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HomeMedico-LegalGEMS accused of issuing R600m multivitamins contract irregularly

GEMS accused of issuing R600m multivitamins contract irregularly

The Government Employees Medical Scheme (GEMS) irregularly issued a R600m multivitamins contract, in violation of the Public Finance Management Act and other regulations, to a company called  Activo Health in December last year through the quotation system. This was despite the PFMA requiring state contracts above R500,000 to be advertised and subjected to competitive bidding.

Pretoria News reports that GEMS appointed pharmaceutical company Activo Health on Christmas eve to supply multivitamins A-Z to its 1m members for a period of five months, starting from January 2022. At the current retail price of R130, the contract is valued at R600m. The newspaper notes its sources said the decision to appoint Activo Health was done abruptly, and the approvals fast-tracked in breach of normal procurement and regulatory processes.

“They have pursued this initiative with complete neglect and disregard for appropriate procurement policies, dispensing, and clinical best practice. This is contrary to Good Pharmacy Practice regulations as determined by the SA Pharmacy Council.”

Another industry source said black pharmaceutical manufacturers were sidelined despite playing a major role in supply of over-the-counter multivitamins, cough mixtures, and COVID-19 PPE.

The contract was signed by GEMS principal officer Dr Stan Moloabi, said the Pretoria News.

Moloabi confirmed that Medscheme sourced quotations and adjudicated the process on behalf of GEMS. However, he said GEMS made the decision to appoint. “The scheme mandated Medscheme to analyse claims trends for the most commonly claimed vitamins and obtain quotations. The scheme then adjudicated the quotations, to identify a preferred vitamin supplier based on procurement criteria outlined to all prospective suppliers.”

He reportedly did not respond to specific questions on whether due processes were followed and whether or not the tender was advertised. He said the Council for Medical Schemes protocols did not apply to GEMS’ strategic purchasing processes. Moloabi maintained that all GEMS processes were conducted in line with its rules and in compliance with the Medical Schemes Act.


Pretoria News PressReader article – Exposed: GEMS’ R600m ‘dodgy’ contact (Open access)


See more from MedicalBrief archives:


Mkhize: 'No plans' to appoint GEMS administrator of NHI


Ten forensic reports show scope of graft at GEMS


GEMS to claw back over R100m ‘defrauded' by private doctors and hospitals



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