Health facilities debts frustrate pharma firms

Pharmaceutical companies have threatened to revert to the cash-and-carry system or stop supplies to their local clients from next month as they are unable to recoup debts of up to a year’s supplies.

The Chamber of Pharmacy Ghana (COPG) the umbrella body for five pharmaceutical industry groupings and the Pharmaceutical Manufacturers Association of Ghana (PMAG) indicated that health facilities across the country had failed to settle their debts, insisting that they were yet to be reimbursed by the National Health Insurance Authority (NHIA).

However, in a statement last Thursday June 18, 2020, the NHIA said it had released at least GH¢87 million to service providers to enable them to pay for old pharmaceutical supplies and non-drug consumables.

"Management strongly urges healthcare facilities funded by the NHIA to promptly settle their debts to the pharmaceutical companies to avoid any disruptions in the medicine supply chain," the NHIA said in its statement.

Old debts

According to the Chief Executive Officer of the COPG, Mr Anthony Ameka, the debts, some dating back to 2017, were now threatening the survival of local pharmaceutical businesses.

Mr Ameka said: “Those who import and distribute, and the local manufacturers are the worst affected”.

He said the intent by the pharmaceutical companies to review business relations with the regional medical stores and service providers funded by the National NHIA from July 1, 2020 had been reinforced by the claims by the health service providers that they had still not been reimbursed by the NHIA.

Mr Ameka emphasised that COVID-19 conditions had changed the dynamics of international trade, saying Ghanaian pharmaceutical companies were now required to buy active pharmaceutical ingredients and other finished pharmaceutical products on a cash-and-carry basis instead of the previous credit arrangement.

“It means the companies have had to borrow at very high interest rates to buy active pharmaceutical ingredients only to sell on credit basis that never gets paid,” he stated.

Recapitalisation

He said their checks had revealed that some of the health institutions, including regional medical stores, had applied to the state for recapitalisation because they were no longer capable of servicing the size of debt they had accrued over the years.

The COPG, he added, could be forced to publish the list of debtors and other details in the coming days if the situation did not change.

The Executive Secretary of the PMAG, Ms Lucia Addae, corroborated the COPG’s claims, stressing that service providers in the regions had denied receiving any payments from the NHIA recently.

"When we talk to (the health facilities in) the regions, the story is totally different. Volta, Upper East, Upper West, North East, Savanna, Northern; according to them there is nothing," Ms Addae told the Daily Graphic.

"In effect, we are asking for a more transparent system where we can know which facilities have been paid so we can access our money from them," she added.

"Ideally, the Ghana Health Service (GHS) which is the body that has a contract with the NHIA should be ensuring that the health institutions that they have supervisory responsibility over pay their suppliers."