Procurement
in mental health

High levels of supplier concentration in mental health procurement and award of contracts without competition

Full version in Spanish

Illustration: OjoPúblico / Claudia Calderón.

The public contracts signed by five Latin American countries to procure basic medication for the treatment of mental and psychological disorders were awarded without following a public tender procedure or to sole suppliers or to companies with poor corporate practices. An investigation led by the Network of Latin American Journalists for Transparency and Anti-Corruption, in which OjoPúblico (Peru), LaBot (Chile), Ojoconmipisto (Guatemala), la diaria (Uruguay), PODER (Mexico) and La Nación (Argentina) participated, accessed the sales contracts that were signed between 2017 and 2021 with a small group of companies, and analyzed the meagre budget allocated by these six governments to the mental health of their citizens

By Elizabeth Salazar, Ignacia Velasco, Isaías Morales, Bruno Scelza, Federica Pérez, Ricardo Balderas and Florencia Rodríguez Altube.

The impact of Covid-19 on mental health can be seen in the severe neurological problems experienced by a number of survivors and in the increased prevalence of anxiety and depression, which according to the World Health Organization (WHO) rose by 25% in the first year of the pandemic. Stigma towards disorders of this kind, the limited number of professionals available, the low level of State investment and difficulty in accessing basic medicines are some of the obstacles which the WHO has identified as needing to be overcome in order to fully meet the needs of the population.

In light of this situation, the Network of Latin American Journalists for Transparency and Anti-Corruption (Red Palta) analyzed the budgets allocated to mental health care in a number of countries in the region and submitted public information access requests to find out the amount of money invested in the procurement of psychotropic drugs between 2017 and 2021. They discovered that contracts were frequently awarded without following a competitive procedure, tenders were won by single bidders and competitive bidding processes took place in which subsidiaries of the same economic group were competing.

The documents reviewed by the team comprising OjoPúblico (Peru), LaBot (Chile), Ojoconmipisto (Guatemala), la diaria (Uruguay), PODER (Mexico) and La Nación (Argentina) also offered an insight into the distribution of resources allocated to the treatment of mental health conditions and revealed that marketing authorizations and contracts were concentrated in the hands of companies that had been found to have poor corporate practices.

In Chile, the Central Purchasing Agency for the National System of Health Services (Cenabast) reported that it had invested USD 124 million in the procurement of 35 drugs considered essential for good mental health. In Peru, over the same period, the National Center for the Supply of Strategic Health Resources (Cenares), which is part of the Ministry of Health (Minsa), allocated USD 12.7 million to the procurement of 26 types of drugs through massive corporate contracts. In Guatemala, drug supply contracts worth USD 1.1 million were agreed with the Federico Mora Mental Health Hospital, which is the principal agency responsible for managing these operations.

As for Uruguay, the investigating team consulted the Single Register of Suppliers (RUPE) and discovered the names of the companies that supplied the country with the 10 most in-demand psychotropic drugs, which are included on the Therapeutic Drug Roster (TDF). The respective contracts were signed between March 2020 and May 2022, and were worth USD 1,037,400. In Mexico, meanwhile, the team was only able to access information about the procurement processes for 16 essential drugs managed by the Mexican Social Security Institute (IMSS) between 2019 and 2022. The contracts for these drugs were worth USD 2.9 million.

In Argentina, the Ministry of Health replied that the Purchasing and Procurement Department did not have any procurement processes that were concluded in the period in question, except for one tender that is currently in process worth USD 299,415 and which includes six drugs. However, Red Palta discovered that in 2020 and 2021, the Argentine State did in fact purchase psychotropic drugs with funding from the Inter-American Development Bank (IDB) and the United Nations Development Programme (UNDP).

The money invested on these drugs in Latin America is a portion of the resources available to governments to care for the health of people living with mental disorders, because public expenditure is also distributed among services, infrastructure and payroll payments. The amount allocated to this sector represents a tiny fraction of the resources received by the Ministries of Health in each country.

The latest Mental Health Atlas, produced by WHO in 2020, reveals that the average global investment for the treatment of mental health conditions is less than USD 1 per person in low-income countries, and up to USD 52 in higher-income economies. Overall, according to the report, government expenditure on mental health is just 2.1 per cent of the annual budgets allocated to the health sector.

For example, in Chile, this year’s budget shows that health sector resources are USD 13,741 million, equivalent to around USD 693 per person, but only USD 110 million is allocated to caring for mental disorders, which is about USD 6 per capita. In Peru, information from the Ministries of Health and Economy show that the overall health budget is USD 8,345 million, in other words, about USD 378 per person. However, the amount allocated to mental health conditions is just USD 150,481,393, i.e. USD 5 for each citizen.

In Guatemala, according to the website of the Ministry of Public Finances, health sector investment for 2022 is USD 1,656 million, which means that the expenditure per capita is USD 94. Similarly in Mexico, figures from the civil society organization Center for Economic and Budgetary Research (CIEP) show that the total resources allocated to health are USD 33,178 million, equivalent to USD 259 per person. Neither country has a specific budget for mental health.

The same is true for Uruguay where figures from the Ministry of Economy and Finance show that a total of USD 2,158 million is allocated to health (around USD 609 per inhabitant). To date, the resources promised since 2017 in the Mental Health Law (no. 19.529) to cover mental health conditions have not materialized.

In Argentina, data from the Ministry of Economy confirms that the budget carried over for health is USD 4,605 million (USD 99.60 per citizen). Although different entities are responsible for mental health care in the country, the Civil Association for Equality and Justice (ACIJ) has calculated that the combined resources of the four main State institutions that invest in this area amount to an equivalent expenditure of USD 1.3 per capita. Despite the fact that the 2010 National Mental Health Law stated that this sector should receive 10% of total health expenditure, the proportion of that budget allocated to mental health has never exceeded 2.2% at any time in the past decade.