Medical Stores loses billions as malaria drugs run out

Cyprian Musoke | 20 Aug 2010
New Vision
While the National Medical Stores (NMS) cannot supply enough malaria drugs to meet the needs of Ugandans, it spends billions of shillings importing huge quantities of less needed drugs which end up expiring, the Auditor General's investigation has revealed.

According to a report on the financial year ended June 30, 2009, NMS stocked Ranitidine, an ulcers drug, to last 27 years. Since medicines have a shelf life of 2-4 years, most of the Ranitidine will expire before it is used.

The report squarely blames NMS for using flawed methods of estimating medicine needs.

As a result, it under-stocks the most needed drugs and over-stocks less needed ones.

Consequently, drugs worth billions of shillings expire in stores. Moreover, the Government has to spend more billions destroying the expired drugs instead of using the money to buy much-needed medication to save lives.

Drugs worth sh6.7b expired between July 2005 and June 2008 in NMS alone. At the same time NMS could not supply all drugs ordered by health units.

"A monthly storage cost of sh36m was wasted on expired drugs and their subsequent destruction cost of about sh700m could have been channelled to other priority activities badly needed by the citizens, such as the recruitment of additional medical personnel in health centres," it says.

The report adds: "There has been a general countrywide concern about people dying of treatable diseases such as malaria, arising from patient's failure to access drugs in public health facilities, and yet drugs worth billions of shillings were reported expired in NMS facilities, stores of referral hospitals and health units."

NMS, it adds, is responsible for ensuring the continuous distribution of pharmaceutical products in a financially viable and sustainable manner.

"However, the audit observed that in a number of cases, NMS could not supply drugs and medical supplies to meet the orders placed by the public health units.

The information analysed from NMS' sales in respect of key anti-malarial drugs that are expected to be availed at all times in stores, revealed that less than half the orders were honoured by NMS," it states.

On average, it notes, NMS' capacity to supply anti-malarial drugs from their own stocks during the period was 40%, while third party supplies were at 77%.

"It is worth noting that malaria is the most common sickness reported on a daily basis at all levels of health centres in Uganda," the report says.

It further noted that NMS supplies a range of drugs to health centres that have not requested for them to compensate for the value of drugs that could not be supplied.

"18% of the 1,281 drug items supplied between 2005 and 2008 fall in this category. This action only served NMS financial management concerns but did not address the needs of the health centres," the report notes.

"The result is perpetual stock deficiency at health centres which significantly affects the rural poor people who depend on government health units. As a result they do not obtain appropriate treatment for life threatening common diseases.

During a site visit to Bukuku health centre in Kabarole on 19th September, 2008, we witnessed cases where patients had to go home without treatment for malaria," the report details.

By law, NMS is supposed to be the only supplier of medicines to government hospitals and dispensaries.

The health facilities are allowed to buy a drug from other sources if NMS provides a certificate of non-availability, confirming that they do not have it.

However, it is easy to go through the eye of a needle than to get that document. "The audit did not see any case of issued certificate in all the 14 health units visited during the survey.

The NMS operates a system that automatically generates the certificates and they are dispatched by post, if not collected. These certificates, however, either do not reach the health centres or are withheld by district health officers," the report adds.

The six copies out of the 14 non-availability certificates availed by NMS were printed fresh from the system and not the required file copies of those dispatched, the report said.

It attributes this situation to the failure by NMS to appreciate the implication of the certificates, reluctance to provide evidence that may point to NMS ineffectiveness, lack of clarity on the procedure and drug supply chain.

Failure to get this certificate, sometimes forces districts to break the law and buy drugs from other sources. "As a result, additional avoidable costs are incurred in form of transport from health units to alternative private pharmacies, which do not have delivery services.

It also leads to re-channelling of funds meant for drug purchase to meet the additional operational costs.

Consequently, funds for drug purchase are reduced, which escalates shortages in health centres."

The report also observed that NMS takes unnecessarily long to deliver the medicines.

On average, it takes one month from the time a drug is ordered for, yet with private suppliers such as Joint Medical Stores (JMS), it takes two days.

Some drugs are also believed to have disappeared along the transportation chain.

"There were 110 orders dispatched from NMS in 2008 but evidence of the drugs reaching the health centres was not availed, indicating that those drugs may not have reached intended destinations."

It says NMS does not have a clear policy on the standard time it should take to process an order from receipt to delivery at districts.

The effect, the report noted, was the loss of key customers to private pharmacies and providers like JMS, leading to loss of revenue of over sh40b in the period under review.

Flawed procurement plan

The procurement plan is expected to enable NMS stock drugs according to demand.

"The audit team established from the procurement data of three financial years that NMS prepared procurement plans based on unreliable data, which they did not even comply with.

They hoped to rely on procurement plans of health units which were not forthcoming," the report noted.

The report also blamed the problem on conflict in assignment between NMS and the national drug authority (NDA), failure by NMS to maintain accurate data for decision making and unpredictable prescription patterns by medical practitioners.

"The effect of these performance gaps is perennial stock-outs and excess stocking of some drugs which are slow moving. NMS is required to maintain a buffer stock to last at least four months of sales demand to avoid stock outs," the report says.

Generally, the report notes, an average of 56% of all the stock categories fell below the four months buffer stock during the eight months period between 2008 and 2009.

The shortages were a result of failure by NMS to comply with the stores operational and management manual, which requires them to use spelt out scientific methods of ordering drugs and medical supplies.

This problem, it noted, stems from high staff turnover, which is not accompanied by speedy review of management tools in line with the current management thinking and practice, as well as inadequate planning.

"The country is left vulnerable and unprepared to handle emergency drug requirement situations such as accidents or outbreaks of disease."

In August 2007, the report notes, 96% of the health centres reported stock out of anti-malarial medicine.

"Comparatively, the malarial death rose from 4,252 in 2006 to 7,003 in 2007 and dropped to 4, 211 in 2008, implying there were 2, 750 more malarial deaths during 2007, 68% above the usual," the report says.

Coordination between NMS and third parties

In addition to distribution of its own drugs, the report noted, NMS also stores and distributes drugs on behalf of the Global Fund, Centre for Disease Control, USAID malaria Control Project, UNFPA, Ministry of Health and TB projects.

"Despite serving common customers, the memoranda of understanding signed by these parties lack a joint procurement plan aimed at satisfying customers to avoid over supply.

Lack of coordination leads to the third parties delivering items that have been stocked by NMS, creating duplication," it says.

The effect, the report notes, is that NMS stocks similar drugs to those later delivered by the third parties, instead of the ones in short supply.

The excess drugs delivered are prone to expiry yet people are dying in the countryside of treatable diseases.

"There is also wastage of financial resources in the storage and destruction costs. An effort to coordinate procurement with third parties has been advocated by the NMS but the health ministry only promises to take it up."

Handling of expired drugs

The NMS policy is that only stocks that have at least three or more months of remaining shelf life shall be issued out for sale to customers.

"However, a review of the expired drugs records showed that 46% of the expired drugs were delivered to them by NMS," it says.

The expiry, they add, was as a result of excess stocking of slow moving drugs procured by multiple sources.

Storage of expired drugs

The storage of expired drugs was sometimes in the open space like in Kabarole district health office or not segregated from active medicines, without a programme of evacuation or destruction, leading to environmental consequences or them falling into the hands of wrongdoers who could recycle and repackage them.

Indeed NDA has impounded some of these drugs in eastern Uganda outlets.