Alberta Premier Danielle Smith answers questions at a news conference while Health Minister Adriana LaGrange listens in the background in Calgary on Feb. 19.Todd Korol/The Globe and Mail
Alberta’s health authority pressed a medical supplier in December to prove it was working to fulfill a contract to import millions of doses of pain medication from Turkey, accusing the company of doing very little work after being paid tens of millions of dollars.
That company, MHCare Medical Corp., is a key figure in allegations from a former chief executive officer of Alberta Health Services that government officials interfered in contract negotiations on behalf of private companies. Those allegations by former CEO Athana Mentzelopoulos, which were first reported by The Globe and Mail earlier this month and later detailed in a wrongful dismissal lawsuit, are now under review by the province’s Auditor-General and prompted the government to announce its own investigation.
Ms. Mentzelopoulos has alleged that she launched an internal investigation and external audit last fall into various AHS contracts, including the pain medication deal with MHCare. That contract was already under scrutiny after safety concerns with the drugs arose and the company’s owner treated cabinet ministers to NHL playoff tickets.
MHCare had facilitated a $70-million deal to import children’s ibuprofen and acetaminophen from Istanbul-based Atabay Pharmaceuticals during a global shortage three years ago. Only 1.5 million of five million bottles of medication were delivered, despite the fact the province had paid millions upfront. Use of the medication was later discontinued by AHS for safety reasons.
In a letter sent from AHS chief financial officer Michael Lam to MHCare on Dec. 20, a copy of which was obtained by The Globe, he said the company had been holding $49.2-million of government money for “well over a year” and demanded to know whether MHCare was taking steps to additionally import intravenous acetaminophen.
Mr. Lam, in his letter addressed to MHCare’s chief operating officer, Keri Shannon, said it was unclear whether the contract was being “performed in accordance with its terms and conditions.” He said a supply agreement signed in July, 2023, required MHCare to initiate the process with Health Canada to import intravenous acetaminophen and keep AHS informed of its progress, including when the first shipment would arrive.
Health Canada said in a statement to The Globe last week that the agency had not received any proposals from the Alberta government, MHCare or Atabay Pharmaceuticals to import intravenous acetaminophen to the province.
Jessie Bakker, a lawyer representing MHCare and its CEO, Sam Mraiche, said in a statement Tuesday that “any allegations or insinuations of wrongdoing on the part of MHCare Medical Corporation and/or Sam Mraiche are unwarranted and unjustified. We reiterate that our clients have acted properly at all times.”
Mr. Lam, in his letter to Ms. Shannon, gave the company until Jan. 8 to provide “a detailed status update” of its outstanding commitments, in addition to a “full accounting and reconciliation of the prepayments” the health authority had made.
“MHCare has provided AHS with limited written documentation regarding the status of Health Canada’s importation approval process, and no information that we can find on file with respect to MHCare’s handling and use of the prepaid amounts,” he wrote.
Ms. Shannon replied to Mr. Lam on Jan. 7 and said MHCare needed an extension and would reply within one month. “Time is needed to put the information together, and we will need to consult legal counsel to make sure all information being requested needs to be legally provided,” she said in an e-mail obtained by The Globe.
It is unclear if any information or documentation was provided to AHS. Holly Budd, a spokesperson for the health authority, declined to comment while the matter is before the courts.
Ms. Mentzelopoulos was fired by the Alberta government on Jan. 8 and is now suing AHS and Adriana LaGrange, the province’s Health Minister, for wrongful dismissal.
She alleges in her statement of claim, filed last week, that she was fired because she was investigating the contract with MHCare, as well as negotiations with a separate company for charter surgical facilities, which are private companies the province hires to perform publicly funded operations. She is seeking $1.7-million – what she would have been paid had her four-year contract not been cut short after just one year.
Through her legal counsel, Ms. Mentzelopoulos declined to comment for this story.
None of the allegations have been proven in court.
The Globe also obtained the original purchase order with MHCare, dated Dec. 9, 2022, as well as a subsequent supply agreement with the company, signed July 24, 2023, two weeks after the health authority ordered its staff to stop using the children’s pain medication. The latter agreement triggered a final deposit of $28-million from AHS to MHCare, which, according to the December letter sent by Mr. Lam, was already holding $21.2-million in prepaid funds.
Premier Danielle Smith did not respond to a request for comment. Ms. LaGrange’s office deferred questions to AHS. Ms. LaGrange has said she intends to file a statement of defence, while the Premier has said she has ordered government officials to co-operate with the Auditor-General as he examines allegations tied to contracting and procurement at AHS and the Ministry of Health.
Mr. Lam also noted in his letter that AHS had become aware that “one or more” former AHS employees were affiliated with MHCare around the time the original medication deal was being struck in 2022.
Ms. Mentzelopoulos, in her claim, alleged that Jitendra Prasad, who worked in procurement for AHS, had an e-mail account with MHCare at the same time he was negotiating the Turkish medication contract. She said she was concerned about Mr. Prasad’s relationship with the Premier’s former chief of staff Marshall Smith and potential conflicts involving Mr. Prasad, MHCare and “potentially” private surgical facilities.
E-mails obtained by The Globe show that on Jan. 11, 2023, Mr. Prasad forwarded an e-mail from an MHCare account in his name to what appears to be his personal Gmail account, then to his AHS account. He then forwarded that e-mail, which included the résumé of another person with an MHCare e-mail, to an AHS employee who worked in procurement. The original forwarded e-mail was dated Nov. 7, 2022.
Mr. Prasad did not respond to a request for comment.