Kenya Facing Shortage of Antiretroviral Drugs Caused By Disagreement Between the Government and USAID On Procurement Entity

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People living with HIV in Kenya are worried about the dwindling supplies of antiretroviral drugs (ARVs) in the country. This has been brought about by a shortage in the availability of ARVs in health facilities following the United States Agency for International Development (USAID) halting their supply through the Kenya Medical Supplies Authority (KEMSA). USAID has cited allegations of corruption and mismanagement at KEMSA as the reason for choosing not to use the organization anymore.

KEMSA is a government institution with the mandate to procure, warehouse, and distribute drugs and medical supplies in Kenya. It does so for both government and donor-funded health commodities, including those financed by the Global Fund and USAID. KEMSA has a robust distribution network which enables it to supply health commodities to all 47 counties in Kenya. According to a United Nations Children's Fund (UNICEF) case study of Kenya, the authority distributes medical commodities to over 6,000 health facilities and 5,047 HIV/AIDS testing sites (see GFO September 2018 on how KEMSA successfully procure and distribute health commodities). KEMSA is an African success story on a continent where many countries have to use the Global Fund's pooled procurement mechanism (PPM) to procure and distribute Global Fund-supported health products.

Disagreement between a donor and government on who to distribute ARVs

USAID, on behalf of the United States (US) government, signed a five-year contract with KEMSA on 9 November 2015. The contract, which required KEMSA to procure, warehouse, and distribute HIV, malaria, and family planning commodities on USAID's behalf, ended in 2020. Rather than extending the contract with KEMSA, USAID opted to use Chemonics International, a US-based global development firm that is increasingly used by the Global Fund as a preferred technical assistance and logistics provider in 12 countries, to procure and distribute these commodities.

While addressing the Senate Health Committee, the Health Cabinet Secretary indicated that USAID had "trust issues" with KEMSA. Indeed, on 27 April 2021 the US Secretary of State, Anthony Blinken, confirmed this during a roundtable interview with Kenyan and Nigerian journalists. Blinken said: "We have had an issue with KEMSA, the institution responsible for the distribution, and as you know very well, concerns in particular about corruption that I know the government is working to reform. We have an obligation to our own taxpayers when we're spending their money to do it in a way that is accountable and fully transparent".

A standoff arose when USAID selected its choice of the entity to procure and distribute its donations to Kenya. In January 2021, USAID through Chemonics shipped a consignment of medications, that included drugs for HIV patients, into Kenya. However, the consignment was held up at the port of Mombasa due to a tussle over taxes. Kenya's policies for government-to-government donations channeled through the relevant government institutions allow a tax waiver, as was the case when the US government through USAID was donating medical supplies to the Kenyan government through KEMSA. However, the use of private entities to procure donations requires the private entity to pay duty. In this case, Chemonics, as a private organization, was asked to pay $829,000 importation tax before the consignment was allowed into the country. According to the Kenyan newspaper, the Standard, there was a stalemate between the government and Chemonics and it was not until 6 April 2021 that the Kenyan Ministry of Finance waived the taxes for the consignment following a public outcry over the manner in which the government had handled the donation.

The impasse has created a shortage of ARVs at the health facility level. Despite the Ministry of Health's assurance that there are enough ARVs in the country, people living with HIV are suffering as they are currently only being prescribed a week's supply, unlike before when they were supplied with enough to last for three to six months. Thus, Kenya's 1.4 million people living with HIV have been experiencing ARV rationing since February 2021. In April 2021, sex workers and people living with HIV took to the streets in Mombasa to protest about the ARV shortage and demand that the government address it. On 20 April 2021, KEMSA sent off a consignment of 29 types of ARVs for distribution to health facilities across 31 counties. These drugs were old stocks that the Global Fund and the President's Emergency Plan for AIDS Relief (PEPFAR) had donated to the country and KEMSA had kept them in the warehouse for months. However, there was an uproar over allegations that some of the ARVs distributed had been phased out in 2019 due to their adverse side effects on patients. KEMSA had previously indicated in March 2020 that it had destroyed these drugs and thus that they were no longer in stock.

KEMSA has a tainted image and therefore lacks donors' confidence

The weight of procurement irregularities has been hanging over KEMSA since 2020 when the institution was alleged to have mishandled the procurement of COVID-19 supplies, including personal protective equipment. KEMSA has been accused of flouting procurement regulations, leading to the misuse of public and donor funds earmarked for the COVID-19 response. Both the Global Fund and USAID expressed concerns over the alleged corruption and threatened to withdraw funding to HIV, tuberculosis (TB), and malaria programs in the country.

To kickstart investigations into the alleged corruption, the KEMSA board suspended three senior officials, including the Chief Executive Officer. Several investigative bodies in Kenya have since been looking into the issue. The Ethics and Anti-Corruption Commission opened its investigations on KEMSA's alleged bungling of a $71.3 million tender to procure COVID-19 supplies. According to Parliament's Hansard Report, the Departmental Committee on Health of the National Assembly has been investigating the issue. On 28 August 2020 the Senate Health Committee grilled the KEMSA board chairman over the procurement anomalies. When addressing the nation on 26 August 2020, the President of the Republic of Kenya gave investigative agencies 21 days to conclude investigations into the alleged improprieties at KEMSA.

More lip service but little action

Despite the President's order and several government institutions being actively involved in investigating KEMSA, there is no progress to show nine months down the line. It is for this reason that Transparency International sought an update on the status of investigation of the KEMSA scandal through a letter to the Director of Public Prosecutions (DPP) on 29 March 2021. Transparency International has raised concerns on the length of time taken to investigate the matter despite shocking reports from the Parliamentary Committee hearings on the blatant disregard of procurement regulations. The only action that indicates some level of success is the latest action of the President to disband the entire KEMSA board on 29 April 2021. However, on 17 March 2021 the President had earlier moved the KEMSA board chairman to the Communications Authority as its new board Chairman, despite the alleged scandal at KEMSA dangling over him.

Corruption is a threat to country ownership and building resilient and sustainable systems for health

The preference of one of the leading donors opting not to use KEMSA to procure and distribute medical supplies, including ARVs, is a big blow to the initiatives of international health financiers such as the Global Fund to build resilient and sustainable systems for health and foster country ownership through working with local national institutions. Over the years, KEMSA has received support from several partners, including the Danish International Development Agency (Danida), Germany's KfW, the United Nations Population Fund (UNFPA), UNICEF, USAID and the World Bank to strengthen its supply chain management. As an institution, it has worked well on the procurement of Global Fund-supported ARVs to the extent of being able to secure lower prices than the Global Fund's PPM, as captured in the Office of the Inspector General's 2018 audit report of Global Fund grants to Kenya. These latest events, therefore, are a blow for the Global Fund and other donors, and not just the Kenyan people.

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