The Planning Commission has accorded in-principle approval to set up the much-awaited professional Central Procurement Agency (CPA) with one time grant of Rs. 50 crore for the purpose of procuring, storing and distributing health sector goods for various national programmes under the Union health ministry.



Sources said the approval came from the Planning Commission very recently and the follow-up actions would be taken up to put in place the system which will go a long way to improve the transparency in procuring medicines and other allied products meant for the national programmes.



The CPA will be registered as a society under the Societies Registration Act, 1860. “The existing system of procurement and distribution is transparent. Central Procurement Agency is an initiative taken by the Ministry to further improve the existing system,’’ according to an official in the health ministry.



The CPA is expected to keep services as prime motive. It would seek to put in place transparent and competitive system for procurement so that goods are procured at competitive rates. The agency will set up and manage an efficient supply chain and put in place monitoring system to prevent stock-outs and reduction in wastage due to excess inventory. It will look to improve system of quality control so that the end-user gets quality products. Besides, the agency will have the responsibility to interact with stakeholders on regular basis so as to improve the system further on the basis of their feedback.



At present, the government hospitals are procuring drugs through Government Medical Stores Depot (MSD) according to formulary and through tendering process by the hospitals for the drugs which are not supplied by MSD. The hospitals procure hospital equipments following the procedure laid down in DGS&D Manual, GFR Rules, CVC Guidelines and instructions issued by the health ministry.



The proposal has been in the files for a long time now and the Pharmaceutical Department also has been pushing for the same. The proposed agency, more importantly, is expected to bring in a uniform policy and set a pattern for procurement of medicines as at present different agencies under the health ministry and other Central agencies were having different parameters, putting the small and medium scale units in a spot.