Central procurement agency to distribute medical goods

The decision to set up a CPA under the health ministry was taken at a cabinet meeting chaired by Prime Minister Manmohan Singh. Aimed at efficient procurement and distribution of health sector goods, the agency will also help the government curb wastage, thus leading to savings.

The idea was also to eliminate shortages in the states of medical goods like vaccines and contraceptives, a statement issued here said. The cabinet also approved one-time budgetary support of Rs.50 crore to establish the CPA.

"Thereafter, CPA will charge a service fee, which will be well within the overall ceiling of five percent of the value of procurement, to meet its subsequent operational expenses," the statement said.

However, certain deficiencies such as inadequate professional procurement expertise, absence of supply chain management system, manual collection of data and absence of any credible Management Information System (MIS) have been adversely affecting the procurement, the statement added.

"Therefore, a professional, autonomous and efficient organization is being established to eliminate these deficiencies and streamline the procurement system," it added.
The creation of a new agency will put in place a transparent and competitive system for procurement so that goods are procured at competitive rates.

Also, it will help in setting up and managing an efficient supply chain keeping service as the prime motive, preventing stock-outs and reduction in wastage due to excess inventory and improving the quality control system so that the end-user gets quality products. At the moment, the health ministry procures drugs, vaccines, contraceptives and medical equipment for its various disease control programmes departmentally and through procurement agents.