HARARE – The Pharmaceutical Society of Zimbabwe (PSZ) has warned of a looming drugs shortage after it failed to access foreign currency from the Reserve Bank of Zimbabwe (RBZ) for the importation of critical medicines.
Zimbabwe is relying on foreign imports for its drugs, equipment and hospital consumables and imports over $400 million worth of basic drugs each year.
The importation of drugs and essential medicines has been further worsened by the troubles at the country’s biggest pharmaceutical company — CAPS Holdings — which used to satisfy 75 percent of the country’s market.
Yesterday the PSZ told the Daily News that despite an earlier commitment by the RBZ to prioritise the industry, the central bank had failed to honour its pledge of releasing $4 million every for the importation of drugs.
“The pharmaceutical industry is still suffering due to the inadequate allocation of foreign currency by the banks and the central bank to the industry. Despite earlier statements by the Central Bank that they are allocating $4 million a week to the industry a few months ago and subsequent engagements amongst the pharmaceutical industry, the central bank and ministry of Health and Child Care, the situation still remains dire and shortages of critical medication is increasingly becoming commonplace,” warned PSZ vice president Portifa Mwendera.
“Firstly, the industry assured the reserve bank and ministry of Health and Child Care that the $4 million a week is quite adequate to sustain our industry with room for expansion and export from the pharmaceutical manufacturing sector. Secondly, the industry submitted a listing of the payments to foreign suppliers that was still outstanding and for the wholesale distributors, this listing showed approximately $15 million owing. This figure excludes what the amount owed to manufacturers and retailers, which are a significant importer for both the public and private sector.
“Now, months after these engagements, we are yet to see reportable movement on those positions with the drug availability hitting even lower levels than ever before both in the public and private sectors.
“We have non availability of some drugs such as insulins, and oral antidiabetic as well as salbutamol inhalers, making management of patients who need these chronic medications quite difficult and costly. It has been our hope that the monetary authorities would move with haste to address the dire need that exists in the sector because we still have to contend with the logistical and manufacturing cycles to ensure uninterrupted supply to those who need these medicines,” added Mwendera.
PSZ is the umbrella representative body for pharmaceutical manufacturers, wholesalers and retailers.
Yesterday RBZ Governor John Mangudya said there was a huge foreign currency backlog and as result, they had not been able to disburse to key priority areas such the pharmaceutical industry.
“The backlog is attributable to the usual high demand for forex associated with the end of year and festive season. We shall be attending to this priority requirement with the objective to reduce the backlog and to meet current requirements,” said Mangudya.
In terms of RBZ arrangements, pharmaceutical companies willing to import finished medicines or raw materials approach their banks and request payment of certain specific amounts to their foreign trading partner through the bank’s nostro accounts.
Nostro accounts are accounts that local banks hold in foreign currency with another bank outside the country.
The bank would then request approval from the RBZ, which then does its allocations depending on the available foreign currency reserves
However, recently, there have been serious challenges in accessing foreign currency despite the RBZ having the pharmaceutical industry on its top priority list.
Drug companies say that wholesalers have stopped the purchase of widely prescribed medication like painkillers, anti-retroviral drugs, antibiotics and drugs to cure non communicable diseases — part of the national list of essential medicines — mainly due difficulties in accessing foreign currency allocations from the central bank.
The situation has had a serious knock-on effect as pharmaceutical wholesalers and retailers have been forced to significantly increase the cost of some major drugs as a stop-gap measure to remain in business.
Zimbabwe’s health delivery system is on its knees.
Last year, major referral hospitals had to suspend many services as a result of the shortage of drugs, including painkillers — exposing how much things have fallen apart in the country since the early 2000s.
United Bulawayo Hospitals and Harare Central Hospital were among the major health facilities that had to suspend normal services as a result of drug shortages, including pethidine — a synthetic compound used as a painkiller, especially for women in labour and during caesarean operations.
And Binga District Hospital, which is situated in one of Zimbabwe’s poorest regions, was last year also forced to scale back its services as a result of water and electricity shortages.
At the peak of its economy, Zimbabwe imported drugs minimally due to the then healthy state of its pharmaceutical industry which was largely dominated by CAPS Holdings.
CAPS Holdings has been teetering on the brink of total collapse ever since it started experiencing financial problems more than five years ago.
CAPS Holdings’ Southerton plant at the flagship CAPS Private limited, is currently operating at five percent of installed capacity.
Government has since snapped up CAPS’ debts through the Zimbabwe Asset Management Corporation, an RBZ unit setup to assume distressed companies’ debts to banks.
At its peak, the struggling drug manufacturer accounted for 75 percent of the local healthcare products market and was involved in the manufacture, wholesale distribution, and retail of pharmaceutical, consumer, and veterinary products.
CAPS is only operating one out of its four plants in the capital, Harare, as a result of lack of funding from new shareholders, government, leaving the country’s health institutions and donors with no option but to procure medicines, including intravenous drip water, outside the country.
It ceased manufacturing drugs and failed to have its 15-year lease of Harare’s upmarket St Anne’s Hospital renewed in 2013, while its QV Pharmacy chain has only recently returned to good health under judicial management.
CAPS Holdings had CAPS Private Limited, QV Pharmacies, Farm Centre, McDonald Scientific, Glassblowing Industries and Geddes Limited under its wings as it dominated the local and regional markets.
It had also branches in Botswana, South Africa, Zambia and Malawi.