DOH Accused of Buying Near-Expiry Drugs for Kickbacks

MANILA, Philippines — Senator Raffy Tulfo has accused the Department of Health (DOH) of deliberately purchasing near-expiry medicines from favored suppliers to facilitate "kickbacks," leading to billions of pesos worth of drugs expiring in government warehouses. During the Senate deliberations on the DOH's proposed 2027 budget on Friday (September 4), Tulfo confronted newly appointed Health Secretary Edwin Mercado over the alleged scheme. The senator cited that in 2023 alone, at least P11 billion worth of expired drugs were "buried underground." "Someone should be arrested. Someone's head should roll. That amount is scandalous," Tulfo stated, questioning the procurement process and the possibility of favoritism. Mercado, who assumed his post as DOH chief on August 10, confirmed that one of the DOH undersecretaries who recently stepped down handled procurement. Randy Escolango, the former DOH undersecretary for financial and supply chain management services, resigned on August 15 while facing a complaint before the Office of the Ombudsman. DOH employees had filed a complaint in June accusing former Health Secretary Ted Herbosa and Escolango of a "self-policing conflict of interest," alleging Escolango had unchecked authority over drug procurement by serving as Bids and Awards Committee chair while simultaneously managing the department's finance and supply chain functions. Escolango has not publicly addressed the allegations. State auditors have flagged the DOH for billions of pesos in expired or expiring medicines over the years: P18.5 billion from 2015 to 2018, P2.2 billion in 2019, P95.15 million in 2020, P85 million in 2021, P7.4 billion in 2022, and P11.18 billion in 2023. The last figure includes over 7 million vials of expired COVID-19 vaccines and 24,539 bags of donated dialysis solution. In 2024, the Commission on Audit found P34.8 million of drugs already expired, with a further P99.5 million nearing expiration. COA has consistently pointed to gaps in procurement planning, poor distribution, and weak monitoring of its inventory. Responding to questions about guaranteeing that newly procured drugs would not be near their expiration date, Mercado pointed to the 18-month shelf-life rule and the disqualification of non-compliant suppliers as existing safeguards. "We're very strict now with the requirement that the stocks have an 18-month shelf life," Mercado said. However, Tulfo raised the possibility that the department "gets around the 18-month rule by delaying the purchase of medicine it knows it needs until shortages become declared emergencies, which then allows it to bypass competitive bidding." He called this "the modus at the DOH." Mercado told the committee the department was pursuing three changes to avoid its stock of drugs from expiring in warehouses. First, he said the department would channel more of its medicine procurement budget through the Philippine Health Insurance Corp. (PhilHealth), which he said could negotiate bulk, discounted prices directly with suppliers using its own pharmacists. Second, with only 40% of medicine procured centrally by DOH, the remaining 60% are bought through the department's regional Centers for Health Development. Third, the department was overhauling its inventory-tracking IT system. Mercado assured, "But as what Sen. Tulfo said, I will be creating an investigating committee." Tulfo pointed out that a similar body, the department's own Inter-Office Task Force, already existed. However, a member of the task force present during the hearing stated they do not investigate medicine wastage and instead hold weekly meetings on policy, procurement, and supply chain issues. Tulfo suggested a full Senate Blue Ribbon probe might be called soon. In the same hearing, Tulfo lamented how mental health drugs accounted for the bulk of DOH’s 2026 waste, including stock meant for the Mandaluyong Mental Health Center that expired due to staff lacking training to administer it. He also cited tips that expired inventory was fraudulently relabeled and resold outside official channels. Tulfo further questioned why the department had to spend P3 billion to replenish TB medicine stocks after a previous P3.225-billion procurement was suspended in July by former Health Secretary Jose "Brix" Pujalte Jr., who claimed the pause was for inventory verification. Mercado confirmed the stalled purchase has since resumed. The Philippines ranks third globally in tuberculosis burden, according to the World Health Organization. Tulfo urged Mercado to overhaul the DOH's inventory system and stop the massive drug expiration. "Build a system. Hopefully, you can perfect it so no medicines expire," Tulfo said. "If expiration is unavoidable, it shouldn't reach P100 million. P1 million or P2 million is tolerable—but hundreds of millions... Meanwhile, many health centers aren't getting medicines." The DOH has a proposed P353.8 billion for 2027 under the National Expenditure Program, P95 billion or 21% lower than its enacted budget this year of P448 billion. Information Source: Philstar Nation