Counties' debt to the Kenya Medical Supplies Authority (Kemsa) stands at about Sh2.3 billion.
Nairobi County has the highest debt at Sh235 million, followed by Narok with Sh104 million. The amount owed is for drugs and other medical supplies.
Kemsa Chief Executive Officer Jonah Mwangi said they have been in talks with counties, which have shown willingness to pay. The agency has come up with an instalment plan for each county.
Dr Mwangi said Nairobi County paid Sh52 million last week and has made a commitment to pay Sh30 million monthly. "Some counties have committed to settling the amounts once they receive money from the Treasury," he said.
Nairobi County Health minister Hitan Majevdia said they would ensure that they clear the debt. "The balance has been provided for in the next budget and we are not ready.
We are awaiting approval from the National Treasury. We are going to pay in bits since we have other sectors to take care of as well," said Mr Majevdia.
However, Dr Mwangi cautioned that if the counties do not settle the debts on time, it will affect operations and cause a drug shortage. "We also procure once they pay, but if they do not pay from where will we get the money to buy more drugs? I would encourage counties to ring-fence their commodities budgets to ensure timely payments to Kemsa," he said.
Kemsa has an agreement with counties that requires the devolved governments to make payments within 45 days after delivery. He said they normally suspend the accounts of those not in good books with the agency.
Kitui, Mandera, Makueni, Nyandarua, Embu and Laikipia have been listed as the best paying counties.
"We have seen a positive trend from these counties. They are procuring more commodities than any other county. We shall sustain relations with the counties for the success of the universal health coverage plan ," Dr Mwangi told Nation on Tuesday.
Council of Governors Health Committee Chairman Mohammed Kuti attributed delayed payment of suppliers to the late disbursement of money from the Treasury.
"Money from the Treasury is supposed to be coming every month, so that we are able to take care of our suppliers, salaries, and other costs. But in the first six months of the financial year, very little came from the Treasury," said Dr Kuti.