The Constitution of Kenya enshrines the basic right to health and healthcare. The Ministry of Health’s Kenya Essential Drugs List sets out the importance of ensuring essential medicines are valued at the lowest price for universal access. This commitment is currently threatened by corruption in pharmaceutical procurement.
The Public Procurement and Asset Disposal Act (2015) governs all procurement in all state organs and public entities in Kenya. It states that standard goods, services and works with known market prices shall be procured at the prevailing real market price. The law provides that “The Authority shall issue a quarterly Market Price Index as a reference guide to assist accounting officers make informed price decisions.”
The Market Prices Index (MPI) is a central pillar of the Government procurement system. It gives price guidelines for over 600 goods and equipment for education, agriculture, public offices and infrastructure among other sectors.
It is managed by the Public Procurement Oversight Authority (PPOA) and is publicly available on its website. All purchases in conformity with the MPI cannot therefore be sanctioned or punished. The quality and accuracy of the MPI is thus critical in eradicating corruption.
The Society for International Development (SID), Transparency International-Kenya (TI-Kenya) and the Kenya Ethical and Legal Issues Network (KELIN) sought to establish the accuracy of the MPI in comparison with local and international market prices, and to investigate the potential causes for its inaccuracies and inconsistencies. The findings of this study are published in a policy brief titled ‘Sealing Corruption Loopholes in Kenya’s Health Procurement System’. At the time of its publication on April 2016, the last available MPI on the PPOA website was dated June 2015.
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The PPOA does not mention the authors of the MPI. The website merely states that the MPI is developed by “renowned researchers engaged by PPOA”. Given the sensitivity of the Index, one would expect it to be accompanied by a detailed methodological note and schedule of engagement, and its source.
In addition, and perhaps this explains the anonymous nature of the Index, the MPI has major and unexplainable fluctuations in the cost of essential medicines and equipment.
We found bizarre anomalies between the costs of medical drugs and equipment in Kisumu, Mombasa and Nairobi. In the sampling under review, the costs in Kisumu or Mombasa were up to 500 percent higher, even though most of the equipment was imported through Mombasa.
A delivery bed for instance, costs Sh39,357 in Nairobi, Sh49,000 in Mombasa and Sh114,500 in Kisumu. Ciproflaxin (original) was priced at Sh635 in Nairobi, Sh2,026 in Mombasa and Sh975 in Kisumu.
Inflated prices for medical drugs and other supplies further drive up the cost of healthcare, alienating a majority of Kenyans from accessing basic health services.
Certain actions must be undertaken to put our procurement system on the recovery track. The Ministry of Health should institute its own review of the implications of the MPI, and develop and implement a medicines’ pricing policy for greater transparency, regulation and uniformity in pharmaceutical pricing.
PPOA should overhaul the Market Prices Index and publish the names and backgrounds of the anonymous “renowned researchers’, their selection process and period engaged to produce the Index.
The Office of the President should undertake a review of its ministries and parastatals to surcharge public procurement officers and other officials who may have facilitated significant losses through the purchase of inflated goods and services.
The national and county governments, Kenyatta National Hospital, Moi Teaching and Referral Hospital and all Level Five hospitals must publish all health-related procurement contracts for the financial year 2014/2015 on their websites and in the media for public scrutiny.
The Ethics and Anti-Corruption Commission, Directorate of Criminal Investigations and the Asset Recovery Agency should review and institute proceedings against those found culpable of using the MPI to inflate price procurement. The agencies should recover money from companies that supplied above price reference lists through collusion with public officials.
The public pays the ultimate price for corruption in the health sector – death.
The best cure is Kenyans coming together to keep the costs of essential medicines and equipment as low as possible by scrutinising health procurement, and demanding transparency and uniformity in pricing.
