The Covid pandemic and the obscurity of government expenses

Authors: Alfred Zylyftari, Elsa Dautaj, Seth Facey

There are many things Albanians know  about the pandemic’s impact on their country.

Albania was one of the first nations in Europe –in March, 2020–to impose strict isolation measures by blocking transport, citizens’ movements and closing businesses..

As of July 6th of this this year there have been  283,811 positive cases of covid 19 resulting in more than 3,500 deaths since the pandemic began, according to data from the Ministry of Health.

The large number of cases almost led to the collapse of the hospital system. Many citizens chose to be treated at home and in private hospitals and often used medications not found in state hospital protocols. In some cases they received medicines trafficked from neighboring countries.

Mr. A.H., who requested to remain anonymous, says he was forced to deal with COVID at home because he did not trust the state hospitals.

“ I had a serious bout of Covid and the treatment at home cost me about $7,000.00. I had to find and use smuggled medicines because they were not available in the local pharmacies. The doctor who came to my  home to oversee my treatment cost me about $2,000.00. I could afford it, but what abut the people that could not afford it?!,” A.H. said.

E.K from Tirana, who lost his grandfather, decided to send his grandfather to a private hospital believing that the conditions and service were better.

“I can not say for sure that the hospital did not give him the right help, but unfortunately my grandfather passed away. At the moment when we family members were suffering from the fact that my grandfather passed away, someone came to us from the reception and informed us that we could not withdraw the dead body from the hospital without paying the bill, which was 87,000.00 Euros. In those moments I realized how worthless a man’s life was in that hospital,”EK said.

But there are many things Albanians don’t know and might never know about their government’s response to COVID.

The COVID vaccine dealings and lack of publicly available information

Vaccine supply contracts, signed by the Albanian Government with various pharmaceutical companies, are considered a state secret. Members of Parliament, who voted for these contracts, through special laws, were provided with just minimum information before casting their vote.

Compared to many other countries that have publicly released COVID-related contracts,  Albania continues to keep those contracts confidential, and there is little public information about what the govenment paid for vaccines or any medical supplies needed to combat COVID.

Myslym Murrizi, who was Deputy Chair of Parliament when the government signed a contract with Pfizer to purchase vaccines, told  ACQj that he voted only for the first contract with Phizer  after he was given detailed terms of the contract.

“I found the terms of the contract discriminatory for the Albanian government, but this occurred in emergency conditions as it was the first vaccine company to come to the country, with a price of 12 euros per vaccine,” he said.

The Albanian government purchased vaccines from a number of international companies and in some cases, the amount paid is known.

For example,  Albania spent $20 million or 2 billion ALL for vaccines from “Keymen Ilac Sanayi ticaret anonym sirket (Sinovac)”, based on DCM no. 174 and DCM no. 357, with two payments for the Chinese vaccine made in March and June 2021.

The government paid $4.1 milion or 430 million ALL to “Gavi Alliance’ for vaccines.

Albanians know a lot more about the government’s January 2021 contract with Pfizer because it was leaked. However, official data is unavailable.

The contract was concluded between “Pfizer Export B.V” in the Netherlands and the Ministry of Health and Social Care and the Ministry for Reconstruction as well as the Institute of Public Health. The 52-page leaked draft contract indicates the amount, costs and conditions that the Albanian government must meet. The Albanian government reportedly signed the contract to  purchase 499,590 doses for a cost of about $6 million.

According to an article in biospace.com published in June of last year, the average prices of vaccines per dose worldwide vary from $19.50 for  the “Pfizer-BioNTech” vaccine, $5.25 for AstraZeneca, $10 for Sputnik V and $29.75, the most expensive, for the Chinese vaccine “Sinovac.” All these vaccine types have been used in Albania.

In response to a records request from ACQJ,  the Institute of Public Health disclosed that the doses administered domestically from January 11th, 2021 to March 13th,2022, totaled 2,646,59. However, it would not disclose the cost per dose of each type of vaccine.

Government contracts at a time of COVID

In February 2020,  the Albanian government decided public institutions can contract with companies without public bidding if those companies can provide the required services and goods in cases of urgent need. Specifically that pertains to situaations, like the pandemic, that are “caused by exceptional circumstances beyond the control of the contracting authority and the time available for resolving the urgent need is not sufficient for the normal conduct of other proceedings.”

Since the promulgation of this decision, the Albanian government has signed 15 secret contracts and about 200 contracts directly related to COVID totalling $40 million, not includig VAT. None of the contracts involved an open competitive procedure. According to the legislation in force, none of these contracts, even if there is corruption or favortism, can be investigated by the Prosecution, due to the collective decisionmaking nnature of these acts.

Aranita Brahaj, Executive Director of the Albanian Institute of Sciences, a local NGO focused on oversight of government contracts through its programs like OpenData Albania, sees the situation as very problematic.

