The government should preserve the possibility of international procurement of medicines along with other mechanisms of public procurement

Interfax-Ukraine News Agency of September 18th, 2019.

Expert opinion of Dmytro Aleshko, partner and attorney at Legal Alliance Company.

The government should preserve the possibility of procuring medicines at the expense of the state budget, along with the possibility of applying other mechanisms of budget procurement, says Dmytro Aleshko, a partner and attorney-at-law at Legal Alliance Company.

Commenting to Interfax-Ukraine News Agency on the adoption of the new edition of the Law on Public Procurement in the first reading, the lawyer stated that the text of the new edition does not contain the point that the law does not apply to the procurement of medicines and medical devices through international specialized organizations.

"International procurement is currently governed by a separate law, which was adopted on March 19th, 2015. In such circumstances, it would not be possible to continue international procurement," he said.

Mr. Aleshko reminded that after voting for the new edition of the law on state procurement, the chairman of the specialized committee of the Verkhovna Rada Mykhailo Radutskyi and MP Olga Stefanyshyna stated that changes would be made between the first and the second editions, which would allow to continue procuring medicines through international organizations for two more years.

The lawyer emphasized that "historically, experts' opinions on such procurement have been divided into two rigid opposing positions: for and against".

"I will try to approach the evaluation of procurement through international organizations in a balanced way. Yes, the obvious advantages of international procurement can be attributed to elimination of the corruption component (procurement is carried out in accordance with UNDP, UNICEF, and Crown Agents internal rigid procedures); prices for some medicines are significantly lower than those at which the Ministry has procured products earlier, which saves large amounts of taxpayers money; more and more foreign manufacturers have started to supply medicines directly through international procurement,” he said.

However, according to Mr. Aleshko, some of the disadvantages of international procurement are long delivery waiting term, which sometimes exceeds more than 1-1.5 years, and 100% pre-payment by the Ministry of Health of Ukraine for medicines and medical devices in 1-1.5 years, when "UAH 6 billion of prepayment works for the economy of other countries", as well as the fact that such procurement starts annually in the second half of the budget year, since the law under which the procurement is delegated to international organizations is written in such a way that it takes six months for the Ministry of Health to select international organizations, although they are the same from year to year, to approve the nomenclature, and sign the contracts.

"It is compounded by the bureaucracy inherited from the Soviet system of government," added the lawyer.

Mr. Aleshko also stressed that "the delegation of procurement to international organizations in 2015 became the first experience for Ukraine". "Moreover, none of the European countries has dared to transfer all 100% of centralized procurement to international organizations. Therefore, it was difficult to write a perfect law at that point. However, there is now an opportunity of correcting some issues, given the speed of adoption of regulations by the current Verkhovna Rada," he said.

"In my opinion, procurement of medicines and medical products should be continued for a new period. Most importantly, the possibility of such procurement should be left to the government of Ukraine as an option. The state, represented by the Cabinet of Ministers and the Ministry of Health of Ukraine, should decide who can more effectively lower cost and provide quick delivery of quality medicines for our patients. It may be one of the international organizations or a centralized procurement agency SE “Medical Procurement of Ukraine”, or it may be a direct long-term contract with a manufacturer," underlined Mr. Aleshko.

Nevertheless, according to the lawyer, to settle the situation in the field of state procurement of medicines, it is necessary to amend the law of March 19th, 2015, which launched procurement of medicinal products through international organizations, and "remove the bureaucratic component complicating the process of procurement".

In addition, Mr. Aleshko considers it necessary "to implement as soon as possible an electronic system of balances accounting, which would allow seeing on-line balances of goods anywhere in Ukraine and allocating them among regions". The Ministry of Health also has to hold serious negotiations with international organizations and agree on delivery terms acceptable for our country and patients of those medicines that are procured from year to year and the suppliers of which are known.

"As you can see, all the problems can be solved. There are procedures. All we need, as it is fashionable these days to say, is political will," emphasized Mr. Aleshko.