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How brokers make you pay more for drugs

The high cost of medicines in Kenya is mainly caused by shadowy middlemen and conniving civil servants

For example, a tablet procured at Sh10 from a local manufacturer is reaching a patient in a public hospital at almost Sh30.

The same tablet will reach a patient at a faith-based facility at about Sh45 and higher in private pharmacies. The price of imported drugs, a new survey on the cost of medicines in six counties shows, is much higher.

The study shows that the mark-up, or money paid to middlemen and brokers by county and procurement officials, has dangerously inflated cost of medicine in Kenya.

The survey shows mark-ups to range between 177 per cent and 343 per cent in public and mission facilities, respectively. This is against the official rate of 18 per cent in such facilities.

The World Health Organisation (WHO) recommends that where patients have to pay for medicines, government procurement prices are passed onto them at little or no additional costs.

The study found that both the public and mission sectors pay less for locally produced medicines, compared to imports, and then charge higher percentage mark-ups.

“The result is that patients are not benefiting from the lower procurement prices of locally made products,” says the survey.

“If we want to lower the prices of the drugs, the government needs to buy the drugs directly from the manufacturers and not agents as it is done now,” says Dr Khama Rogo, the Head of the World Bank’s Health in Africa Initiative.

Last month, Health Cabinet Secretary Sicily Kariuki said the government is working on a mechanism to regulate the price of essential medicines.

The new survey shows Nairobi is paying the highest price for medicines, almost double the cost in Kisumu though the products pass through or originate from the capital city.

The survey published in July for the German development agency, GIZ, shows inflated drug prices in all type of facilities, including public, private pharmacies and faith-based institutions.

The survey by Margret Ewen of Health Action International, Netherlands, and Dorothy Juma Okemo, a consultant from Nairobi, covered Kajiado, Nairobi, Nakuru, Vihiga, Kwale and Kisumu counties.

Mark-ups for brokers

The team, which was also testing a new medicines price assessment methodology for the WHO, had collected data for 31 medicines. It had covered 30 public hospitals and health centres, 30 private pharmacies, and 22 mission outlets across the six counties.

The report identified two major causes of high cost of medicines; the high mark-ups for brokers and high cost of imported medicines. The authors also tell of difficulties in getting cooperation from civil servants on the issue of cost and registered drugs in Kenya.

For example, they report to have sent a list of the drugs found in the survey to the Pharmacy and Poisons Board (PPB) for a check on their registration status.

“No response has been received from PPB, despite direction by the Chief Pharmacist to his officers to check the registration status,” they write in the final report.

For the sake of transparency, the authors say the PPB as is the norm elsewhere should publish on its website an updated list of registered products in the country.

Despite inflated prices in public hospitals, recent reports show the supplier -- the Kenya Medical Supplies Authority (Kemsa) -- is in many cases not being paid. By the end of June, counties owed Kemsa Sh2.3 billion, with Nairobi having the highest debt at Sh235 million, followed by Narok at Sh104 million.

Consequently, Kemsa had cut supplies to hospitals in Nairobi, Homa Bay, Kisii and Nyamira counties for unpaid bills. Such an act by Kemsa, the new report says, pushes patients either to drop treatment or go for more expensive medicines in private pharmacies.

In the private retail pharmacies, prices were much higher than either in the public or faith-based institutions.

For example, one deworming tablet of the drug albendazole cost Sh10 in the public sector, Sh27 in the mission facilities but Sh50 in the private pharmacies if from local manufacturer, but Sh75 if imported.

On average, the survey shows, patients were paying 48 per cent more for imported products than for locally manufactured medicines. Local products were also significantly more available than imported medicines.

Approximately 55 per cent of the products found in the six counties were made in Kenya mainly by Dawa Limited, Laboratory & Allied, and Cosmos Pharmaceutical Limited.

The largest number of imported products was from India at 30 per cent, China, 6.6 per cent and South Africa at four per cent.

www.rocketscience.co.ke

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