“The situation with secret tenders or tenders for essential interests of the state, was applied in some contracts in April 2020, through the Decision of the Albanian Government (not just the Ministry of Health). This type of procedure was abandoned very quickly, the reasons being several: the main one the government failed to provide the goods in real time as the Selected Contractors (businesses) had no capacity to provide goods for which there was a shortage in the international and regional markets. The other reason is also the attitudes of civil society against this process.”

Fatos Çoçoli, an economics expert, agrees  that there was no need for secret contracts to secure COVID-related goods.

“I believe that full transparency should be made. It is a great risk that the usual form of open tender is not followed,” Cocoli adds.

 Murrizi links these tender procedures to patronage in the government.

“Any tender classified as a “secret” tender has been performed so only for profit purposes, awarded to pre-determined companies without actual competition. The procurement law clearly defines which procurements must be held in secret, procurements for national security, technological equipment for the intelligence services, prosecution, some specific military equipment and some operational equipment needed by the structures that fight organized crime and terrorism.” Murrizi adds.

 Murrizi said masks, gloves, food, vaccines, etc. should not be bought through secret tenders.

 “Albania has a special law which breaks down in detail what is classified as secret, top secret, confidential information and sensitive information. Any other rationale is just to steal. Of  the secret tenders that have been signed during the years by this government, there are over 600 procurements of which the largest number is occupied by NAIS and the Ministry of Health, followed by the Ministry of Defense. Any tender classified as “secret” is a dangerous precedent for major abuses of public money. It is the most corrupt way of stealing public money,” Murrizi said.

During the pandemic, the Albanian government has awarded about 200 medical tenders, with a total cost of about $ 40 million without including VAT. Fourteen  special procedures, developed through special laws, cost 416,617,248 ALL with VAT (Around 4 million USD), while in total, the Ministry of Health and Social Protection has spent 1,383,707,749 ALL without VAT.

In second place, according to the OpenData tender database,  is the University Hospital Center “Mother Teresa”, with a figure of 1,383,615,012 ALL without VAT (around 13 Million USD). The hospital “Shefqet Ndroqi,” also known as the Sanatorium, has spent 624,620,800 ALL without VAT (around 6 Milion USD). for tenders during the pandemic.

During this period, the Ministry of Defense also was included in the umbrella of secret/confidential tenders, spending 141,585,500 ALL without VAT (around 1.5 million USD).

Asked about these secret tenders and future ventures into these procedures, Endri Fuga, Spokesperson of the Prime Minister’s office, noted that now that the emergency is over and the situation is almost completely back to normal, it is easy to forget the obstacles and problems of the first weeks and months of the pandemic.

“Governments in various countries, including EU member states, had a single goal: to do their utmost to provide as much medical equipment as possible, including respirators and tests, personal protective equipment, including masks and gloves, and oxygen and medication. This was the goal of the Albanian government. All this in the conditions when the market demand was at maximum, while the supply was almost non-existent. Borders were closed and governments of various countries confiscated goods from neighboring countries as if it were wartime, completely ignoring the existence of contracts for the purchase and sale of goods,” he said.

Fuga added that “Albania was in a state of emergency and the essential interest of the state was to save as many lives as possible in the face of a war with an unknown virus and with fatal consequences.”

Fuga insisted that any interested party can have access to these contracts and information from the appropriate institutions through simple FOIA requests.

However, the ACQJ submitted FOIA requests to all of the agenies that executed secret and centralied contracts. Only a few responded by referring the Center to other agencies and, in the case of the Ministry of Defense, providing only a minimal response and a referral to a broken government website link.

The ACQj asked the Ministry of Health why the contracts did not go through the public bidding process, but the Ministry did not respond.

Fuga on the other hand, pledged that now that the situation has stabilized, the Government will go through the standard procurement procedures for future tenders, and not through the emergency secret procedures.

Another problem noticed in the published tender database is that for some companies the real value of the contracts is not shown, with only the value per unit of medicines being public. This has made it almost impossible to deduce the total value of the contracts.

The main companies that have won the majority of contracts in the health sector are MEGAPHARMA LLC, INTERMED LLC, Rejsi FARMA LLC, MESSER ALBAGAZ LLC, EUROMED LLC, TRIMED LLC, INCOMED LLC, all major local companies having won contracts of significant value.

“The negative impact of these tenders has been that the contracts have been very close to the limit fund and this constitutes a loss for the state budget, because holding public tenders ensures competition, lower bids and the safeguard of the state budget,” Cocoli said. “This attitude of the ministry is a cover-up because now, even though we are in the conditions of the presence of the virus, we are not in the conditions of extreme emergency, therefore this information must be provided,” he added.

Cocoli believe  the Ministry is hiding  behind unnecessary artificial rules.

“We do not know if behind this kind of protection whether there is something there or they [the Minsitry] does not want to get in trouble by not providing any kind of information, but I think that it might be the former,” Cocoli said.

