Alberta Premier Danielle Smith said the province’s health authority is now trying to recover tens of millions of dollars it paid MHCare Medical Corp. for drugs the company never delivered.
Alberta Health Services, Ms. Smith told reporters, has abandoned its previous strategy of trying to recoup value for some of the money it paid MHCare by purchasing even more medication from the company, which is at the centre of the province’s procurement controversy.
“They were looking at one pathway to get an alternative product, and it appears that they have exhausted that avenue,” Ms. Smith said of Alberta Health Services. “And AHS is now looking at means to be able to recover the outstanding balance.”
In response, MHCare’s lawyer reiterated that the medical-supply company intends to make good on the terms of the contract.
“There is a contract in place. Its terms were negotiated by AHS and approved by AHS at the highest levels,” Scott Hutchison said in a statement to The Globe and Mail. “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.”
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The health authority in late 2022 signed a $70-million deal with MHCare for five million bottles of children’s acetaminophen and ibuprofen manufactured in Turkey. But Heath Canada limited how much medication MHCare could import and the company delivered only 30 per cent of the provincial health authority’s order. Alberta Health Services and MHCare then signed a subsequent deal for intravenous acetaminophen, under which the health authority paid the company the balance of the original contract.
By July, 2023, Alberta Health Services had paid MHCare $49-million for drugs that have yet to be delivered.
Prior to Wednesday, Ms. Smith has defended the intravenous acetaminophen deal as a way for Alberta Health Services to recoup value while also procuring a drug she argued could replace some opioids in hospitals.
Mickey Amery, Alberta’s Justice Minister, said he believes the health authority is in talks with MHCare to recover some of the money.
“I think that they’re engaged in mediation,” he told reporters Wednesday.
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Matt Jones, the Minister for Hospitals and Surgical Health Services, in the legislature on Tuesday said the health authority is pursuing ways to get cash back.
“They’re going through a process through contract tools, arbitration and ultimately are evaluating legal options to recover the $49-million.”
Alberta Health Services declined to comment on whether it is pursuing reimbursement through mediation, arbitration or other legal avenues.
Meanwhile, Health Canada is still processing MHCare’s application to import intravenous acetaminophen. MHCare’s lawyer noted that the company has no control over the timing.
“MHCare is in active communication with Health Canada,” Mr. Hutchison said. “Regulatory approvals can be frustratingly long but are beyond our control.”
The import deal for children’s painkillers and the subsequent agreement for intravenous acetaminophen came under renewed scrutiny last year when Alberta Health Services’s former chief executive, Athana Mentzelopoulos, in court documents alleged that government officials interfered in the health agency’s procurement processes. She alleges that Ms. Smith’s government fired her in early 2025 for investigating potential conflicts of interest, inflated contracts benefiting private companies and MHCare’s deals with the organization.
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The government denies the allegations and argues that it fired her for incompetence. None of the allegations have been tested in court. MHCare and its owner, Sam Mraiche, have denied any wrongdoing and are not party to Ms. Mentzelopoulos’s $1.7-million wrongful-dismissal lawsuit.
RCMP last week searched MHCare’s offices in Edmonton as part of their year-long investigation into allegations of procurement irregularities in Alberta’s health care system. The Mounties also searched an accounting business belonging to Sam Jaber, who in 2022 was listed as MHCare’s chief financial officer, according to documents obtained by The Globe.
Alberta Auditor-General Doug Wylie is conducting a separate probe, which will be completed by his successor. Mr. Wylie’s term wraps up at the end of April, and the governing United Conservative Party rejected his offer to stay on for two years to finish the investigation.
On Wednesday, an Alberta Legislature committee voted to recommend that Ms. Smith’s cabinet appoint Phillip Peters as the province’s next auditor-general.
Mr. Peters is the general counsel and ethics officer in the agency, and he previously worked for the Justice Ministry as a tax lawyer.
NDP Leader Naheed Nenshi told reporters he trusts that the new auditor-general will follow up on the health care contracting investigation and that he “will not let that get shelved.”
The auditor-general is an independent officer of the legislature responsible for auditing the books of every government ministry, department, regulated fund and agency.
A spokeswoman for Mr. Wylie last week told The Globe that the investigation was taking longer than anticipated “due to the ongoing receipt of relevant documentation and the availability of key interviewees.”
Cheryl Schneider also said that Mr. Wylie expects his “document review and interviews will be complete, and findings determined” before he leaves on April 28.
With reports from The Canadian Press