Kenya bought Covid-19 supplies at grossly inflated prices, handing billions of shillings in quick profits to a few individuals.
The Kenya Medical Supplies Authority (Kemsa) is on the spot after it procured the N95 (1860) masks at Sh1,300 against the market price of Sh700 apiece.
The agency paid Sh700 for the KN95 mask that goes for 450 on the higher side. The agency ordered 1,836,400 of these.
The prices should be lower considering that the agency is procuring in bulk for many counties.
The disposable 3-ply surgical masks were procured at Sh90 per piece against the market price of Sh50 when bought in bulk.
A check on some of the suppliers, including Mission for Essential Drugs and Supplies revealed that the KN95 masks sell at Sh250.
Kemsa Chief Executive Officer Jonah Manjari appeared before the Senate Health Committee last month after members requested to know why he was procuring the personal protective equipment at Sh9,000 when the kits were going for Sh4,500 on the market.
Dr Manjari said Kemsa was buying quality items, unlike the ones being sold on the market.
The agency is getting into a new framework contract for three years that is likely to lower the prices.
"With the bulk purchasing, the pricing is likely to change and now that the agency is planning to procure some items from the local manufacturers, this will reduce on warehousing cost and delivering time," said Dr Manjari.
He said the prices were high because the agency also had to pay operational costs, including the cost entailed in running the agency, as there had been progressive reduction of exchequer.
A study by the Ministry of Health and World Health Organisation done last year revealed that some drugs in Kenya were being sold for double the international prices, or even higher.
Kenya's lack of a local market reference index greatly hinders affordability of drugs by many Kenyans.
Kenya has never had a mechanism to regulate the pricing of medical and basic commodities in the market. This has made it easy for entities to sell drugs at any price.
Another survey on medicine prices in Kenya, conducted in public and private hospitals, noted that the high cost and shortages of a few specific drugs in the country were major problems.
The survey was done in 53 public health facilities, 57 private sector outlets and 47 mission/NGO health facilities.
The findings showed that drug prices in public health institutions were 20 per cent lower than in facilities operated by NGOs, and 30 per cent lower than in private facilities.
"In the private sector, the prices patients are charged for medicines varied from facility to facility. In some cases, the prices varied by many multiples, while in the NGO facilities, patients are charged at least five times the published international prices for the lowest priced drugs," the survey noted.
Another report by the Ethics and Anti-Corruption Commission (EACC) also revealed how counties greatly marked up the prices of drugs supplied by Kemsa.
"The EACC report exposed systemic weaknesses and opportunities in the procurement and dispensing of pharmaceutical and non-pharmaceutical supplies in the public sector, which denies most Kenyans access to quality, affordable medical products; and that's why we had to move with speed to develop the pricing index," says the report.
The difference in drug pricing last year forced Kemsa to reduce its market price by eight per cent after an assessment in the market, which revealed that the agency's prices ranged between 40 and 100 per cent. The Pharmacy and Poisons Board CEO Fred Siyoi said the government might be forced to enact a law capping drug prices.
The House Committee on Health had approved Sh1.5 billion allocation to Kemsa for the procurement of testing kits and masks when it approved the Third Supplementary Appropriations Bill 2020, to regularise the expenditure Sh18.26 from the Consolidated Fund for the 2019/20 financial year.
Last week, the Senate Health Committee threatened to invoke Chapter 19 of the Parliamentary Privilege Act, which imposes fines and sanctions to the drugs agency when its management failed to provide all the relevant documents in relations to a number of procurement irregularities that have recently been witnessed in the agency.
The committee wrote to the agency requesting documents after it learnt of various allegations of procurement irregularities at the agency for the financial years from 2017/2018 to 2019/2020.
"The Committee has further taken note of numerous concerns raised by County Governments and health workers' unions regarding the quality and cost of goods supplied by KEMSA in relation to the Covid-19 pandemic, particularly Personal Protective Equipment (PPEs)," the letter read in part.