According to  Open Data Albania, these contracting procedures of the Government are unconstitutional, illegal, unjustified and in violation of the basic principles of good governance which are accountability and transparency.

Asked about the process of holding these tenders and signing these contracts, Tritan Shehu, former Minister of Health, said he finds them very problematic, harming competition, undermining equity and reducing the quality of products that come as a result of arbitrary choices.

“Any procedure that becomes non-transparent, not in accordance with the rules, obviously damages the quality of services and also damages the state budget by creating distrust among citizens towards state legislation,” Shehu said.

The ACQJ submitted a list of questions to the Ministry of Health and Social Protection but the Ministry refused to provide the information at first. Following a decision of the Commissioner for the Right to Information, the Ministry did provide partial information for some questions but not for all.

How did the U.S. handle COVID contracts?

Access to COVID-related spending in the United States is much easier.

In the U.S., there is a routine procedure for how the government handles medical contracts for vaccines and medical equipment needed for a virus such as COVID-19.  However, due to the pandemic emergency, the negotiation on pricing was altered.

Zain Rizvi, Research Director for the advocacy group Public Citizen, who is listed on that organization’s website as “an expert on pharmaceutical innovation and access to medicines”, said the process starts with the U.S. government going to the provider of medical equipment or vaccines, such as Pfizer, and telling the company the number of doses the government wants to purchase. The company and the government negotiate on price and eventually reach a deal.

Rizvi said Pfizer initially wanted to charge the government $100 a dose, but the government was able to negotiate that number down to $19.50 per dose, the price stated in the initial contract. Then the government instructed Pfizer where to distribute.

Derek Willis, a news applications developer for the nonprofit news outlet ProPublica and a journalist since 1995, is concerned about how COVID-related contracts were executed in the US.

“The data shows the sheer number of sole-source, no-bid contracts. We had people telling us ‘it’s unusual, but it’s an emergency so it can happen,” said Willis.

“Sometimes we struggled to get on a timely basis, additional information about the contracting process. For example, if we wanted to see what kind of bids people submitted or any kind of documentation within a specific agency about a specific contract, we would have to use the Freedom of Information Act and it would almost always take forever to get resolved. But in terms of the information itself, it’s pretty good and pretty helpful,” Willis added.

Willis also spoke to the general accessibility of these medical contracts to the public.

“There were definitely some things we had to read, some manuals, and talk to people to figure out individual nuances in the data. But in terms of getting the data itself, no, it wasn’t terribly difficult,” said Willis, “Compared to other scenarios I’ve been in, in terms of acquiring government data, this was pretty easy”.

The amount of vaccine doses purchased as well as the prices are available to the public on the website Medical Countermeasures.gov. Also included are the medical contracts between the U.S. government and companies providing equipment such as COVID-19 tests.

In addition, the U.S. Department of Health & Human Services’ website publishes some, but not all, of the medical contracts and ProPublica has constructed a database containing information on all of the medical contracts related to  the COVID-19 virus. According to that database, the U.S. government executed 18,243 contracts totaling $39.9 billion to fight the virus.

In addition, there is information on the vendors that have received the largest amount of government money and their location, the largest contracts and their specific price, the type of vendors receiving contracts, and how much has been spent on different categories.

For example, ProPublica shows that $7.07 billion has been spent on “Medical and Surgical Instruments, Equipment and Supplies” and $1.63 billion on “Laboratory Equipment and Supplies”.

But there are limits to transparency.

The most common information redacted pertains to an exemption in the federal Freedom of Information Act (FOIA) which “protects ‘trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential.’ This exemption is intended to protect the interests of both the government and submitters of information.”

The U.S. government and the company both have to agree to allow information to be made publicly available. Experts say the government often allows the company to redact whatever they want to maintain a good relationship for future negotiations.

“Quantity pricing, unit pricing, clinical trial cost information” are some more examples of things that are often redacted from these medical contracts,” said Kathryn Ardizzone, a lawyer for a nonprofit called Knowledge Ecology International which describes itself as searching for better outcomes, including new solutions to the management of knowledge resources

Ardizzone said there are specific business reasons for the redactions.

“The contractors want their product to look as profitable as possible. So, if there were rights that the government could exercise that could create uncertainty as to the companies’ ownership over its intellectual property or rights the government could leverage in the resultant products, then that might be something the companies or the government would want to withhold,” she said.

It is the government’s job to defend these redactions when dealing with Freedom of Information Act requests.  However, Ardizzone pointed out a possible explanation for the number of redactions seen in COVID-19 medical contracts.

“The government has reason to be very careful and lean towards withholding [information] because if the government releases information that the contractor wants to withhold, the contractor can sue the government, so there’s risk,” she said.

Willis agrees.

“I don’t think Pfizer or any contractor has 100% editorial control over what redactions are made, but I think they can assert certain claims that these are protected business trade secret information, and I think the government has to entertain that assertion”.