Hospitals and other medical institutions across Armenia have systematically inflated the cost of their government-subsidized drugs in fraudulent practices that cost the state budget 1.5 billion drams ($3.7 million) last year alone, state regulators said on Friday.
The State Commission for the Protection of Economic Competition (SCPEC) suggested that the government also lost similar amounts of public funds in previous years for the same reason.
The SCPEC alleged fraud after investigating financial operations of 134 hospitals and policlinics that receive government funding to provide free medication to socially vulnerable patients. Armenian laws and government regulations obligate them to hold transparent tenders to purchase those medicines from private suppliers at lowest available prices.
The regulatory body claimed that 60 of those institutions have held no such tenders at all while dozens of others have only created a semblance of fair bidding for the drug procurements. “Because of that, drugs and other medical supplies were acquired from arbitrarily chosen suppliers and at quite high prices,” said Manuk Mikaelian, an SCPEC official who led the inquiry.
“We can conclude that this was not isolated cases of abuses but a whole chain of systematic violations,” Mikaelian charged at an SCPEC meeting in Yerevan. He said the findings of the inquiry will be submitted to law-enforcement bodies for further investigation.
President Serzh Sarkisian’s Oversight Service has made similar allegations. Sarkisian cited them on Saturday when he met with senior government and law-enforcement officials to decry what he called a “disgraceful” state of public healthcare in Armenia. He said “officials responsible for this sector” must be held accountable.