one of the prefered bidders and observers, including this reporter had begun to make inquiry to the Federal Ministry of Health, wanting to know what EBS stood for, it was either nobody seemed to have a clue or the officials are keeping details of the company to themselves.
With nothing concrete coming from government quarters, unmasking EBS has been left to guesswork. One story that has gained acceptance among them is the one which has it that EBS is owned by some people and that they represent an interest in South Africa. Searching out EBS on the web has been equally herculean, even if nothing is found at the end of the serrendipituos search.
Industry watchers were particularly troubled because of the yet to be confirmed belief that EBS has no manufacturing facility, neither in Nigeria nor anywhere else in the world. In a classic case of voice of Jacob hand of Esau, they believe the company got qualified for the Nigerian contract on the basis of Aspen documents submitted to the Federal Ministry of Health. In other words, Ebs is representing Aspen in Nigeria.
Blueprint of deceit
Indeed, it couldn’t have happened anywhere but in Nigeria. Though no one can say for sure when the decision to award the N2.5 billion contract was taken, no sooner did vested interest begin to dig in for a kill. What followed could only be measured with the precision of a cold-blooded predator. By the time it ended, it was another sad story showing that President Obasanjo’s flagellations on reforms and transparency have continually been frustrated from within. At least, by the tribe of carnivorous businessmen crawling across various turfs of the Nigerian economy with the instinct of fortune hunters.
Saturday Sun investigations revealed that the sprint for the N2.5 billion booty may have quietly began, long before ministry officials blew the whistle. It was only three days to the close of submission (Monday, 5th June 2006) when a few indigenous players became aware that the Federal Ministry of Health had issued invitation for bids for the supply of Anti-Retroviral Drugs, Anti-Malarial Drugs, Anti-Tuberculosis Drugs and the execution of other capital projects. Curiously, the priviledged Nigerians who got this piece of news did so from the mouths of Indians, one of who came in for the bid from far away Asia. Though some of the Nigerians managed to file in their papers in the last hour, it was discernible that the foreigners and their Abuja cohorts had already sunk their teeth too deep into the big meat.
A dubious due process
As contained in some secret documents obtained by Saturday Sun, ministry officials in an effort to fulfill all righteousness, chose to observe the dictum of Due process by advertising the invitation for the bid in an obscure journal called Federal Tenders Journal, dated Monday 29th May, 2006. Specifically, the obscure advertisement, emanating from the Federal Ministry of Health read: “Invitation for pre-qualification of contractors for the execution of capital projects.
The Federal Ministry of Health invites interested and reputable contractors, pharmaceutical companies and suppliers with relevant experience and good track record for pre-qualification for the supply of the following: Lot(i), Anti-Retroviral Drugs, (ii) Artemisinin Based Combination Therapy (ACTs), (iii) Sulphadoxine Pyremethemine, (iv) Insecticide Treated Bed nets (both long lasting and king size), (v) Laboratory Equipment and Reagents, (vi) Anti TB Drugs, (vii) Computers, printers etc, (viii) Operational Vehicles (Toyota Prado, Hilux, Peugeot etc, (xi) Construction of Research and Training centre at the NBTS Zonal Office, Ibadan.”
Pre-qualification requirements stated for the contracts were that bidders must submit the following: (i) certificate of registration with Corporate Affairs Commission, (ii) evidence of current registration with the Federal Ministry of Health, (iii) evidence of current registration with NAFDAC (for Lot i,vi), (iv) evidence of current tax clearance, (v) evidence of VAT registration, (vi) evidence of experience with similar supplies in the last three years in Nigeria or other tropical country. Name(s) of client(s) and contract sum(s) should be provided for Lot i to vi; (vii) evidence of financial capability to handle the job; (viii) evidence of manufacturing facilities and their location (not P.O.Box).
This requirement must be met even when a bidder is an accredited representative of a manufacturer (for Lot i to vi only); (ix) name(s) and address(es) of banker(s); (x) company profile with names and qualification(s) of key personnel; (xi) evidence of current registration with regulatory authority in country of manufacture (for Lot i-vi only); (xii) evidence of Good Manufacturing Practices (GMP) with full details of in-house Quality Control Facilities and WHO pre-qualification (for Lot i to iii only); (xiii) foreign manufacturers should provide name and address of local representative in Nigeria with evidence of full registration with the pharmacists council of Nigeria (for Lot i to vi only).
It further stated that the sealed “complete pre-qualification documents should be deposited in the Tender Box in Room 1119, 11th Floor, Federal Ministry of Health, Federal Secretariat, Phase III, Ahmadu Bello Way, Abuja, not later than two weeks from the date of this publication. Tenderers should note that only qualified companies would be invited to bid. The Federal Ministry of Health reserves the right to reject any or all pre-qualification documents.”
