Hospitals purchased medicaments for CZK 5.5 billion without open competition, the same products were acquired with multiple price differences

Press release for audit No 16/28 - 20. 11. 2017

The Supreme Audit Office focused on the management of three selected hospitals in the period 2014 - 2016, namely Nemocnice Na Homolce (Na Homolce Hospital), Fakultní nemocnice Ostrava (University Hospital in Ostrava), and Fakultní nemocnice Plzeň (University Hospital in Pilsen). The audit mainly focused on the purchase of drugs, medical devices, and some services. It revealed shortcomings regarding the way how the hospitals used medicaments and medical devices. Auditors also selected a sample of the same 44 medical products and 132 medical devices and compared the prices at which these hospitals were purchasing. The comparison showed that hospitals were buying identical medicine and medical supplies from the same suppliers at different prices, in many cases there were multiple, in an extreme case a tenfold difference.

In 2014 - 2016, hospitals purchased medicinal products for more than CZK 5.5 billion without a procurement procedure, often directly from producers or distributors. In most cases, these medicinal products were purchased without any contractual relationship, only on the basis of orders. For example, Fakultní nemocnice Plzeň purchased medicines from more than 200 suppliers in 2016, but signed a contract with only 34 suppliers. A similar situation occurred in the other hospitals.

Hospitals acted similarly when purchasing medical devices. In 2014 - 2016, Fakultní nemocnice Plzeň purchased medical devices worth more than CZK 1.2 billion without a procurement procedure. Nemocnice na Homolce purchased medical devices for CZK 2.6 billion almost exclusively through its subsidiary company without a competition as well. When purchasing both medicines and medical devices, such a procedure is not in accordance with the law and represents a non-transparent practice that runs counter to the principles of efficient and economical management of public money.

Auditors also focused on the purchase prices of selected medicine and medical devices. In an audited sample of 44 kinds of medicine, there were 38 differences in the prices at which individual hospitals purchased identical products - the differences in prices reached from several per cents to multiple per cents. The purchase of the antibiotic Amikacin is one of the most significant as the price difference was tenfold. The hospitals purchased Amikacin for CZK 82, but also for CZK 820. In the case of Piperacillin/Tazobactam, the difference between the lowest purchase price of CZK 770 per pack and the highest purchase price of CZK 2,125 was almost threefold. For Avastin, the difference was double - CZK 15,620 per pack compared to CZK 30,953. In the audited period, average differences in prices for the same medicine were about 50 percent.

The purchase of identical medical devices - pacemakers, cardioverters, stents, or, for example, valves was similar. In 2014, the audited hospitals purchased identical stents, in this case from the same supplier, for CZK 16,374 but also for CZK 59,932. Differences were found by auditors also in 2015 for deliveries of an identical catheter (from one supplier as well), which the hospitals purchased for CZK 2,450, but also for CZK 15,937.

Prices of medicinal products and medical devices have also been affected by financial bonuses, often provided by a supplier, for example, when purchasing more goods or fulfilling other conditions. The SAO could not verify the actual price of medicinal products and medical devices after taking into account the financial bonuses because of the way how the hospitals kept bonuses in their accounting. For this reason, it is impossible to verify what the money from these bonuses was used for. The hospitals have stated that they use them, for example, to pay for health care in underfunded sectors. In some cases, bonuses were agreed only verbally. The hospitals did not take into account the sums received from bonuses to the insurance companies in the billing for healthcare provided. Bonuses for the years 2014 to 2016 in audited hospitals ranged from CZK 127 to 491 million and had a significant impact on their management.

The SAO also examined how the Ministry of Health had fulfilled the role of a founder of these hospitals. It was found out that between 2014 and 2016 the Ministry of Health carried out only one public-administration audit at these hospitals. Also, there has been created no comprehensive concept for hospital management and development in general so far.

Communication department
Supreme Audit Office

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