Alberta Health Services Seeks to Recover $49 Million from MHCare Amid Procurement Probe
Alberta Health Services (AHS) is pursuing the recovery of $49 million paid to MHCare Medical Corp. For drugs that were never delivered, according to statements from Alberta Premier Danielle Smith and government officials. The move comes as investigations continue into allegations of misconduct in government health contracts and a search of MHCare’s offices by the Royal Canadian Mounted Police (RCMP).
Shift in Strategy for Recouping Funds
Premier Smith stated that AHS has abandoned its previous plan to recoup value by purchasing additional medication from MHCare. “They were looking at one pathway to get an alternative product and they have exhausted that avenue,” Smith said. “And AHS is now looking at means to be able to recover the outstanding balance.”
Contract Details and Initial Dealings
In late 2022, AHS signed a $70-million deal with MHCare for five million bottles of children’s acetaminophen and ibuprofen manufactured in Turkey. Although, Health Canada limited the amount of medication MHCare could import, resulting in the delivery of only 30% of the order. A subsequent deal was then made for intravenous acetaminophen, with AHS paying MHCare the remaining balance of the original contract.
Legal and Investigative Efforts
Mickey Amery, Alberta’s Justice Minister, indicated that AHS is currently in mediation with MHCare to recover funds. Matt Jones, the Minister for Hospitals and Surgical Health Services, stated that AHS is exploring “contract tools, arbitration and ultimately are evaluating legal options” to recover the $49 million.
The RCMP executed search warrants at MHCare’s offices in Edmonton last week as part of a year-long investigation into procurement irregularities. A separate search was conducted at an accounting business belonging to Sam Jaber, formerly MHCare’s chief financial officer.
Ongoing Audits and Allegations
The Alberta Auditor-General, Doug Wylie, is also conducting a probe, scheduled to be completed before his departure on April 28th. The United Conservative Party rejected Wylie’s offer to extend his term to finish the investigation. The legislature committee recently recommended Phillip Peters as the next auditor-general.
The controversy stems from allegations made by former AHS chief executive Athana Mentzelopoulos, who claims government officials interfered in procurement processes and that she was fired for investigating potential conflicts of interest and inflated contracts. These allegations have not been proven in court, and both the government and MHCare deny any wrongdoing.
MHCare’s Response
MHCare’s lawyer, Scott Hutchison, maintains that the company intends to fulfill the terms of its contract with AHS. “There is a contract in place. Its terms were negotiated by AHS and approved by AHS at the highest levels,” Hutchison stated. “MHCare remains of the view that it will be able to fulfill the terms of its contract with AHS in full, as has always been its intention.” Hutchison also noted that MHCare is actively communicating with Health Canada regarding the import of intravenous acetaminophen, but regulatory approvals are beyond their control.
With reports from The Canadian Press