In an exclusive, The Lede finds out the lapses in the tender and how ICMR faces a slew of lawsuits from big pharma
On March 25, the Indian Council of Medical Research (ICMR) issued a tender for 10 lakh rapid test kits (RAT kits), inviting bidders to make offers.
This was the first ever tender by the ICMR for RAT kits and was to close on March 26 at 12.30 pm.
A day later, on the morning of March 27, another tender was uploaded on the site.
This one was for five lakh rapid test kits.
Strangely, this tender closed at 11.30 am the same day.
“There was a window of barely 4-5 hours for firms to place bids,” said an industry insider. “It was all over very soon.”
A bureaucrat, unconnected to the Centre, who perused the tender told The Lede: “Normally tenders are published in newspapers and there is a month’s time for people to bid. This being an emergency of course one cannot give one month period. But giving a few hours? I am not sure this is right,” he said.
Not just this, the March 27 tender was extraordinary in its bareness and contradictory nature. Even providing leeway for the fact that the country faced an emergency situation and that there was a need to cut red tape, this tender was not one for the history books.
As is evident in the document above, the only requirements for submitting and winning a bid were as follows.
(i) Rates to be quoted per kit in Indian Rupees (duties & taxes separately)
(ii) Certificate of approval by US FDA or CE-IVD or NIV, Pune
(iii) Timeline of supply for six locations of delivery
(iv) Commitment of supply in first week and subsequently
A second tender was issued for RAT kits on April 11.
This one has a few more conditions than the first but still lacks enough checks and balances.
The major conditions are as follows.
(i) Certificate of approval by US FDA or CE-IVD or NIV, Pune
(ii) Import Certificate/license from the Drugs Controller General of India (DCGI)
(iii) NMPA (National Medical Product Administration) of China approval
(iv) Bids would be evaluated on rate quoted, timely schedule of supply, desired quantities, capability of the supplier to supply the desired quantity and quality of the offered product
“There is no clarity in this,” said a senior bureaucrat from a south Indian state, upon perusing the tender documents. He did not wish to be named, given the sensitivity of the issue. “It doesn’t prescribe the level of authorisation to be provided, the payment terms or bidding company qualifications,” he pointed out.
Another senior bureaucrat told The Lede: “The first tender talks about how the bidder has to mention how many kits they have and then they want the delivery within a week. Both are contradictory clauses. The second question is logistics. The tender does not take that into account or address it.”
As a result, every company, whether diagnostics-related or not, hollered for a piece of the large RAT kit pie.
No wonder then that a large number of firms have been disqualified subsequently from bidding by the ICMR.
As on date, 88 firms have been disqualified so far.
A number of large pharmaceutical companies are readying to drag the ICMR to court over the rapid antibody testing kits (RAT kits) fiasco.
On March 27 and April 11, as detailed above, the ICMR had issued tenders to procure RAT kits from a clutch of firms from China, South Korea and India. The ICMR had also placed orders for five lakh RAT kits from Guangzhou Wondfo, a Chinese manufacturer through its Indian supplier Matrix Labs on March 28. This was the outcome of the March 27 tender.
The first tranche of RAT kits had arrived from Wondfo/Matrix on April 17 – a total of 2,76,000 kits. From April 24 onwards, Rajasthan, Punjab and West Bengal complained that the RAT kits were “faulty” and “inaccurate”.
On April 27, the ICMR recalled all the RAT kits by two Chinese manufacturers – Wondfo and Livzon – and stated that they showed “wide variation”, were “faulty” and that they would be returned to the manufacturer.
The Lede had earlier reported how a dispute between the importer and the distributor had led to price mark-ups being made public.
In that report, The Lede had also exposed how ICMR bought the same kits for a higher price in a second tender.
Simply put, they stand to lose a lot of money.
How, you ask? Well, it is a bit complicated, but we will break it down for you.
1. ICMR, in its tender for RAT kits on March 27, presumably decided to cut some red tape. ICMR decided to automatically approve testing kits that were already approved by the US FDA (Food and Drug Administration) and CE-IVD (European Council approval for in-vitro devices). Many kits such as Wondfo and Livzon got automatically approved since they had approvals from both the US and European agencies.
2. Before its tender, ICMR had called for samples of RAT kits for testing and approvals by National Institute of Virology, Pune. A number of big pharma firms such as Abbott, Zydus Cadila, Mylan, Trivitron Healthcare, Roche and others had handed in Chinese and South Korean test kit samples for approvals. Since Wondfo had been approved, firms like Abbott, Zydus Cadila, Mylan and Matrix immediately placed orders for unknown numbers of testing kits from Wondfo. In fact, the ICMR/NIV tested Wondfo kits not once but four times as different pharma firms brought in batches of stock.
3. Matrix Labs quoted the least amount in the March 27 tender and got the order to import five lakh test kits from Wondfo, China. The other big pharma companies were likely hoping to supply the same Wondfo kits to state governments. Everyone was gung ho.
4. But come April 27 and the ICMR threw a bombshell. It imposed a ban on the Chinese testing kits, recalled them from the states and said it would return them to the manufacturer. The Chinese government protested and ICMR went into silent mode immediately thereafter.
5. What was worse, since the Wondfo and Livzon kits were banned, the import licences of the big pharma companies were all cancelled. Reason enough to be livid? There’s more.
6. ICMR has maintained a studied silence since the fiasco. The Chinese are demanding an explanation as to why their test kits have been refused, despite their having US FDA, CE-IVD and NIV/ICMR approval. The orders which big pharma firms placed with Wondfo and Livzon are ready for export in the Chinese factories. But ICMR appears to be in no mood to resolve the situation or explain its decision.
7. ICMR has given no further orders for RAT kits from any firm. At a time when the country desperately needs these kits to conduct mass testing, the nodal body that is handling COVID-19 strategy in India has simply gone mute.
With the ICMR then taking its hands off RAT kits, the actual big pharma firms which had sunk money into placing orders with the Chinese firms, are now staring at big losses.
If India’s purpose had been to thumb its nose at China, well, the bad news is that the ruse backfired. It is the Indian companies who have suffered losses. The Chinese have got their payments.
Time is ticking for the ICMR. Big pharma is restive. Litigation is likely to hit hard in a week or so if ICMR continues its silence and inaction.
Industry experts are unable to understand why ICMR has cancelled orders from the biggest firms that specialise in RAT kits.
“Wondfo is the biggest company that can actually mass produce these RAT kits,” said an industry leader who has over a decade of experience in the rapid testing kits sector. He too requested anonymity.
“Wondfo was the biggest supplier to China when they battled the virus. Wondfo and Livzon have supplied to the US, Europe, all over the world. I simply cannot understand why such a decision to ban and recall the kits has been taken by ICMR. They could negotiate and reduce prices or any other issues but now the only two players with the capacity to actually meet our need have been banned. All the other players are quite small,” he said.
The Lede reached out to ICMR and to the pharma companies named in this report for responses. If and when responses are provided, this report will be updated.
India is currently testing 105 people per million population. With a population of 132 crore, the scenario is worrying, say experts, as testing is still too less. With ICMR’s rapid test fiasco, the people of India stand to suffer the most.