It was signed by D. J.Y. Jiya, Director (Health Planning & Research) for Hon. Minister of Health.
Saturday Sun further gathered that bidders paid a non-refundable fee of N25,000 per Lot. Of course, that was only official. What went to junior ministry officials to do the right thing was a lot more and varied from person to person. Bids actually opened a little after 12 noon on 23rd June on 1st floor in the conference room of the Health Minister.
The ministry even made a show fo transparency and zero tolerance for corruption by threatening to throw out any bidder found offering, giving or soliciting for anything of value to influence the action of a public official in the procurement process or in contract execution. “We will declare a firm ineligible, either indefinitely or for a stated period, to be awarded a contract if it at any time determines that the firm has engaged in corrupt or fraudulent practices in competing for, or in executing.”
At the end, it was a case of “the more you look, the less you see.” Save for what one insider classified as the petty category, four companies won the juicy contracts. Amazingly, the four are Indian companies. Not one of the Nigerian companies got anything.
Running rings around the president
In the wake of the controversial N2.5 billion contract, suggestions are strong that the whole process was characterised by deceit, use of front companies, technical exclusion, capital flight and even economic sabotage. Unable to hide his exasperation, one industry player told Saturday Sun.” The recent occurrence in the Health Ministry leaves no one in doubt that Indians are in firm control of that ministry. None of the actions of that ministry as regards the award of the N2.5 billion contract was in consonance with President Olusegun Obasanjo’s economic principles. None of them was taken with respect to national interest. For all we know, the foreigners may be chuckling in the own country. The president can have his say but they will always have their way.
The only way of understanding how much damage has been done to the Nigerian economy with the manner that contract was awarded, is to imagine that some foreign firms have been contracted to import sand and gravel from overseas for a major construction in Nigeria. Why pay a foreigner to sell sand to you when there is abundance of dunes in your country? Can you possibly sell ice to an Eskimo? It is either he is foolish or both of you are fraudulent. The controversial contract in the Health Ministry is as bad as that.”
Piecing together the incredible manner in which the Indians had their way, Saturday Sun gathered that the pact between the foreigners and Ministry officials was such that big manufacturers in the Nigerian pharmaceutical industry like Evans and May & Baker were even said not to be aware that such a huge tender was being advertised by the Federal government of Nigeria.
Indeed the national scandal that has become the N2.5 billion Health contract is better told with the story of Fidson. It was gathered that as far back as three years ago when the issue of HIV/AIDS occupied the front burner, the importance attached to it was such that President Obasanjo made himself the national chairman of HIV/AIDS committee. There was this clarion call by the Federal Government to local manufacturers to do something in view of the high cost of Anti-Retroviral Drugs (ARV) imported into the country. In 2001, one of the ARV drugs was selling for as much as N32,000- N40,000 for a month’s dose.
In 2005, a company called Fidson Healthcare picked up the gauntlet, becoming the first local manufacturer of an ARV called Virex. It was followed a year later by another local company called Archy Pharmaceutical. Before then, Nigerians, especially officials of the Federal Ministry of Health occupied themselves making endless trips to Brazil in the name of seeking to transfer technology for the manufacture of ARV into Nigeria. With the benefit of hindsight, estacode appeared to be the prime motivation. The junketing lasted until Fidson, which had been manufacturing various drugs in Nigeria, came up with the Virex formulation.
Industry watchers said that if anything, the entry of Virex into the market helped to crash the prize of ARV drugs. Given that today, imported ARV which used to sell as high as N40,000 now goes for N3,000 or less, it became clear that multinationals, under whatever guise, were just ripping off the government and the people.
It was gathered that while everyone thought that Fidson was the first ARV manufacturer only in Nigeria, the Director General of NAFDAC, Prof. Dora Akunyili set the record straight that the Nigerian company was actually the first in sub-saharan Africa. Seeing how proud Fidson had done the country, it was not surprising when the Health Minister and other officials began to share in the glory, saying that it was their fine policy that gave Fidson the inspiration.
Expectedly, it was not long before an elated President Obasanjo visited Fidson’s plant located in Ota, Ogun State. Impressed by what he saw, the president was said to have assured the local manufacturer of the necessary government patronage. What followed, however, was an anti-climax. Till today, neither the Ministry of Health nor government agencies like NACA (National Action Committee on Aids) has shown any willingness to translate the president’s wishes for local ARV manufacturers.
Mr. Steve Aborisade, Editor-in-chief of an online magazine, NigeriaHivinfo.com, told Saturday Sun that given his line of work on HIV/AIDS, it was only a matter of time before he heard about Fidson and Archy. He said he saw no reason why local Nigerian companies could not win the bid. “The fact that a regulatory authority in Nigeria like NAFDAC licensed them is an indication of the quality and reliability of their products. Everybody agrees that these people have achieved a feat, especially when you consider that Virex has the added advantage of faster disintegration time in the body over imported ARV.
