DoE Exempts 120 Drugs From GFR Rules To Facilitate Purchase Of These Products Through GTE

New Delhi: The Department of Expenditure (DoE) under the Union Ministry of Finance has issued an order enabling government procurement of 120 drugs through Global Tender Enquiry (GTE) by exempting these drugs from the relevant rule in the General Financial Rules (GFRs), 2017 till March 31, 2027.

The order has been issued following a request from the ministry of health and family welfare (MoHFW) to exempt procurement of these drugs from the GFR instructions. According to Rule 161 (iv) of GFRs, 2017, no Global Tender Enquiry (GTE) shall be invited for tenders upto Rs. 200 crore.

However, in exceptional cases, where the Ministry or the Department feels that there are special reasons for issuance of GTE, it may record its detailed justification and seek prior approval for relaxation to the Rule from the competent authority, which is the Secretary (Coordination), Cabinet Secretariat.

The drugs which are exempted from the rules to allow GTE include Trulicity branded pre-filled pen for diabetes from Eli Lilly, Risdiplam, sold under the brand name Evrysdi by Roche, severe eosinophilic asthma drug Fasenra from AstraZeneca, shingles vaccine Shingrix from Glaxo SmithKline Pharmaceuticals, rheumatoid arthritis drug Simponi from Johnson & Johnson, Ryzodeg penfill branded by Novo Nordisk, among others.

“In view of request of MoH&FW, a general exemption has been granted herewith under Rule 161 (iv) of GFRs, 2017, from the instructions issued by this department vide OMs No.F.12/17/2019-PPD dated May 15, 2020 and May 28, 2020, for issuance of GTE for procurement of 120 drugs listed at Annexure-A till March 31, 2027 or further orders,” said the DoE order.

It may be noted that the MoHFW has been seeking exemptions from the GFRs rules for certain drugs and medical devices from time to time in order to facilitate purchase of these products through GTE, after checking availability of these formulations in the local market.

The MoHFW and Department of Pharmaceuticals has also been taking efforts to identify the local manufacturers for several products, so that the Central government’s procurement agencies such as Ministry of Railways and Employee’s State Insurance Corporation (ESIC) can include the local manufacturer’s details for purchase of these drugs and medical devices as per the stipulations of GFRs. The list of these drugs and medical devices are also collected from the Central Procuring Agencies, for this purpose.

The DoE, in April, 2023, issued an office memorandum exempting 364 medical devices and 70 drugs from the mandate for purchase from local manufacturers, and later, in December, 2023, added 15 more drugs into this list. These drugs and medical devices were exempted from the relevant GFRs Rule till March 31, 2014.

It may be noted that the DoP has issued a guideline on December 30, 2020, for implementing the provisions of Public Procurement (Preference to Make in India) Order (PPO), 2017, to encourage Make in India and promote manufacturing and production of goods and services related to pharmaceutical sector in India with a view to enhance income and employment.

Under the guideline, the public procurement agencies should purchase minimum local content for pharmaceutical formulations from Class I local suppliers – suppliers with local content equal or more than 80 per cent – and Class II local suppliers – with local content of more than 50 per cent but less than 80 per cent. Another categorisation as per the guideline is the non-local suppliers, who have local content less than or equal to 50 per cent.

However, considering that some of the goods of the required quality, specifications etc., may not be available in the country and it is necessary to also look for suitable competitive offers from abroad, the DoE amended the General Financial Rules, 2017 empowering the concerned ministry or department to seek tender globally through GTEs.

While the amendment said that no GTE shall be invited for tenders up to Rs. 200 crore or such limit as may be prescribed by the DoE from time to time, in exceptional cases where the Ministry or Department feels that there are special reasons for GTE, it may record its detailed justification and seek prior approval for relaxation to the rule from the competent authority, for tenders below such limits.

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