Almost half of the purchasing budget spent by the Andalusian Health Service (SAS) in Huelva in 2021 was managed through minor contracts, a legal figure of public procurement that allows up to 15,000 euros to be awarded directly to a supplier with a minimum of controls. designed for the acquisition of low-value materials and services.
This is just a detail of the detailed report of the Intervention of the Junta de Andalucía – the Treasury body responsible for internal control of public accounts – which explains how the Executive of Juan Manuel Moreno Bonilla managed the budget of health during the 2021 financial year. The auditors accuse the regional government of having “abused the minor contract in fraud of the law” and “fragmented the contracts in an inappropriate and massive manner” during the year that followed the start of the pandemic, as elDiario.es discovered. More than 458 million euros were distributed by chaining and splitting small contracts.
The Minister of Treasury and spokesperson for the Council, Carolina España, responded to the information saying that Andalusia was not the only one, but on the contrary it could happen in other communities and also within the Central Executive. “I would also like to know the reports of all the autonomous communities and the Spanish government for the year 2021, in the middle of the pandemic, I would also like to know them,” he said on Tuesday.
Beyond the particular case, the consequences of which are still uncertain, these practices do not occur in isolation in health administration, admit a host of experts in health planning and management consulted in this way, even if everything also depends amounts spent with this formula. They are justified in most situations by the need to obtain medicines or equipment in time to meet patient requests, which can lead to abuse.
“Within the industry, the prevailing view is that current contract law is too rigid and dysfunctional for healthcare. But when contracts are divided by necessity, there are many who put lettuces between the cabbages for their personal advantage,” warns José María Repullo, professor emeritus and expert in health planning and health economics at the National School of Health .
This would be the root of the problem, recognizes Sergio García, member of the Health Economics Association (AES) and former director of public and private hospitals. “The important thing is to inspect so that we do not abuse this formula. If we have millions and millions spent like this, such large sums of money, we have to ask ourselves what is being done. It is mainly for agility, but it may be that you are my colleague and I want to help you buy specific equipment,” explains García, who gives the following example to understand daily situations that may require the use of multiple minor contracts. for the same object. “Imagine you drop the endoscopy tube. You have to throw it away. If they ask you 50,000 euros for this, you have no budget and you need an urgent purchase because your equipment is brand x, what do you do?
This is something very politically sensitive and no one would understand that we should stop purchasing a medicine, but another thing is that it is systematically used for other purposes.
Carlos Amoedo, professor of administrative law at the University of La Coruña
Health administrations share, says Carlos Amoedo, professor of administrative law at the University of La Coruña, “a broader procurement path than other departments, they generally have control a posteriori and a bull to use a minor contract and extensions for years. “It is something very politically sensitive and no one would understand that it is necessary to stop the purchase of a medicine, but another thing is that it is systematically used for other benefits”, continues the expert, which speaks of a certain “political and administrative consensus”. that health spending can have a hiring accelerator.
However, the reports of the Andalusian intervention reveal that this subcontracting formula was used not only to purchase medicines or clinical equipment, but also to remodel the entire floor of a hospital – broken up into small invoices like fittings. individual masonry –, for taxi bills, private security companies, couriers, stationery and even repair of Christmas decorations. Expenditures that are difficult to justify as “urgent” or “unforeseeable”, according to auditors.
“Hit the druggies”
The National Public Procurement Strategy 2023-2026 mentions this problem: “there is sometimes inappropriate use of minor contracts and abuse of emergency contracts due to assumptions which do not justify the choice of said procedure” . The document discusses another factor that has not been in favor of transparent procurement: the emergency procedures that health officials have constantly resorted to during the pandemic.
The procedures established by law must be followed so that the companies or entities that present the best offers win. The opposite is to distribute public money among a few friends who own companies in the health sector.
Fernando Acuna
— public procurement lawyer
“This period made hand-picked awards more widespread and this created a complement to emergency contracts. They hire drug addicts. Using the broad sleeve for prescribing and purchasing a medicine is even understandable, but using it for other types of benefits is serious,” says Amoedo. Precisely, the auditors of the Andalusian Health Service published another report a few months ago which highlighted the abuse of this type of contract with the “very temperate” pandemic and the exceptional legal framework of the pandemic already repealed. The Moreno government extended these emergency contracts, at least until the end of 2023, and suspended them after elDiario.es revealed that the Ministry of Health continued to extend them in a desperate attempt to get the lists under control. uncontrollable waits of patients for surgery and diagnosis.
“Public money cannot be distributed in a discretionary manner. The procedures established by law must be followed so that the companies or entities that present the best offers win. And thus offer the best possible public services, in terms of quality and price, to citizens. The opposite is to distribute public money among a few friends who own companies in the health sector,” analyzes Fernando Acuña, public procurement lawyer.
The Independent Office for Market Regulation and Control, a collegial and independent body of the General Administration of the State, states in its latest annual report that 9% of complaints concerning markets occur due to “splitting of the object of the contract”.
The Madrid precedent
There are known examples from the past. The Chamber of Accounts of the Community of Madrid revealed in an audit report that the regional government led by Cristina Cifuentes had awarded almost 570,000 small contracts worth 802.8 million euros during the financial year 2017. 94% of these contracts came from the Madrid Health Service. (SERMAS). “Small public contracts in public hospitals are carried out in a generalized manner, making what is an exception in public contracts a common practice,” denounced the control body. elDiario.es discovered, two years earlier, a modus operandi usual and opaque in SERMAS to buy medicines.
Then, the Ministry of Health of Madrid affirmed that this form of fragmentary contract responded to a purchase “on demand” of the number of patients who need it and to a need for greater speed, so that “the medicines arrive at time” are given priority. They also justified that if the drug is manufactured only by a laboratory, the public tender does not make much sense. Trading without advertising “involves more time and puts many administrators to work,” they argued.
Rethink the law?
Part of this argument is shared by the health sector. “The inelasticity of demand for medicines, the disadvantages of interchangeability between medicines and the consequences that the patented medicine has on the market are circumstances that directly affect public procurement, causing the existence of multiple controversial aspects in the tender procedure”, underlined an article published in 2022 in the journal Derecho y Salud, of the Association of Health Lawyers, which asked to move away from the “ordinary watertight procedure” and “to explore other procurement possibilities” because it is not suitable, for example, for the purchase of medicines subject to patenting.
“As with many other subjects, it would be necessary to rethink the contractual system in a sector like that of health, where we are asked to do things without delay and where the unit prices of medicines and other supplies are very high when compared with other sectors,” he adds.
One of the large pharmaceutical companies that have been awarded hundreds of small contracts in Andalusia is Roche. The company admits that mass fractionation is “questionable because it is technically incorrect when all the circumstances established by law are not met”, but also warns that this system “is not beneficial” for its company.
“Overreliance on minor purchases of medicines often results in delays in collection for providers (due to lack of budget allocation),” he concludes. And he assures that Farmaindustria, which brings together companies in the sector, has repeatedly proposed the possibility of regulating a simplified system of public procurement of exclusive medicines (where there is a single supplier for the medicine), in order to reduce the administrative burden for hospitals. » This solution, continues a spokesperson, has been promoted by certain communities, “even if a change in state regulations would be necessary”.
