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What are the threats of excluding medical devices from the Law On Public Procurement?

15/ 01/ 2020

The European Business Association expresses its concerns regarding the Draft Law of Ukraine №2563[1], which was registered by the Verkhovna Rada of Ukraine on December 10, 2019. It proposes to exclude medical devices from the Law of Ukraine “On Public Procurement.” In other words, bidders are advised not to use the ProZorro web portal to make purchases.

Unfortunately, this initiative can cause corruption risks. Relevant provisions of the Draft Law would shift the purchase of medical devices into a non-transparent area. In fact, even the concept of “bidding” would be questionable as makes it sufficient for the participants just to conclude a contract while the process of choosing the optimal supplier of the required products would be uncontrolled.

According to the EBA experts, financial losses of the state due to inefficient spending the state budget funds are likely to be the result of this legislative initiative. Also, one would say nothing of further improvement of the Prozorro system and the promotion of competition among medical device manufacturers.

Please see the following data on medical devices purchase based on Prozorro. As a result of the open tender procedure, in 2019 the contracts were concluded for the total amount of UAH 8.19 billion for products from the group “33100000-1 Medical Equipment”[2]. The estimated value of the respective lots in this group amounted to UAH 8.85 billion. nualAn savings amount to approximately UAH 660 million as a result of tendering procedures for this product category. Will the state-owned and municipal health care establishments provide the same or higher cost savings in the absence of public bidding? The question is rhetorical. 

Unfortunately, the explanatory documents to the Draft Law do not substantiate the proposed change. Therefore, the reasons remain unclear. It should also be noted that the term “devices for medical use” used in the Draft Law is not used in the effective legislation of Ukraine. Therefore, there is an obvious need for additional analysis of the Draft Law.

The EBA Health Care Committee appealed to the MPs of Ukraine – the authors of the Draft Law – asking for its revision and removal of the relevant provision. The EBA Committee members stand for open, clear, unambiguous and transparent rules. We hope that the risks will be eliminated and that the medical device market in Ukraine will continue its development under fair conditions of competition. 

 

[1]  http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?id=&pf3511=67589

[2] За даними порталу bi.prozorro.org

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