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The war over government hospital drug purchases escalated yesterday into character assassination, with the Health Ministry's response to the decision by Finance Ministry Accountant General Yaron Zelekha to end drug-purchasing company Sarel's virtual monopoly in the area.

Last week, Zelekha informed the Health Ministry and the four largest government hospitals that he was canceling Sarel's tender exemption, which enabled it to sell about NIS 700 million annually to state hospitals without submitting bids.

Yesterday, the Health Ministry accused Zelekha of rushing to withdraw Sarel's exemption without waiting for the conclusions of the joint health and finance ministry committee, appointed several months ago to study the issue.

The ministry even accused Zelekha of being personally responsible for the failure to oversee Sarel, since for three years the accountant general has not appointed a treasury representative to Sarel's board of directors. Health Minister Ya'akov Ben Yizri relayed these charges personally to Finance Minister Abraham Hirchson.

"The Ministry of Health benefits from total transparency [on the part of Sarel - M.A.] and always received all the reports it requested," Health Ministry media adviser Tal Harel said yesterday. "Responsibility for financial oversight belonged to the account-general of the Health Ministry, the positions of whom changed in accordance with personnel changes at the treasury. About three years ago the [Finance Ministry] accountant-general decided not to appoint a treasury representative to the Sarel directorate so that he could initiate legal action to change the structure of Sarel," Harel said.

Harel added that the joint committee was expected to complete its work within six months to a year, and it would be appropriate to postpone making decisions about issue until then.

The Finance Ministry claims that Sarel is inefficient and charges too much. In addition, it claims that supervising the company is made difficult by its unusual corporate structure.