“The prepayment made on July 26, 2023 was for a broader pharmaceutical order and not limited to Parol,” a statement from AHS reads
Photo by Shaughn Butts /Postmedia
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In a recent development in Alberta’s healthcare procurement process, Alberta Health Services (AHS) agreed to a substantial $28 million prepayment for a pharmaceutical order that included Parol, a brand of acetaminophen, even as hospitals were instructed to stop using the medication.
This prepayment was issued on July 26, 2023, nearly two weeks after AHS mandated on July 10, 2023, that all hospitals cease using Parol due to the resolution of the Canadian acetaminophen shortage.
Controversy Over Prepayment and Procurement
The move has sparked controversy, with critics arguing that the prepayment was unnecessary after the shortage had been resolved. AHS, however, maintains that the payment was part of a broader pharmaceutical contract involving other medications.
“The prepayment made on July 26, 2023 was for a broader pharmaceutical order and not limited to Parol,” a statement from AHS clarifies.
The statement further explains that this payment was meant to secure favorable pricing, support production adjustments, ensure uninterrupted availability, and enable manufacturer investments to meet Health Canada requirements. According to AHS, the payment brought the full prepayment amount to $49 million, with $21 million in product received, of which $14 million was Parol.
Health Canada’s Role in Drug Approval
Applications for drug approvals are tracked in a publicly available Health Canada database. Despite expectations, there is no current entry for either Atabay, the Turkish company supplying the medications, or MHCare in this database. This absence raises questions about the regulatory status of the imported drugs.
Photo by Greg Southam /Postmedia
The importation of medication from Atabay was initially approved by Health Canada, with an approval for 750,000 bottles of Parol for pharmacies in Alberta. This decision made the medication available behind the counter due to its differing dosage compared to Canadian acetaminophen, making it a less palatable option for health-care professionals.
This move came amidst ongoing debates about the necessity and appropriateness of importing medication during a shortage that had since resolved. After the shortages ended in mid-2023, Health Canada declined further shipments, limiting the volume of imported medications to 1.5 million bottles from the originally approved five million.
Challenges in Selling Excess Inventory
AHS had planned to recover some of the prepayment by selling the excess medication to other provinces. However, this plan was abandoned by the fall of 2023 due to a lack of interest.
This development underscores the challenges faced by AHS in managing inventory during periods of fluctuating demand and drug availability. It also highlights the potential financial risks associated with high-volume prepayments in the healthcare sector.
Investigation into Procurement Practices
The procurement of the Parol medication has become a focal point in recent allegations of improper procedures in health-care purchases. The Alberta Auditor General (AAG) is currently investigating procurement practices at Alberta Health and AHS, following reports of political interference.
This investigation has prompted calls for the resignation of Health Minister Adriana LaGrange, with opposition critic Sarah Hoffman arguing that such procurements are indicative of broader issues within the sector.
“The alleged bloated contracts to the UCP’s friends are at the heart of the worst corruption in Alberta history,” Hoffman stated, underscoring the public’s concern and the need for transparency in procurement processes.
Conclusion and Recommendations
The recent prepayment and associated issues highlight the complexities and challenges in healthcare procurement. It is crucial for agencies like AHS to ensure transparency, accountability, and alignment between procurement decisions and clinical needs.
As the investigation by Alberta’s Auditor General continues, stakeholders and the public will closely monitor the findings. The health-care sector must strive to maintain integrity in all procurement processes to ensure patient safety and the efficient use of public funds.
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