By Waldaniel Amadis | 2023-09-28

SÃO PAULO -- A Brazilian front company acting for a Chinese pharmaceutical firm that was awarded a $57 million contract from the Ministry of Health without going through a competitive tendering process is under investigation.

The Brazilian shell corporation that secured the multimillion-dollar contract, signed in April, is notable for having just one registered employee and a stated capital of 1.3 million BRL ($260,000).

The investigation is in its "initial phase," Brazil's Federal Court of Accounts (TCU) told Entorno, but it declined to provide specific details.

The Metrópoles news site obtained exclusive access to the contract, and on Tuesday (September 26) published a comprehensive report detailing the agreement.

The contract concerned the supply of 293,500 doses of human immunoglobulin, a therapeutic blood product used to enhance the immunity of patients grappling with various ailments, including Guillain-Barré syndrome.

Auramedi Farmacêutica, which is based in an unoccupied residence situated in a non-commercial zone in Aparecida, in the central state of Goiás, is relatively obscure in the pharmaceutical market.

On a national scale, it stands as the representative of the Chinese company Nanjing Pharmacare, which has no history in Brazil.

Nanjing Pharmacare operates as a commercial intermediary, facilitating transactions between manufacturers and buyers.

Auramedi Farmacêutica and its sole shareholder, Fábio Granieri de Oliveira, are facing another investigation following allegations of administrative impropriety.

This case is being pursued in the Court of Justice of the Amazonian state of Pará, in the country's north, because of suspicions of fraud in a regional contract.

The contract was awarded without a bidding process.

Even though it is under active investigation, Auramedi Farmacêutica has encountered no restrictions on participating in tenders or signing contracts with the Brazilian government.

Investigators in the case reportedly fail to comprehend how the Ministry of Health awarded a contract to a company under legal scrutiny.

Opaque process

Auramedi Farmacêutica was founded in 2013, and de Oliveira became the sole partner in May 2020. During this transition, the firm's share capital increased significantly, rising from 50,000 BRL ($10,000) to 1.3 million BRL ($260,000).

According to the Transparency Portal, Auramedi Farmacêutica started engaging in tenders with federal agencies last October.

To secure the substantial Ministry of Health contract, the company had to fulfill a legal obligation by paying 246,600 BRL ($49,000) for mandatory insurance, as stipulated by law.

The ministry had the option to procure a lesser quantity of the medicine without a bidding process. But its decision to engage in a six-month contract raised suspicions regarding the urgent necessity for this particular product.

Auramedi Farmacêutica completed the delivery of the medications, albeit with a delay of 35 days.

During the process, observers noted that despite the absence of a public tender, other companies were excluded from consideration.

Notably, major European and US pharmaceutical companies, typically suppliers for this type of medicine, expressed concerns over the absence of a bidding process.

In response to the heightened scrutiny, the Ministry of Health stated that the "emergency purchase" aimed to prevent a shortage of immunoglobulin and affirmed that the acquisition adhered to Brazilian regulations.