Medical supplies to 27 BMC hospitals suspended over dues worth ₹120 cr

Mumbai's AFDLHF halted medicine supplies to 27 BMC hospitals over ₹120 crore in unpaid dues, promising to review the decision after BMC's assurance.

Mumbai: The All Food and Drug Licence Holders Foundation (AFDLHF), which represents over 150 vendors of drugs and medical consumables, on Monday stopped supply of medicines to 27 hospitals run by the Brihanmumbai Municipal Corporation (BMC), saying unpaid dues had reached ₹120 crore. The BMC gave a written assurance that the dues would be cleared by February 15, after which the foundation said the decision would be reviewed during its meeting on Tuesday.

The All Food and Drug Licence Holders Foundation (AFDLHF), which represents over 150 vendors of drugs and medical consumables, on Monday stopped supply of medicines to 27 hospitals run by the Brihanmumbai Municipal Corporation (BMC) (AFP)

“We have supplied medicines worth at least ₹50 crore over the past six months, but have not been paid for it, which has cut off our income stream completely and forced us to take this step,” said Abhay Pandey, president, AFDLHF.

Other dues include ₹25 crore deposited as earnest money with the central purchase department (CPD) while submitting bids, which is supposed to be returned when bids are not selected; 10% security deposit charged by BMC’s vigilance department as insurance; and payments under the Mahatma Jyotiba Phule Jan Arogya Yojana (MJPJAY) scheme.

“Unpaid dues at BMC-run hospitals have been accumulating for the past four years,” said Pandey.

To make matters worse, the central purchase department has not finalised a single tender over the past three years, forcing hospitals to rely on procuring small quantities at higher costs from local suppliers, said Pandey.

“The department also pays for medicines at old rates, which in some cases are cheaper and in others, much higher than current prices,” he said, describing the situation as a “procurement policy collapse”. The cessation of supplies could impact BMC’s zero prescription policy, he said.

Sanjay Kurhade, deputy municipal commissioner in charge of public health, said that while the dues are lesser than ₹120 crore, a meeting had been held with various departments responsible to payments to drug suppliers to resolve the issue.

“Payments to medicine suppliers are ongoing, but for the unpaid dues, additional municipal commissioner Vipin Sharma held a meeting with the deans of hospitals who certify medicine bills, the accounts department which verifies the bills and releases payments, and the vigilance department. They were all instructed to expedite the processes, so that suppliers are paid soon,” said Kurhade.

In a written assurance to the AFDLHF on Monday, the BMC promised to clear half the dues within a week and the entire amount by February 15. According to the letter, pending dues based on preliminary findings include medicine bills worth ₹20 crore pending with major hospitals, dues worth ₹5 crore pending with vigilance compliance, and payments worth ₹35 crore pending under MJPJAY.

The medicine suppliers’ body confirmed receipt of the letter but said a decision was expected on Tuesday. “We will hold a meeting with our members on Tuesday and then decide if we will resume supplies,” said Pandey.

Authorities at civic hospitals were not able to account for the pending dues, but were not very perturbed about the development.

“The issue was resolved in the morning and payments will be released in the next two-three days,” said Dr Mohan Joshi, dean of Sion hospital, blaming technical problems for delay in payments.

Dr Sudhir Medhekar, dean of Cooper Hospital, said the hospital had enough supplies for the time being. “The foundation has not stopped supplies yet and the issue is likely to be resolved within a few days,” he assured.