What more, they have helped reduce drastically the prize of ARV. We should be proud and celebrating the success story of our local manufactures recorded in the life of the Obasanjo administration. So what exactly is going on?”
It was gathered that given its very nature, ARVs are not something sold across the counter like a cough syrub or an analgestic. Medium of sales is direct purchase from state and federal governments, ministries, agencies like NACA or corporate organisations through which end users get their supplies. It is said that high quality and different ranges of ARVs like Virex-L, Virex-N (paediatric syrub for children), Virex-Z, Virex-LZ (double fix) and Virex-LZN (triple fix) are produced by indigenous pharmaceuticals.
How Nigerian companies were excluded
If the shrewd and secret manner adopted by the Health Ministry helped to keep companies like Evans and May & Baker in the dark, those who thought they were lucky to have entered the bid were eliminated by the ministry, using a hurdle called WHO pre-qualification.
Saturday Sun investigation revealed how the Federal Government tender was carried out. First, the companies were required to submit documents for the lots they were interested in. Those found to be qualified were asked to pay for their tenders bidding documents. It is the bidding document that will enable the companies to quote.
For those interested in ARV, ACTs (anti-malarial), sulphadoxine pyrimethemine (another anti-malarial) and anti-TB drugs, all manners of requirements were listed to enable them qualify for participating in each of the Lots. For Lots 1, 2, and 3, it was said that interested companies must possess WHO pre-qualification. One insider who witnessed the last controversial bid dismissed WHO pre-qualification as a political gimmick introduced by the West, first and foremost, to safeguard their interest.
The analyst who prefered anonymity explained: “It is like this: Whatever donations the West are giving to you, they use the WHO to give to you with one hand and use the same WHO to collect back even in multiples, using the other hand. So, if the whiteman introduces WHO pre-qualification for their international funds, it does not provide basis for accessing your tender, especially when you are spending your local fund.
It is not an overiding document over a country’s national regulatory body like NAFDAC. By introducing WHO pre-qualification, the Federal Ministry of Health is saying that they do not recognise all the good works of NAFDAC. They are now making her efforts to look lower in status and quality to the Indians because most of the things she has approved, registered, and certified fit for human consumption are now being turned down by the Health Ministry in preference for Indian products; the same Indians Akunyili has fought for years over fake and substandard drugs.”
Saturday Sun gathered that in its desperation to use WHO pre-qualification to disqualify indigineous companies, the Ministry of Health contradicted itself by shortlisting them for anti-malarial and anti-Tuberculosis yet failed to do so on ARV. Curiously, the same conditionalities apply to the three Lots. One of the companies that was favoured has no local evidence of a manufacturing facility even when it was clearly stated that “this requirement must be met even when a bidder is an accredicted representative of a manufacturer”.
The industry insider further told Saturday Sun that the Health Ministry officials are putting all kinds of smokescreen to disqualify those they do not like. “It is because they have their own people. It is in ARV that the big meat is. The Ministry is spending almost N5 billion this year just on ARV. About N2.5 billion is being spent in this exercise. In another four months, the second phase will come up.”
Investigations further revealed that none of the companies given the ARV Lot manufactures the drug in Nigeria. The only remote exception is Ranbaxy thought to be manufacturing liquid ARV. But industry watchers have another position on this. They are quick to point out the difference between manufacturing locally and bottling imported finished stuffs.
“Everything most of these companies supply the Federal Government comes right down from India, thereby enriching their own economy, providing more jobs for their people and fully utilizing capacities of their industries, yet our own officials do not see all these. But even some of the people at NACA, for example, have an apparent disdain for local manufacturers.
As the rebuff of local manufacturers of ARV continued, observers were unsure of what to make of the event of Monday, July 3 when the Federal Government set up an inter-ministerial committee under the leadership of the Health Minister, Prof. Eyitayo Lambo, to implement the initiative of increased local production of HIV/AIDS drugs.
At a meeting in the Presidential Villa Abuja, President Obasanjo directed that concerted action be taken to provide cheap locally- produced ARV in the country in order to sustain the treatment initiative for those infected with the disease.
Meanwhile virtually all the stakeholders have kept mum over the trade alert on Aspen. Many telephone calls by Saturday Sun to the Federal Ministry of Health Abuja yielded no answer as to whether EBS consignments have been intercepted or have actually arrived the country.
But like Saturday Sun also discovered, it appears some of the local manufacturers are playing up the trade alert on Aspen, as a result of its perceived link with EBS, to bring about a disqualification of the bid winner. But details of that will come in the second part of this report, especially as Aspen is said to have ordered a withdrawal of the controversial consignment.