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MANILA, Philippines — Sen. Raffy Tulfo has accused the Department of Health of deliberately buying up medicine close to its expiration date from favored suppliers to open up an avenue for "kickbacks" using the cheaper drugs.
During Friday's (September 4) Senate deliberations of the DOH's proposed 2027 budget, Tulfo confronted newly appointed Health Secretary Edwin Mercado over the possible scheme that has also led to the expiration of billions of pesos worth of medicine in government warehouses.
The senator said in 2023, at least P11 billion worth of expired drugs were "buried underground (ibinaon sa lupa)."
"Dapat diyan may makulong. Dapat diyan may mapugutan ng ulo eh. Napaka-eskandalo ng amount na 'yan," he said.
(Someone should be arrested. Someone's head should roll. That amount is scandalous).
Tulfo first called out the DOH over whether it can "guarantee" the public that the medicines it procures for 2027 would not expire before use, before asking if it is a ploy to get near-expired medicine in the procurement process.
"Ayon sa aking source, sinasadyang bibilhin about to be expired kasi mas mura at galing sa mga pinapaboran na mga supplier," he added.
(Based on my source, it's intentionally purchased when it is about to be expired, because it is cheaper and sourced from favored suppliers.)
"Just imagine how many millions of kickbacks in the past years for the procurement officer," Tulfo said in mixed English and Filipino.
Mercado, who assumed his post as DOH chief on August 10, confirmed that one of the DOH undersecretaries who recently stepped down handled procurement.
Randy Escolango, the former DOH undersecretary for financial and supply chain management services, resigned on August 15 while facing a complaint before the Office of the Ombudsman.
DOH employees filed a complaint in June accusing former Health Secretary Ted Herbosa and Escolango of a "self-policing conflict of interest."
The filing alleges Escolango had unchecked authority over drug procurement by serving as Bids and Awards Committee chair while simultaneously managing the department's finance and supply chain functions. Escolango has not publicly addressed the allegations.
State auditors have found expired or expiring DOH medicine worth P18.5 billion from 2015 to 2018, P2.2 billion in 2019, P95.15 million in 2020, P85 million in 2021, P7.4 billion in 2022, and P11.18 billion in 2023 — the last figure including more than 7 million vials of expired COVID-19 vaccines and 24,539 bags of donated dialysis solution. In 2024, Commission on Audit found P34.8 million of drugs already expired, with a further P99.5 million nearing expiration.
COA has flagged the DOH for gaps in procurement planning, poor distribution, and weak monitoring of its inventory.
18-month shelf life rule?
Responding more broadly to questions about how the DOH could guarantee that newly procured drugs would not be near their expiration date, Meraco pointed to the 18-month shelf-life rule and the disqualification of non-compliant suppliers as existing safeguards.
"Napakahigpit na po ngayon doon sa procurement na dapat po talaga 18 months po yung stocks na darating (We're very strict now with the requirement that the stocks have an 18-month shelf life)," Mercado said.
Tulfo however raised the possibility that something is amiss with the timing of purchases. He claimed the department gets around the 18-month rule by delaying the purchase of medicine it knows it needs until shortages become declared emergencies, which then allows it to bypass competitive bidding.
"'Yun 'yung modus diyan sa DOH (That is the modus at the DOH)," he said.
Mercado told the committee the department was pursuing three changes to avoid its stock of drugs from expiring in warehouses.
First, he said the department would channel more of its medicine procurement budget through the Philippine Health Insurance Corp. (PhilHealth), which he said could negotiate bulk, discounted prices directly with suppliers using its own pharmacists.
The second change, Mercado said, is already being enforced: with only 40% of medicine procured centrally by DOH, the remaining 60% — mostly common medicines available locally — are bought through the department's regional Centers for Health Development.
Mercado said the department was also overhauling its inventory-tracking IT system.
"But as what Sen. Tulfo said, I will be creating an investigating committee," Mercado said.
Tulfo pointed out that a similar body — the department's own Inter-Office Task Force — already existed.
However, a member of the task force present during the hearing, Undersecretary Gloria Balboa, said they do not investigate medicine wastage and instead hold weekly meetings on policy, procurement and supply chain issues.
Possible Blue Ribbon probe
Tulfo said a full Senate Blue Ribbon probe may be called soon into the hoarding and drug wastage at the department.
In the same hearing, Tulfo lamented how mental health drugs accounted for the bulk of DOH’s 2026 waste—including stock meant for the Mandaluyong Mental Health Center that expired because staff lacked training to administer it.
He also cited tip-offs that expired inventory was fraudulently relabeled and resold outside official channels.
"You in DOH don't have the capability to administer this, so it just expired," Tulfo said.
Tulfo further questioned why the department had to spend P3 billion to replenish TB medicine stocks after a previous P3.225-billion procurement was suspended in July by former Health Secretary Jose "Brix" Pujalte Jr.
Pujalte, who resigned in August amid the conflict-of-interest allegations and a reported casino scandal, claimed the pause was for inventory verification.
Mercado confirmed the stalled purchase has since resumed.
The Philippines ranks third globally in tuberculosis burden, according to the World Health Organization.
Tulfo urged Mercado to overhaul the DOH's inventory system and stop the massive drug expiration.
"Build a system. Hopefully, you can perfect it so no medicines expire," Tulfo said. "If expiration is unavoidable, it shouldn't reach P100 million. P1 million or P2 million is tolerable—but hundreds of millions... Meanwhile, many health centers aren't getting medicines."
The DOH has a proposed P353.8 billion for 2027 under the National Expenditure Program, P95 billion or 21% lower than its enacted budget this year of P448 billion.
