Govt K12 billion debt threatens drug supply

Failure by public hospitals to settle a debt of about K12 billion with Central Medical Stores Trust (CMST) is threatening the trust’s capacity to pay suppliers about K11.9 billion it owes them.

The development risks worsening drug shortage in health facilities as some patients are being asked to buy own drugs at the time some pharmaceutical companies have threatened that they will not supply more drugs until they receive money which the trust owes them.

In one of the presentations, the trust appealed for timely funding to enable them to pay suppliers so as to maintain enough stock.

The K11.9 billion debt has been outstanding since last August, when government paid about K4 billion, out of the initial debt of K16.6 billion, dating back to 2011.

Speaking on condition of anonymity, a local pharmaceutical company director said they are struggling to run their business due to unsettled debts by the trust.

In an interview with Nation on Sunday, president for the association of local pharmaceutical companies, Chokani Mhango, confirmed that local suppliers have decided to stop supplying to CMST, until the money is paid.

“We cannot supply some more if they do not give us our money,” he said.

CMST in 2015 stopped the ‘supply-on-credit’ arrangement to avoid the risk of accumulating arrears, largely due to delayed disbursement of funds from Treasury to respective institutions which manage the drug budget.

Asked on how they intend to handle the situation following threats from pharmaceutical companies, CMST spokesperson Herbert Chandilanga told Nation on Sunday that they are always in constant and progressive communication with both their creditors and debtors on how best to resolve situations without disadvantaging public health service.

While in an e-mail response, Chandilanga could not indicate why CMST continues to supply on credit against their own stop order in 2015, chief executive officer Feston Kaupa is on record as telling a parliamentary committee, late last year, that they do so to avoid jeopardising service delivery in public hospitals.

But, in an interview this week, Treasury spokesperson David Sado said there is a process that has to be followed for Treasury to settle outstanding debts.

According to Sado, the debt has to be assessed and certified by the National Audit Office, and the contracts properly scrutinised and certified by the Attorney General.

However, in a later interview, Secretary to Treasury Ben Botolo said government is working on clearing the debt as soon as possible and that by next week some funds will be made available.

On why government has not honoured payment for a long time, Botolo blamed CMST for entering into contracts without Treasury’s knowledge, a claim CMST denies, arguing that no transaction is done without notifying relevant authorities.

According to information sourced from both Kamuzu central and Queen Elizabeth central hospitals, they are only getting less than half of what they demand from the trust.

KCH hospital director Jonathan Ngoma, said the situation is a result of Treasury denying hospitals an opportunity to manage their drug budgets.

The drug budget for 2017/18 catering for four central hospitals is K8 billion.

Ngoma said sometimes they have cases where the hospital has no treatment yet the same is available on the market.

“Funny enough, we are asked to make orders to Central Medical Stores [Trust] and someone somewhere, who does not even have an idea of our daily priorities, is managing our drug budget.

“It would be easier if we managed our drug budget and deal with Central Medical Stores, accordingly. The accrued arrears would not be an issue. Sometimes we are told that we have depleted our budget even when we do not know the actual expenditure,” he said.

According to him, both KCH and Queens still have enough essential drugs such as anti-malarials and ARVs from donors as well as other stocks.

A pharmacist at Queens, Taona Yakobe, shared frustrations with the current arrangement of managing the drug budget.

“What is irritating is that we cannot provide treatment to some patients because we do not have it in stock, yet the same is available on the market. There are times management has sacrificed some funds to save the situation at the expense of other operations. But for how long can we do that?” he asked while indicating that it has become almost a tradition to ask patients to buy drugs.

Random interviews with patients at KCH and Bwaila Hospital in Lilongwe confirmed incidents of patients buying drugs.

A woman, who claimed to been referred to KCH from Salima, said she has been asked to buy some of the medicines because the hospital told her they do not have them in stock.

At Bwaila last Thursday, Nation on Sunday met Ezekiel Mwale, who had also been asked to buy a cough syrup.

“They just diagnosed me and gave me this medicine [Bactrim] and told me to buy the rest they have written in this book [health passport],” he said sounding frustrated.

Ministry of Health spokesperson Joshua Malango said each hospital manages its own drug budget, they encourage formation of drug and therapeutics committees to oversee drug procurement and utilisation.

“It is true that some hospitals, especially central hospitals, do not get all their required drugs despite money being available on their respective drug budget lines at CMST. The reason is that for central hospitals, the more diverse specialists we have, the wider the needs.

“In attempt to overcome that, in July 2017 CMST organised separate meetings— one with district hospitals and another with central hospitals—to look at their what we call ‘Must have list’, which will now guide the procurement of commonly used and life-saving drugs by CMST to supply the facilities.

“Again, there is a discussion on how we can facilitate procurement of drugs that are not available at CMST, but available in other private pharmacies for facilities to buy,” he said.

Malango added that CMST shares monthly drug draw downs for all facilities in the country, which the Ministry of Health and National Local Government Finance monitor.

He said it should be noted that disease burden in Malawi generally increases in the rainy season—with diarrheoa, malaria etc.,–and the drug requirements generally increase during such times.

Malawi Health Equity Network (Mhen) has since appealed to Treasury to settle the bills and allow CMST function effectively.

The network’s executive director George Jobe said there is need to improve the capacity of hospitals.

“There is drug theft when funds are managed by hospitals and that’s undeniable, but we need to put in place strict systems to allow hospitals to manage the drug budget to avoid situations where hospitals overspend on their budgets because someone is controlling it elsewhere,” he said.