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Report clears Labour party of fault in purchase of vaccines
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     The Department of Health has been criticised for delays in upgrading the way it procures vaccines, which have cost the NHS an estimated ?5m ($44m, €37m) in the past three years.

    But it has been cleared of any wrongdoing in awarding a ?2.5m contract to a pharmaceutical company at a time when the chief executive made a ?00 000 donation to the Labour party.

    The department had been aware of deficiencies in its procurement procedures since they were first highlighted in an internal audit conducted in 1997, says a report from the House of Commons Committee of Public Accounts. But it took three further internal reviews over the next three years, and two external reviews carried out in 2001 and 2002, for any action to be taken to tackle them, says the report.

    According to the 2001 review, the adoption of new work practices in the department's vaccines procurement agency could lead to potential savings of ?m a year. But it is only in the past year that these savings have been made, with the loss of ?0m potential savings.

    Further cost cuts of ?m a year, which the department itself claimed it could make by improving its business practices, have so far failed to materialise, costing the NHS a further ?5m between 2000 and 2003.

    Other delays have also hindered the modernisation of the department's vaccines procurement arm, says the report, particularly the five months it took to appoint a commercial director for procurement after a recommendation to do so in March 2003.

    However, the report has found "no evidence of impropriety" in the way the department chose PowderJect Pharmaceuticals to produce 20 million doses of smallpox vaccine in April 2002. At the time there were concerns among politicians and the media that the award of the contract was linked to a donation to the Labour party by PowderJect's chief executive.

    But the public accounts report says the department had no means of identifying donations made by companies bidding for the contract, and had it known about the donation it might have involved MPs less in the decision about which company to choose.

    In the future the department needs to be more transparent about the way it issues tenders and the instructions it gives to potential bidders, says the report. The recommendation follows complaints from vaccine suppliers about the way the department handled the procurement process for this first tranche of smallpox vaccine.

    The National Audit Office received a battery of complaints from vaccine suppliers, who claimed that unclear instructions about which strain of smallpox they wanted in the vaccine, the timescale for production of the vaccine, and the need for a product licence disadvantaged their bids.

    Vaccine suppliers are dwindling because of the spiralling production costs and receding revenues, says the report, and the department needs to do more to encourage them to stay in the market to ensure long term vaccine supplies.

    The report also highlights the urgent need for the department to control tuberculosis, whose incidence has increased from 5500 cases a year five years ago to almost 7000 cases in 2002.

    Procurement of Vaccines by the Department of Health can be obtained from the Stationery Office or accessed at www.parliament.uk/parliamentary_committees/committee_of_public_accounts.cfm(London Zosia Kmietowicz)