In connection with the beginning of tenders’ announcements for the centralized procurement of medical equipment, as well as the emergence of certain questions from the public, the Single Distributor addresses the following clarifications and comments.
In accordance with the instructions of the President, a vector was set for the transition to the centralized procurement of medical equipment based on SK-Pharmacy LLP.
The Head of the State also previously instructed to attract investors, ensure the transfer of technologies and the latest developments, expand the volume and range of off-take contracts with domestic manufacturers, and also increase the share of domestically produced medicines and medical products from the existing 17 to 50% already in 2025.
In order to implement this order, changes were made to the regulatory legal framework governing the procurement of medicines and medical devices:
The main message of the changes introduced has a pronounced anti-corruption focus, as it formalizes the basic principles of procurement, namely the provision of equal opportunities for potential suppliers to participate in the procurement procedure, as well as fair competition among potential suppliers, publicity and transparency of the procurement process.
These effects will be achieved through the introduction into the practice of conducting an expert analysis of a technical specification planned for the procurement of medical equipment for at least two models of different manufacturers, issued by a state expert organization, as well as digitalization of the procurement process and conducting them on the basis of the information system of the Electronic Finance Center JSC of the Ministry of Finance of the Republic of Kazakhstan (MFRK).
In addition, the Procurement Rules provide for a rule according to which a lot is recognized as invalid if the technical specification of the customer corresponds to only one model of one manufacturer from those offered by potential suppliers for the lot, with the exception of the procurement of medical equipment that has no registered analogues in the Republic of Kazakhstan.
In addition, changes to the regulatory framework provide for the obligations of suppliers of medical equipment to train, upon delivery, not only medical personnel, as it was before, but also the technical personnel of a medical organization on the basic level of service for the equipment supplied, with the issuance of a supporting document.
Prior to the introduction of these changes to the regulatory framework, there was a widespread practice when the technical specification of procured medical equipment, in terms of the totality of the contained parameters, corresponded to only one model of one manufacturer, despite not even indicating the commercial names, manufacturers of medical equipment, or ranges of characteristics of medical equipment.
Also, in practice, the terms of reference for tenders were developed and provided to customers by suppliers of medical equipment and, of course, were skillfully "sharpened" for their products.
In addition, in practice, the terms of reference for tenders were developed and supplied to consumers by suppliers of medical equipment and, naturally, were qualified “sharpened” for their production.
It is also worth noting that, according to the results of the External Analysis of Corruption Risks in the Healthcare System, conducted by the Anti-Corruption Agency of the Republic of Kazakhstan from February 3 to March 5, 2021, it was revealed that over the past three years, local executive bodies have procured 48.6 million units of medical equipment in the amount of more than 162.5 billion tenge. Most of the contracts concluded are in paper form (72% or 4995 out of 6093). Of the rest concluded on the web portal, about 65% of the contracts (1237 out of 1908) were signed in 2020, mainly from one source in a special order (88%, 1085 out of 1237).
Thus, for three years only 13.5% (823 out of 6093) were carried out in an electronic format in a competitive way.
A number of facts were revealed that indicate manifestations of corruption: unreasonable rejection of potential suppliers (confirmed by a court decision), sending price offers for specific equipment before an official request, and procuring equipment at "fabulously" inflated prices.
In the actions of officials responsible for public procurement in the field of healthcare, there were formally revealed signs of a violation of paragraph 5 of part 1 of Art. 50 of the Law "On Public Service" (provision to anyone of any assistance not provided for by the legislation of the Republic of Kazakhstan in the implementation of entrepreneurial and other income-related activities).
The situation of artificially inflating the cost of medical equipment, both imported and manufactured in Kazakhstan, or acquiring equipment that does not meet the technical specifications or is prohibited in the country, was the result of the lack of proper pricing regulation and control due to the closed nature of the procurement procedures.
Only within the framework of an external analysis for individual selective positions, the amount of inefficient use of budgetary funds, and in some cases theft of about 1.4 billion tenge, was established (data obtained from the Analytical Report based on the results of an external analysis of corruption risks in the period from 02/03/2021 to 03/05/2021, conducted by the Anti-Corruption Agency of the Republic of Kazakhstan).
Regarding the process of procurement of medical equipment, it should be clarified that the function of the Single Distributor, as a procurement operator, is, in addition to the actual conduct of the procurement procedure, to consider customer applications for the completeness of the submitted package of documents and the compliance of the expert opinion issued to customers by the state expert organization with the one declared for procurement of characteristics of medical equipment. If a complete package of documents is submitted and the technical specification of the customer corresponds to the expert opinion, then the Single Distributor conducts a tender procedure.
