Omnibus monopoly: Duque allows bio-medical supplier to corner all COVID-19 testing equipment in PH, jack up prices
A bio-medical distributor owned by a husband and wife tandem is allegedly monopolizing the importation and distribution of the reverse transcription polymerase chain reaction (RT-PCR) machines used for COVID-19 testing with the backing of Health Secretary Francisco Duque III.
Multiple sources told Politiko that Duque centralized all purchases of COVID-19 testing machines by both the government and private sector through Omnibus Bio-Medical Systems Inc. owned by Van William Co and his wife, Emily.
Sources said a powerful politiko also played a role in the couple’s bid to control the sale of COVID-19 testing machines and kits even as they claim to have exclusive distributorship agreements with biotechnology firms abroad.
With Duque’s backing, Omnibus has reportedly been padding its quotation for COVID-19 testing equipment by two to three times the recommended price of foreign biotechnology companies.
The government and private donors are left with little options in the purchase of RT-PCR machines as no less than Duque and his cohorts at the Department of Health (DOH) have recommended the brands sold by Omnibus.
One of Omnibus’ brand partners is China’s Sansure Biotech Inc., which refused to sell its RT-PCR testing machines exclusively through the Co’s company due to price gouging.
Sansure sold its RT-PCR machines directly to Project ARK, a COVID 19 testing initiative led by the private sector, for P1.5 million each.
At the Senate’s May 19 hearing on the government’s COVID-19 response, Senator Panfilo Lacson mentioned Sansure’s quoted price as basis to question Duque on why DOH paid P4 million for the same machines.
“Sinasabi ni Secretary Duque, ang Sansure na bili ng private sector, closed system daw, ‘di magiging compatible sa naroon sa DOH. Eh teka muna, may Sansure din ang DOH, kasi may exclusive distributor ang Omnibus. So nag-procure din ang DOH ng Sansure. Bakit nila pipilitin ang bibilhin nilang component ay para sa King Fisher, e samantalang may Sansure din sila? Kaya medyo mahiwaga nga, kailangan dapat tingnan,” Lacson said.
Undersecretary Lloyd Christopher Lao, officer in charge of the Department of Budget and Management’s Procurement Service (DBM-PS), told Lacson that it was the DOH and its attached agency, the Research Institute for Tropical Medicine (RITM), which specifically requested the purchase of Thermo Science King Fisher testing machines from the United States.
Politiko’s sources said the Cos used their influence to blacklist Sansure from the government’s list of authorized suppliers because it was threatening to dismantle their monopoly of supplying COVID-19 testing equipment.
Sources said Omnibus’ cartel tried to make sure that Sansure would be exclusively sold by the company, a move that initially caused delays in Project ARK’s purchase of testing equipment which was resolved only after President Rodrigo Duterte intervened.
In a privilege speech at the House of Representatives, former Health Secretary and now Iloilo Rep. Janet Garin said a “very enterprising” couple cornered the importation and sale of COVID-19 testing machines.
Garin, who’s working with Project ARK, blamed the couple for slowing down the efforts of both the government and private sector to ramp up COVID-19 testing as early as March.
“Ang pagkakasabi sa mga donor at sa mga negosyante ng kompanyang ito [ay] ang dami raw ipinadala sa mag-asawang ito. Kaya naman pala na yung mga donors ay paulit-ulit na nakikipag-ugnayan sa iba’t ibang mga kompanya, palaging may humaharang at ang palaging reason [ay] exclusive distributor po kami,” she said.
Without any reference to the Cos, Garin added: “Bansagan po natin ang mga halang ang kaluluwa na ito bilang ‘V.E’ gawang very enterprising ang mag-asawang ito. Pati buhay ng ating mga kababayan ginawang negosyo. Matapang pang nilapitan ng mag-asawang V.E. ang mga maaaring tumulong para mapasakamay nila ang exclusive distributorship.”
The former Health Secretary once again mentioned the “very enterprising couple” in an online forum of the Foreign Correspondents Association of the Philippines Monday (May 25).
She said the couple’s company raised legal issues and mentioned its exclusive distribution agreement when Project ARK went directly to the manufacturer for the purchase of RT-PCR machines.
“It (the local distributor) is the same company recommended by some of the people who are working with DOH. In recommending, supplier to donors, donors are now trapped to order equipment from him (the supplier),” Garin said.
She said the company had been called out by the foreign supplier for hoarding and overpricing the testing machines.
“Some orders were not coming. I realized when we talked to the chair of company (which makes the testing machines), that this supplier has long been warned because they were bringing in machines into the country and were allegedly hoarding them. They (maker) can’t seem to find any correlation between the number of tests being conducted and the number of machines sent to the Philippines,” Garin said.
“Eh meron na silang warning one and half months ago. They were warned not to hoard equipments. They were warned to use the equipments for testing. They were warned not to overprice. They were warned not to deprive our country of the much needed PCR or swab testing para po sa ating COVID,” she added.
Garin said the overpriced testing machines was the reason why PhilHealth’s package for COVID-19 testing was priced by as much as P8,150 when a test could be done for only P1,700.
“When you fight for exclusivity of test kits and you plan to give it to a specific or few number of hospitals or private firms at a price comparable to PhilHealth, you’re making it inacessible for government and private donors. You can’t sell them at three times what the company (maker) is actually giving it to you (distributor),” she said.
Despite efforts of the Omnibus cartel, the DBM proceeded with buying equipment directly from Sansure. Remember the 100,000 PCR testing kits donated on March 28 by China to the Philippines, which was discarded by DOH because they were allegedly only 40 percent accurate?
The testing kits were made by Sansure and the Chinese embassy in Manila had to issue a statement saying their quality was at par with the testing kits provided by the World Health Organization.
Aside from buying overpriced COVID-19 testing equipment, DOH spent $32 for each swabbing system that Project ARK bought from Sansure for only $18 each.
Hinting at more anomalies under Duque’s watch, a source said some European countries were willing to supply the Philippines with 300 ventilators at a low price.
However, the sources said the DBM was told by Duque that the brand and supplier of the ventilators should be specified by DOH. This, he explained, was the reason why DBM could not proceed with the purchase of cheaper ventilators.