The Tribune

A well-known surgeon has branded the Public Hospitals Authority’s (PHA) move to exclude Bahamian wholesalers from the pharmaceutical drugs supply chain as “penny wise and pound foolish”.

Dr Duane Sands, the FNM senator, told Tribune Business that while the PHA may feel it can save money by purchasing direct from drug manufacturers, any benefits would be outweighed by other costs to the Bahamas - especially to patients.

He explained that the ‘direct purchasing’ move, through overturning an established supply chain that has functioned effectively for decades, would eliminate “the many layers of protection for public health” that are provided by Bahamian wholesalers.

“This is another distressing concerns,” Dr Sands said of the PHA’s logistics/procurement switch. “There appears to be a move to upend the entire apparatus of drug distribution and acquisition in the country.

“That has the potential to wipe out a lot of the insurance and safeguarding layers, particularly for patients.”

Tribune Business revealed on Friday how the PHA is seemingly intent on pursuing its ‘direct purchases from manufacturers’ strategy, despite the opposition and numerous warnings that it will be counter-productive.

Dr Marvin Smith, the PHA’s pharmaceuticals supply chain management chief, referred Tribune Business to the Authority’s spokesperson, Judy Terrell. The PHA subsequently responded to this newspaper’s questions (see other article on Page 1B)

Dr Smith’s November 3 e-mail to pharmaceutical manufacturers confirmed the PHA’s intention to exclude Bahamian wholesalers, as he said: “I am not authorised to have any discussions as it relates to inclusion of local vendors in this process.”

This followed his October 31, 2016, e-mail to the same readership, in which Dr Smith, director of the Bahamas National Drug Agency (BNDA), seemed to justify the ‘go direct’ move on the grounds that it had not received satisfactory bids for many of the drugs tendered in the latest procurement round, ‘MPC 16’.

Dr Sands said the PHA appeared to be operating on the rationale that it could save money by purchasing cheaper ‘generic’ drugs directly from manufacturers, as opposed to acquiring more expensive ‘brand name’ pharmaceuticals.

“On the face of it, you might think that’s a reasonable idea,” he told Tribune Business. “But there are many benefits provided by the local, mature wholesale industry.

“They provide multiple layers of safety, education and training, provide back-up for recalls, provide access to alternatives, and provide access to branded and generic drugs.”

Dr Sands and others also questioned whether ‘direct manufacturer purchases’ would generate any significant cost savings, given that the PHA would have to take over the role and functions previously performed by the wholesalers, and presumably incur the same expenses.

These functions include purchasing/ordering, shipping, credit, inventory management and storage.

“This is an example of penny wise and pound foolish,” Dr Sands argued to Tribune Business. “In one fell swoop, to save a couple of dollars, we wipe out a significant industry.

“Two, you destroy many of the layers of protection for public health. Three, the issue of transparency comes to mind. Who’s going to be purchasing and vetting these products now? Is there going to be a middleman?”

Bahamian wholesale industry concerns over the PHA’s ‘go direct’ strategy for completing the MPC 16 tender have been exacerbated by the opening of its new warehouse storage unit for pharmaceuticals on east Shirley Street.

While such a facility could aid a ‘direct purchasing’ strategy, these fears have been pushed to further heights surrounding the Government’s drug procurement strategy under NHI, which is presently unknown.

Dr Sands, though, argued that it made no sense to bypass a local industry that provided significant ‘added value’ for the Bahamian public, especially patients, and helped to safeguard public health.

“They’ve been knocking at this door for a while,” Dr Sands added of direct purchasing. “The idea is that cheaper is clearly better, generic versus branded, because we can provide more pills for less money.

“But that doesn’t necessarily mean that you get quality. The suggestion that elimination of an entire industry, or bypassing an entire industry, is going to be to the benefit of the Bahamian public is something that needs to be tested. They perhaps need to have a pilot programme and compare the results.”