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The importance of being Nestor Pharma

July 02, 2003 14:28 IST

Run your eyes through several bids for pharmaceutical products by the ministry of health's family welfare division, and you cannot possibly miss the name Nestor Pharmaceuticals.

It's generally down there, towards the bottom of the bid-summary (which means it is not among the lowest bidders), but curiously, all the competitors get disqualified on some ground or the other.

The evaluating agency is Hindustan Latex Limited, a public sector unit which does the buying on behalf of the Minister of Health & Family Welfare.

The competitors who are being disqualified, interestingly, are not small bit players, but they are large firms like ICI and Hindustan Antibiotics which, in several cases, are leading manufacturers of the drugs they are quoting for.

For the record, both Nestor Pharmaceuticals Ltd, and Hindustan Latex deny any allegations of impropriety, and family welfare secretary J V R Prasada Rao refused to comment on the matter despite two days of telephone calls, and then a faxed questionnaire to him on June 13.

All the cases quoted, and the prices offered by various pharma firms, in the story are from the Department of Family Welfare's own agenda notes for the year 2000-01.

About Rs 200 crore of medicines are bought each year for this programme which is funded by the World Bank.

Take the case of the 69,500 packs of Cephlaxin capsules that Hindustan Latex called a bid for. Centurion Laboratories' bid of Rs 117.50 per pack was considered 'non-responsive', the ministry's notes say, because the "bid form was not filled by the bidder".

Hindustan Antibiotics which is one of the country's bigger producers, found its bid of Rs 132 getting rejected because 'clients certificate not attached' -- Hindustan Antibiotics cannot produce without having a quality certificate from the Drugs Controller.

In the event, Nestor which was the highest bidder at Rs 132.84 per pack won the bid.

In the case of Pancuronium Bromide injection, five firms bid. Infar India, one of the first to produce this injection in the country, bid Rs 410. ICI bid Rs 472.5.

Infar was disqualified because the quality certificate was "not furnished", and ICI for not having sold at least 20 per cent of the bid quantity in any one of the last 5 years -- this is curious, since the bid was just for 11,600 units of the injection, while ICI's production in that year was 173,000 pieces. Nestor, which bid Rs 524, won the tender.

Even more interesting is the case of Etophylline BP plus anhydrous theophylline injections.

Merrell Pharmaceuticals which quoted Rs 67.5 per injection was rejected because it "quoted for Etophylline IP against our specs of Etophylline BP."

Nestor, however, also quoted for Etophylline IP, but this was accepted.

Why? Because Hindustan Latex took the trouble to contact the Drugs Control Department, and they said the deviation was acceptable.

It still doesn't explain why Merrell's bid wasn't accepted, and why in earlier cases, Hindustan Latex never got back to the companies to get additional information and/or their quality certificates. Nestor won the bid at Rs 69.

In another case, involving powdered latex gloves, MRK Healthcare quoted Rs 243 per pack and said the sales tax was nil. Another firm, Kanan Latex, quoted Rs 240 plus a 4 per cent sales tax.

Hindustan Latex got back to MRK which now said its bid actually included sales tax. So, 4 per cent was deducted from its price which now became Rs 233.65. MRK won the bid.

While saying he was unaware why the bids of the others were rejected, Pardeep Chaudhry, vice president Nestor Pharmaceuticals says, "You will appreciate that if the market leaders suspect any wrong doing, they could have easily gone for a judicial review."

Vasant Bhat, general manager, procurement, for Hindustan Latex, says the company has "strictly followed all the rules and procedures", and denied all the allegations. He did not, however, reply to any of the specifics of the cases.

Sunil Jain in New Delhi