Alberta Health Services Contract for Children's Pain Medication Increased by $7 Million Without Clear Documentation
A former Manitoba judge leading investigations into Alberta health procurement activities has revealed that he could not determine how an Alberta Health Services contract to procure children's pain medication increased in cost by $7 million. The addendum report, released on Friday, follows retired justice Raymond Wyant's initial review into allegations of government interference and corruption in AHS procurement from October.
Forensic Accounting Unable to Justify Contract Increase
The latest findings focus on a 2023 renegotiated deal with Edmonton-based importer MHCare to secure alternative children's pain medication. Forensic accounting specialists from consulting firm RSM Canada, who were contracted to review the procurement processes, stated they could not find documentation supporting why the contract value increased by $7 million.
"To summarize, based on the documentation reviewed, RSM was unable to find support for the contract value of $56 million between AHS and MHCare," Wyant wrote in the letter accompanying the report.
Procurement Timeline and Outstanding Balances
The procurement situation developed from a national shortage of children's pain medication in late 2022, which led the government to rapidly procure five million bottles of medication manufactured by Turkish brand Atabay Pharmaceuticals. In December 2022, AHS issued a $70 million purchase order to Edmonton-based importer MHCare.
However, Health Canada only approved a small portion of the requested product—just 1.5 million bottles of children's pain medication—creating an outstanding contractual commitment. The purchase order had been made prior to Health Canada's approval.
In July 2023, AHS entered a five-year $56-million deal with MHCare to purchase alternative products from Atabay. This contract represented a significant increase from what would have been expected based on the approved medication quantities.
Government Response and Ongoing Implementation
Yonathan Sumamo, an assistant deputy minister of communications and public engagement for the Government of Alberta, stated that the addendum reaffirms the findings in Wyant's initial report of "serious procurement and contract-mismanagement failures within AHS" while also finding no evidence of wrongdoing by elected officials, political staff or the Alberta public service.
"The government has accepted all of justice Wyant's recommendations and is actively implementing them to strengthen oversight, accountability and transparency in procurement going forward," Sumamo said in a statement to media.
Contractual Questions Remain Unanswered
In his letter attached to the RSM report, Wyant specifically cited his October 15 report in which he said he could not justify how the $56 million contract was determined, noting that it had been increased by $7 million from what might have been expected. The report highlights approximately $49 million in outstanding medication commitments that remain unresolved through this procurement process.
The investigation continues to examine how procurement decisions were made within Alberta Health Services during a period of medication shortages, with particular focus on documentation and justification for contract values that appear to exceed what would be expected based on approved medication quantities.
