Kenya: State, Firms in Vaccine Pricing War

25 February 2021

Private pharmaceutical companies have termed the partnership offered by the government to procure and distribute Covid-19 vaccines at a cost as dicey.

Should the government opt to partner with the private sector to improve vaccine accessibility, controlling the price of the vaccines would be impossible, said the chairpersons of the Pharmaceutical Society of Kenya (PSK) and the Kenya Pharmaceutical Distributors Association (KPDA).

This partnership could be detrimental to the public, since Kenyans with buying power would get vaccinated before the poor and those at risk of contracting the disease.

"Someone has to meet the cost of shipment, storage, and distribution. This cost will eventually be marked up in the price that the consumer pays for that vaccine," said Mr Louis Machogu, the president of PSK, adding that the government was setting an unrealistic plan.

The Health ministry has alluded to an alliance with the private sector to import coronavirus vaccines. According to the ministry, discussions are under way with the Pharmacy and Poisons Board (PPB) to issue the companies a conditional market authorisation, in a bid to bridge the gap of access and increase the country's number of vaccines.

The public-private partnership will see an estimated 12,240 health facilities (spread out in three phases) used for vaccine delivery. In the first phase, the doses will be available in 479 hospitals (284 public and 195 private); in the second phase, 3,884 (1,302 public and 2,582 private), and in the third phase, 7,877 (4,338 public and 3,539 private) will be able to administer vaccines.

These facilities as per the government plan are to offer the shots free of charge, with private hospitals only allowed to charge an administration fee of Sh200.

Kenya does not have a pricing policy, meaning traders operate in a free market. In 2011 then-President Mwai Kibaki endorsed the Price Control Act, 2010, allowing Kenya to return to price controls, which gives the government powers to determine the price of essential commodities such as food and medicine after the practice was abandoned in the 1990s in favour of economic liberalisation.

Last year, Agriculture Cabinet Secretary Peter Munya warned the government could invoke the policy to protect consumers from rogue traders, after Covid-19 infections were first noted in the country.

Like many businesses, pharmaceutical companies' interaction with the State is usually restricted to seeking a licence and periodic inspection.

"The best they [MoH] can do is put a cap on pricing but what they are talking about is just wishful thinking that prevents access," added Dr Machogu.

Dr Kamamia Murichu, chairman of KPDA, has questioned where the private sector will buy the vaccines: "These vaccines are heavily guarded that right now you would rather be arrested with heroin than a Covid vaccine. I wonder where private pharma will buy the doses from."

Besides variation in cost and unavailability of the doses, he cited the potential insecurity of the doses if the private sector is allowed to bring them in.

"Imagine if every importer was allowed to bring in their own shipment with varied efficacy. How will you control that market? For now, it's better to leave it to the government. We cannot afford to play around with these vaccines," Dr Murichu opined.

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