Medicine supplies corporation’s delay in clearing bills irks pharma firms

Despite providing life-saving medicine and testing kits during two waves of the pandemic, several medical suppliers are forced to run from pillar to post to clear bills in excess of Rs 100 crore from the Karnataka State Medical Supplies Corporation Ltd (KSMSCL). Some bills are due for the last two years, the suppliers have alleged.

Suppliers allege that the delay in payment has hurt the finances of the company and stopped them from bidding for other government tenders. Several companies have now written to T K Anil Kumar, Principal Secretary, Health and Family Services to ensure that the payments are made at the earliest.

However, KSMSCL managing director K S Latha Kumari said that the allegations were far from truth as 80-90% of the payments were complete. Some of the payments are due because reports on empanelled labs, on quality of medicine and other required documents were yet to be assessed.

DH spoke to three pharmaceutical firms which supplied medicine and other equipment to KSMSCL, formerly Karnataka State Drug Logistics and Warehousing Society. According to an executive of one company, despite assurances during the pandemic that payments for medical supplies will be made within a month, firms were kept waiting for almost two years in some cases.

“We request your immediate attention in helping us with the payments” as we are small traders and have borrowed money from banks and are paying high interests, one of the firms wrote. Another company highlighted that close to Rs 3 crore was due “for want of QC (quality compliance) report” from government labs. Though the lab has submitted a report more than a month ago, payment was delayed.

Noting that he had given representation in the payment Adalat, he sought “release of payment immediately” since the company was in financial trouble because of the delay. Another firm threatened legal action as the payment delay had affected their payment cycle.

The payments due were in excess of Rs 100 crore, they contended.

Anil Kumar said that he had received written petitions on Monday. “I just got the letters today. I will find out what the quantum of pending payments are and address their concerns in two to three days,” he
said.

Latha Kumari maintained that there was no unnecessary delay in payments. “Those complaining are afraid of penalties due to delay in supply or for supplying medicine which have very low shelf life. There are hundreds of such issues. They are trying to arm twist us and ensure payment,” she said.

These complaints are now being raised because the department has been able to reduce influence of middlemen. Moreover, 80-90% of all payments are completed on time, she said.

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