Procuring Rs 650 Remdesivir at Rs 1568 during pandemic: FIR against pharma company Mylan for alleged Rs 6 crore fraud

Besides Mylan, officials from the central purchasing department of the Brihanmumbai Municipal Corporation (BMC) and the supplier of the injections are also in soup as they are now facing charges of alleged fraud.

As per various media accounts, the development was confirmed by a senior EOW official.

On July 28, the EOW initiated four preliminary investigations, one of which pertains to alleged financial irregularities in BMC's expenditures during the pandemic. The financial irregularities in the Remdesivir procurement came to light during an Enforcement Directorate (ED) investigation into money laundering related to BMC's expenditures in COVID jumbo centers. The ED identified irregularities worth Rs 4,000 crore and alerted the EOW to these significant discrepancies. Subsequent to a preliminary inquiry, the EOW filed an FIR upon determining that a cognizable offense had occurred.

The case has been formally lodged at the local Agripada police station, naming the Director of Mylan Laboratories and unidentified BMC officials as the accused. They are charged under various sections of the Indian Penal Code, including 406 (criminal breach of trust), 409 (criminal breach of trust by a public servant, or by banker, merchant, or agent), 420 (cheating), 120-B (criminal conspiracy), and 34 (common intention).

The complaint was filed by Nitin Unavane, an officer from the EOW Sales Tax unit.

In 2021, as Covid-19 cases surged in the city, the BMC had issued tenders to procure Remdesivir injections. In the initial tender granted to Mylan, they were tasked with delivering 40,000 vials at a rate of Rs 650 per vial. However, they only managed to supply 31,000 vials.

The situation became more perplexing as the second tender, involving 2 lakh vials, was awarded to the same company just two weeks after the first order. This time, each vial was priced at Rs 1,568. Nonetheless, the BMC received only 65,000 vials in the second order. The EOW is conducting an inquiry into the remaining vials, and the full payment has already been made to the supplier.

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“The supply of the first order was not even completed by the supplier and second tender order, for 2 lakh vials, was given to the same company. This time, price of a vial was Rs 1,568. Duration between the two orders was just two weeks. Moreover, BMC received only 65,000 vials in the second order,” an officer told TOI.

“We will soon summon the BMC officials concerned for questioning,” an EOW officer told The Indian Express

The ED may also file an Enforcement Case Information Report (ECIR) to investigate potential money laundering in the irregularities concerning the purchase of Remdesivir injections at inflated prices. 

Earlier, BJP leader Kirit Somaiya had raised concerns about 10,000 missing Remdesivir injections. He alleged that these injections were purchased by BMC's purchase department in an opaque manner, without proper records detailing which hospitals received them or who they were administered to.

“The civic body purchased the injection in 2020 at Rs 4,300, in 2021 despite a contract of Rs 665 per vial, the injection was purchased at Rs 1,568 per vial from Mylan when other agencies brought it at a lower price or even were selling at low prices. There are also no proper details of whom these injections have been given and thus a fraud has taken place,” Somaiya told HT.