As for the inclusion of medical equipment in the Register of measuring instruments, verification and calibration, so, according to Article 11 of the Law of the Republic of Kazakhstan "On ensuring the uniformity of measurements", the establishment of belonging of technical means to measuring instruments is carried out by individuals and legal entities who are their manufacturers, suppliers or users, in accordance with the legislation of the Republic of Kazakhstan on ensuring the uniformity of measurements.
Sub-legislative acts regulating this area have also been approved:
- “On approval of the list of measurements related to state regulation” (Joint order of the Ministry of Health of the Republic of Kazakhstan No. KR DSM-18 and Ministry of Industry and Infrastructure Development (MIID) of the RK No. 195);
-“On approval of the list of medical equipment that is a means of measurement” (Order of the Ministry of Health of the Republic of Kazakhstan No. KR DSM-260/2020).
In addition, subparagraph 12 of paragraph 11 of the Rules for organizing and conducting procurement No. 375 defines the requirement to enter medical equipment related to measuring instruments into the register of the state system for the uniformity of measurements in accordance with the legislation of the Republic of Kazakhstan on the uniformity of measurements. The absence of the need to include medical equipment in the register of the state system of uniformity of measurements is confirmed in accordance with the legislation of the Republic of Kazakhstan on ensuring the uniformity of measurements.
Currently, work is being carried out in parallel on stage II of the centralization of the medical equipment procurement with the aim of comprehensively equipping medical organizations in priority areas, developing mechanisms for concluding long-term contracts on the terms of localization / contract manufacturing, direct contracts, contracts for the life cycle of medical equipment, for which work is being carried out on the following directions:
• Development and approval of the Republican Equipment Program.
• Elaboration of sources of financing for the equipment program.
• Creation of the Technical Council under the Ministry of Health of the Republic of Kazakhstan, as well as the development of standard technical specifications for medical equipment in accordance with the level of equipment.
• Conducting pre-qualification among potential investors (vendors, DGP) to select the best brands / typical technical characteristics, including during direct negotiations to equip about two thousand medical organizations of the republic and the development of new mechanisms for the procurement of medical equipment on the terms of localization of production, the conclusion of direct contracts with manufacturers of medical equipment, using the mechanisms of contracts for the life cycle of medical equipment.
• Elaboration of mechanisms for improving the service support of the supplied medical equipment, preparing premises for the installation of medical equipment, continuous training of medical and technical personnel.
• Improving information systems for managing the medical equipment fleet of the republic.
• The opening of additional specialized faculties for the training of biomedical engineering personnel on the basis of universities and colleges of the republic, which will lead to the improvement of the process of training engineering personnel of medical organizations through the creation of specialized training centers, including with the participation of foreign manufacturers of medical equipment.
The centralization of procurement and the consolidation of the volume of demand from all regions allows for budget savings, the unification of technical specifications for procurement, which ensures real competition between players in the procurement and negotiations to reduce prices with the winners. Ensure transparency in planning the medical equipment procurement, increase the level of equipment with the necessary medical equipment.
In conclusion, it should be noted that all comments and emerging shortcomings and inconsistencies in the practice of recent years were taken into account, and practice, as we can know, is the best experience for making improvements. Extensive measures were taken to improve and develop business processes and the procurement system, aimed at transparency, anti-corruption, increasing the level of procurement functioning, which will ultimately have a positive effect on the quality, competitiveness of suppliers and attracting new players, improving the competitive environment.
The issues of centralization of the medical equipment procurement were discussed with the medical and expert communities, regions, an analytical material was released - https://sk-pharmacy.kz/rus/press-centr/smi_o_nas/czentralizacziya-zakupa-medtexniki
To create favorable conditions for equipping medical institutions with modern diagnostic and treatment-and-prophylactic equipment, the world practice for the procurement of medical equipment, including centralized ones, has been analyzed. Thus, the experience of advanced countries, in particular the United States, Malaysia, the United Arab Emirates, Korea, Australia, the countries of the European Union, and Japan, has been studied.
The Single Distributor is open to suggestions and is always ready to work together with the participation of all involved and interested parties.
If you have any questions and suggestions, please contact us:
Department of Medical Equipment Provision – + 77172 559247/959093,
E-mail: n.palinka@sk-pharmacy.kz , m.zeitun@sk-pharmacy.kz
Press service: +77172 906183, e-mail: pr@sk-pharmacy.kz
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