Healthy Skepticism Library item: 20440

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Publication type: news

Kumar C
Govt pact with generic drug seller ‘illegal’
The Deccan Herald 2012 Nov 28
http://www.deccanherald.com/content/295090/govt-pact-generic-drug-seller.html

Full text:

Documents reveal the MoU was signed more than 2 months before the company got licence
The Karnataka government’s agreement with a private firm (Esscubes Medisience Private Limited) to sell and market generic drugs has drawn flak within the ruling BJP and it is alleged that the company was favoured in violation of rules.

Incidentally, the name and address of one of the directors of the company matches with the name and address of a trustee in ‘AASARE Foundation’, a trust with which S A Ramdas, the Minister for Medical Education, has connections.

Although there is no evidence to directly prove that Ramdas used his influence in selecting the company, doubts have cropped up as documents show Shankarananda (No 76, II Cross, Lake Shore Gardens, Thindlu, Vidyaranyapura Post, Bangalore 97) has connections with both the Trust and Esscubes.

The Karnataka State Co-operative Consumers Federation Limited (KSCCF), a wing of the State government, entered into an agreement with Esscubes for sale and marketing of Generic Drugs on March 10 this year.

The Memorandum of Understanding between the two parties was aimed at executing the government’s novel initiative of providing generic drugs, which are a lot more affordable than drugs available in the market to the lower and middle-income groups.

However, documents with Deccan Herald show that the said company was chosen to market and sell the drugs in just a month and eight days after the Registrar of Companies, Karnataka gave the Certificate of Incorporation.

The Certificate of Incorporation for Esscubes with corporate identity number ‘U36912KA201PTC062395’ was given on February 2, 2012 and the MoU between the company and the KSFCC was signed on March 10.

Further, documents from the office of the assistant drugs controller reveal that the company was accorded the licence to carry out such business on May 2, 2012, suggesting that it was allowed to market and sell drugs even before it had the licence to do so.

Well-placed sources in the government said that the methods followed in selection of the company and the execution of the agreement were not as per the prescribed laws and suspected that there could be a role of influential persons in striking such a deal.

Sarvabhouma Bagali, a BJP MLA told Deccan Herald: “There is enough proof to show that the company was selected in an unfair manner and I will raise this issue in the Assembly.”
Repeated attempts to contact Ramdas were futile.

The company, violating the rules of the Memorandum of Understanding with KSCCF, had entered into a sub-lease agreement with KIMS, Hubli.
This was cancelled on
May 3.