ISLAMABAD - The special audit of Drug Regulatory Authority of Pakistan (DRAP) has observed misappropriation of more than Rs750 million as the Authority has failed to function drug laboratory and utilise the central research fund.

The Auditor General of Pakistan (AGP) in its special audit report on DRAP working under the Ministry of National Health Services (NHS) urged the authorities to fix the responsibility for the negligence.

It said the project titled “Federal Drug Surveillance Laboratory, Islamabad” was approved at total cost of Rs156.27 million by the Central Development Working Project (CDWP) in 2006.

The objectives of the project were to ensure availability of safe, efficacious and quality drugs to the general public by establishing its laboratory with credible testing system which in due course of time may obtain International certification and accreditation by World Health Organisation (WHO).

It also had to establish a reference laboratory for testing and certifying commodities for export purpose in post-World Trade Organisation (WTO) scenario.

The laboratory also had to provide a centre for research and development in the field of medicines and to establish an Institute for Standardisation and Distribution of secondary and working reference standards of Active Pharmaceuticals Ingredients (APIs) from primary/pharmacopial reference standards for manufacturers to bring harmonization standards in pharma industry.

The audit report said that the management of DRAP incurred an expenditure of Rs151.648 million under the project up to 30.6.2014.

It observed that the PC-1 of the project was approved in 2006 with the completion period of 18 months while the laboratory could not be made functional despite lapse of more than nine years.

It added that the building constructed costing Rs67.739 million for establishment of the laboratory was transferred and handed over to Federal Medical and Dental College.

It also observed that the laboratory equipment was shifted to another building where the equipment was not utilised for the intended purpose while the warranty period of the laboratory equipment has expired.

The expenditure of Rs30.649 million has been incurred on establishment cost without output and outcome. The chemicals and consumable purchased for laboratory have also expired. 

The audit viewed that non-functioning of laboratory has resulted in wastage of public funds invested as well as non-achievement of objectives despite the fact that general public remained deprived of the benefits of the laboratory.

It also viewed that general public and national exchequer had to sustain loss while management neglected the non-functioning of the laboratory.

The DRAP management replied that the project could not be completed within time frame due to financial crunch in the country which was beyond the control of the management of laboratory. It also said that some of the chemicals have exceeded the date of shelf life. The matter may not be taken in isolation as the laboratory was in constraints for hiring proper staff and things could not get mature in time.

However, the AGP did not accept the reply as the non-functioning of laboratory has resulted in wastage of public funds and general public remained deprived of the benefits of the laboratory.

The audit also observed that the DRAP management failed in utilising the Rs606.646million Central Research Fund (CRF) used for conducting research and evaluation of the drugs.

The DRAP rules recommend that the CRF kept with the federal government shall be transferred to the authority. The federal government may utilise the CRF for research, development or evaluation of a drug itself or through a research institution working under its control or disburse it among investigators or institutions.

The fund was to be utilised to meet capital or recurring expenses of research proposals or projects and strengthening the existing facilities of drug research and development, duly recommended by the committee and approved by the authority.

It was also to be utilised for establishing and up-gradation of Drug Research and Testing laboratories.

The audit observed that the DRAP management did not plan utilisation of CRF accumulated the funds and did not utilise it for conducting research, development or evaluation of drugs since inception of the authority.

It viewed that the non-utilisation of CRF for the intended purposes defeated the objectivity and utility of creation of funds.

The DRAP management replied that DRAP and Financial Rules 2015 has been notified vide statutory notification on 11.03.2015 and utilization will start in accordance with the Drugs research rules 1978. However, the reply was not accepted by the AGP as the management did not plan utilisation of CRF, accumulated the funds and did not utilise it for conducting research, development or evaluation of drugs since inception of the authority.