Customs raid warehouses of company ordered investigated by Duterte

MANILA, Philippines (UPDATED) – The Bureau of Customs seized an estimated P50 million worth of medical supplies and equipment in warehouses owned by Omnibus Biomedical System, Inc., a company that has been allegedly selling overpriced medical equipment to the government.

The BOC raid took place in the afternoon of May 28, Thursday, at the company’s warehouses on Wilson Street in Greenhills, San Juan and in Malabon City.

The team presented the Letter of Authority (LOA) and Mission Order (MO) signed by BOC Commissioner Rey Leonardo Guerrero to the Chinese nationals who were at the warehouse.

Omnibus Biomedical System, Inc. was mentioned in a Senate inquiry to be allegedly selling overpriced extraction machines to the government amid the coronavirus pandemic.

The BOC said it has been investigating the company for alleged smuggling operations.

Authorities claimed the company is hoarding and overpricing medical supplies and equipment such as high-pressure stream sterilizer, blood bags, books, real-time quantitative thermal cycler, and other medical supplies and equipment. 

The BOC said it will file a case against the company if it fails to show proof of payment of taxes and duties. 

Omnibus statement

In a statement sent to Rappler on Sunday evening, Omnibus Biomedical System, Inc. denied the allegations hurled at the company.

“There is no truth to the reports that the company directly sold Sansure Polymerase Chain Reaction (PCR) machines and test kits to the Department of Budget and Management (DBM), the Central Office Bids and Awards Committee -Department of Health (DOH), and PhilHealth,” the company said, adding:

“Our company adheres to a business practice aimed at providing the best value in life science equipment. We will not tarnish that reputation especially [during] the COVID-19 crisis.”

This was how Omnibus explained its pricing of the COVID-19 testing machines that was the heart of allegations made that made President Rodrigo Duterte order the National Bureau of Investigation (NBI) to investigate the company:

“The confusion over the prices of the COVID-19 testing machines sold by Omnibus happened when general statements were made and failed to note that the company was actually offering packages with different inclusions for clients.

“When Omnibus facilitated the sale of the Sansure NATCH CS Fully Automated Nucleic Acid Extraction System machine for Go Negosyo’s Project ARK, the price was P1.75 million. Omnibus explained: “We facilitated the purchase of Go Negosyo at the price of $35,000 or (roughly around P1.75 million at the time of purchase). This was done via a free on board or FOB arrangement. Go Negosyo was the one who paid the additional costs for air transport, destination charges, storage, and warehousing.” Sansure Biotech is based in China.

“Meanwhile, when the Procurement Service of DBM (PS-DBM) called for a Request For Quotation for Thermo Fisher, Omnibus offered a similar machine from Sansure on April 23, 2020 as a ready-to-use package at P4.3 million. This package included 25,000 NATCH consumables, which are the plastics that are used to carry out the RNA extraction. It also included costs such as air transport, destination charges, storage, warehousing, local delivery fees, warranties, as well as peripheral accessories needed to run the said machine, preventive maintenance and technical calibration fees, bonds, and retentions.

“Omnibus offered another package that cost P4 million to PS-DBM on May 6 as a Promotional Letter, including Marketing Materials for Budgetary and Reference Quotations. It was a slightly lower price because the machine and NATCH consumables were priced separately.  That was the only difference. All other additional costs were included.

“Moreover, Omnibus was operating within a difficult delivery scenario and rushing to fulfill a possible very short delivery period. With these challenges, the costs added up to P4.3 million (for the NATCH machine with 25,000 PCR consumables) and P4 million (for the NATCH machine alone). Bottom line, Omnibus stands by its statement that they offered a fair price for both packages mentioned.”

No monopoly of PCRs

In its statement, Omnibus also said that it had “never hoarded nor do have a monopoly of PCR, NATCH machines and COVID-19 testing equipment and kits.”

According to Omnibus, it can be easily confirmed that it is the exclusive  distributor for the Sansure brand only.

The company’s statement added:

“The Food and Drug Administration (FDA) also confirmed that there are ‘at least 45 approved brands for PCR-based testing.’

“Even with its exclusive distributorship of Sansure products, there are at least three other companies selling Sansure as well. There is no way that Omnibus can corner the industry.

“Furthermore, Omnibus had no power whatsoever on the bidding process for the test kits. In fact, Omnibus lost in the bidding and so far does not have an existing business transaction with DBM, COBAC-DOH and PhilHealth on the test kit and medical equipment in question.

“Omnibus also did not protest their loss in the bidding process. They respectfully accepted the decision of the government.”

“We value our customers and will never engage in profiteering, hoarding, or blackmailing. We stand on two decades of hard work and service commitment to our stakeholders through the selfless dedication of our employees. Our ISO certification for the past three years attests to the heart and passion to be preferred partners in the healthcare industry,” the company said.

Duterte order

In a taped address on Monday, May 25, Duterte directed the NBI to investigate the couple who own Omnibus Biomedical System, Inc.

Budget Undersecretary Lloyd Lao had identified them as among the bidders interested in supplying equipment to the government, and offered to sell automated extraction machines to the government for some P4 million. The market price of the machine is P1.75 million. 

Lao said that this was the equipment that Senator Panfilo Lacson referred to in a recent Senate hearing as being overpriced. Omnibus, however, lost the bidding to a Hong Kong-based company.

The BOC has earlier raided stores selling overpriced medical supplies. In March, it seized some P5 million worth of Personal Protective Equipment (PPE) and alcohol from a store in Binondo, Manila. 

Earlier in May, the agency raided a warehouse in Singalong, Malate, Manila for selling alleged medicines for COVID-19.

Presidential Spokesman Harry Roque earlier said that profiteering is punishable by law through the Price Act and Bayanihan Law. – Rappler.com