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DEPARTMENT OF HEALTH v. PHIL. PHARMAWEALTH

FACTS:

Phil. Pharmawealth, Inc. (respondent) is engaged in the business of manufacturing and supplying pharmaceutical products to government hospitals in the Philippines. On December 22, 1998, then Secretary of Health Alberto G. Romualdez, Jr. issued Administrative Order (A.O.) No. 27, Series of 1998, outlining the guidelines and procedures on the accreditation of government suppliers for pharmaceutical products. A.O. No. 27 was later amended by A.O. No. 10, Series of 2000, providing for additional guidelines for accreditation of drug suppliers. Respondent submitted a request for the inclusion of additional items in its list of accredited drug products, including "Penicillin G Benzathine." Petitioner Department of Health (DOH) subsequently issued an Invitation for Bids (IFB) for the procurement of Penicillin G Benzathine. Despite the lack of response from DOH regarding respondent's request for inclusion, respondent submitted its bid for the IFB. The contract was eventually awarded to another company and respondent filed a complaint seeking to nullify the award and claiming damages. Petitioners argued for the dismissal of the complaint, asserting state immunity and lack of merit. The trial court denied the motion to dismiss, which was affirmed by the Court of Appeals.

ISSUES:

  1. Whether or not the doctrine of state immunity applies to the present case.

  2. Whether or not the individual petitioners can be held liable for damages.

RULING:

  1. The Court of Appeals affirmed the trial court's denial of petitioners' motion to dismiss, which means that the doctrine of state immunity does not apply to the present case.

  2. The Court of Appeals did not explicitly address the issue of whether or not the individual petitioners can be held liable for damages.

PRINCIPLES:

  • Doctrine of State Immunity - The doctrine of state immunity provides that the State cannot be sued without its consent. However, this doctrine does not apply when the suit is against individual government officials in their personal capacity.

  • Liability of Government Agencies - Government agencies, such as the Department of Health, have the discretion to accept or reject any or all bids without incurring liability to the bidders.

  • Authorization to File Complaint - In order for a complaint to be valid, the representative filing the complaint must be duly authorized by the board of directors of the company.