Delhi Health Department Rejects Allegations of Overpricing in Medical Procurement

New Delhi: In a report submitted to the Delhi government's Directorate of Vigilance, the State Health Department rejected allegations of overpricing in the procurement of medicines, medical equipment and hospital supplies by the Central Procurement Agency ( CPA ), stating that official records show several purchases were made at rates comparable to, or lower than, those paid by other government institutions across the country. The report, which relies on procurement data from the Centre's Government e-Marketplace (GeM) portal, states that several key items, including World Health Organization (WHO)-formula oral rehydration salts (ORS), handheld ultra-portable digital X-ray machines and hospital-grade bedsheets, were procured at prevailing government rates. It, however, noted that price comparisons alone cannot determine the legality or efficiency of the procurement process, adding that investigations into tender specifications, vendor selection, quality standards, inventory planning and procedural compliance are still underway, reports The Daily. Also Read:Delhi Medical Procurement Scam: Former CPA Head moves bail plea The findings come amid parallel investigations by the Anti-Corruption Branch (ACB), the Directorate of Vigilance and the Enforcement Directorate (ED) into alleged irregularities in procurement carried out by the CPA, which functions under the Directorate General of Health Services (DGHS). Earlier, the ACB arrested former DGHS Director and CPA chief, former CPA head and former Deputy Controller of Accounts in connection with the case. Investigators are probing allegations related to pricing, tender conditions, vendor selection and inventory management. Medical Dialogues had previously reported that the former Head of Office of the Central Procurement Agency (CPA) under the Directorate General of Health Services (DGHS) has moved a Delhi court seeking bail in the alleged Rs 700 crore medical procurement scam, arguing that his liberty cannot be denied solely because another accused in the case is absconding. He also maintained that he followed the prescribed administrative procedures while processing procurement files. Delhi Health Minister Pankaj Kumar Singh has also sought clarification from Union Health Secretary Rupesh Thakur regarding the basis on which allegations of inflated procurement costs for medicines, surgical items and medical equipment were accepted and referred for investigation. According to an official familiar with the report, the Health Department submitted GeM procurement records to the Directorate of Vigilance to demonstrate that procurement prices should be compared with similar institutional purchases rather than retail market rates. The official added that investigations into all other aspects of the procurement process are continuing independently. Addressing allegations that WHO-formula ORS sachets were purchased at inflated prices, the report stated that several government institutions—including Northern Coalfields Ltd, Employees' State Insurance Scheme (Odisha), SAIL Bhilai Steel Plant, IISCO Steel Plant, PGIMER Chandigarh, Western Railway Jaipur, Banaras Hindu University and Lok Nayak Hospital—procured similar ORS sachets at Rs 8.74 per unit. In comparison, CPA procured 1.5 million ORS sachets at an effective price of Rs 8.69 per sachet before GST after a 60.5% discount on the printed MRP of Rs 23.11. The report said the Delhi procurement was approximately Rs 0.05 cheaper than comparable government purchases. “The claims of prices as low as Rs 2- Rs 2.50 per sachet also appear to be based on comparisons that do not establish equivalence in terms of formulation, pack size, quality standards, or institutional procurement requirements… Such figures do not align with the available documentary evidence,” the report mentions. The report also dismissed allegations that handheld ultra-portable digital X-ray machines worth around Rs 10 lakh were purchased for approximately Rs 33 lakh. GeM records showed that the same ProRad Atlas model had been procured by government agencies, including the Chief Medical and Health Officer in Korba, Chhattisgarh, and the National Health Mission in Chandigarh, at prices ranging from Rs 32.98 lakh to Rs 33.60 lakh. As per the report, the CPA purchased the equipment at Rs 32.98 lakh per unit, matching the lowest comparable government procurement price. Regarding hospital bedsheets, the report dismissed allegations that products worth around Rs 120 in the retail market had been purchased for more than Rs 400. It explained that government hospitals require specialised linen conforming to prescribed standards for fabric quality, GSM, weave, dimensions and durability for repeated institutional use. After reviewing nearly 90 GeM contracts executed between early 2025 and mid-2026, the report found that institutional procurement prices generally ranged between Rs 400 and Rs 500 per bedsheet. It cited procurements by AIIMS Rishikesh, Dr Baba Saheb Ambedkar Hospital, Safdarjung Hospital, the Chief Medical Officer in Barabanki and AIIMS Kalyani, where similar hospital-grade bedsheets were purchased at prices ranging from Rs 400 to Rs 798 per unit. According to the report, the CPA's procurement price of around Rs 400 per bedsheet was among the most economical. The investigation follows an FIR filed alleging a large-scale conspiracy in procurement by the Delhi government’s CPA and DGHS, claiming officials colluded with private suppliers to manipulate tenders for medicines, medical equipment and hospital supplies. It alleged that restrictive technical specifications were drafted to favour companies linked to officials, fake firms were created to secure contracts, genuine bidders were disqualified, and procurements were made at highly inflated rates, causing wrongful losses to the government and corresponding gains to private entities. The complaint also alleged irregularities in purchases of ORS, portable X-ray machines, bedsheets, C-arm equipment, anaesthesia workstations and surgical consumables, reports Hindustan Times . Also Read:Delhi Medical Procurement Scam: ACB alleges firms linked to servant, small plot owner secured contracts