•An amendment to the Kemsa Act 2018 turned the authority into a near monopoly, sparking off conflicts with the counties and the other suppliers.
•In 2018, the authority had around 350 health products and technologies. Currently, it supplies more 1,000 health products and technologies
CEO of the Kenya Medical Supplies Authority spoke to Star's John Muchangi.
It’s now exactly two years since you joined Kemsa in July, 2018. How is your journey so far?
It has been an experience. But it’s a journey that I’ve taken before in the previous engagements with the counties (as Health CEC for Kiambu and Nakuru).
When I came to Kemsa, one of the things we did at first was familiarisation to identify the gaps.
One of the issues I found is that staff were working under deplorable conditions, and we had to start the process of improving the working conditions.
As that continued, we realised that there was a lot of disharmony in terms of salary gaps. And we formed a small committee to look at the harmonisation of salaries, where every skill would be rewarded as per their contribution.
We offered promotions, a lot of them to staff who were feeling that they had stagnated in a job for quite some time.
And we improved our fleet management. Previously, the vehicles were not under car track, and we had a lot of fuel leakages and people asking for per diems and they don’t go to the stations where they have been sent. So now per diems are tied to the car tracks, and that has improved finance management.
We also had some directors who had not been confirmed. And through the board, I worked very hard to make sure they were confirmed.
We have also developed a strategic plan, which is covering the year 2019 to 2024. The plan elaborates on the collaborations that we will be working on with the county governments, our donors and other stakeholders.
Heads of several parastatals talk of having to fight cartels, was this the case for you?
Cartels are everywhere. The form we had here was skewed procurement where you have some companies always being favoured. So one of the ways to fight such battles is to have generic specifications, which are not skewed. Because if you do a tender and all the specifications are for a Mercedes engine, the outcome will always be a Mercedes vehicle.
The other thing is trying to make sure that the procurement teams are not static, they are ad hoc. You keep on rotating them to reduce familiarisation.
And finally, we always have to do background checks, due diligence on these cartels. We try to break them. And as you know, in the drug industry, if you focus more on manufacturing, the cartels will be removed or reduced because manufacturers cannot form a cartel but suppliers do have cartels.
The Kemsa Act was amended in 2019, essentially turning the authority into a monopoly. How did this change your business?
I participated very much in the review of the Kemsa Act 2018, that was amended in 2019. One of the things we have tried to look at is how we could increase Kemsa’s mandate to also incorporate the Universal Health Coverage, which was not in the previous mandate.
That changes our business model. The business model here is ring-fencing the finances for health products and technology. Previously, the finances were in the counties. But under UHC the funds will be ring-fenced, meaning that all Kenyans will get the same commodities, at the right pricing and also at their doorstep.
In essence, that change of the Act almost brought in an aspect of monopolisation, which brought a lot of conflict with the counties and other suppliers.
We are not looking at monopolisation. We are looking at buying in bulk, having economies of scale and translating that directly to the mwananchi, as we contribute to the reduction of healthcare costs in this country.
If you look at countries such asSouth Africa, they have what we call pool procurement, where all entities procure from one entity. And that cost efficiency is related to the product pricing.
Orders given to Kemsa have increased. When I was joining, we had around 350 health products and technologies. Currently, we have more than 1,000 health products and technologies that we supply to our customers.
So why is it that despite bulk procurement, chemotherapy drugs and hormones like insulin remain very expensive?
What we have done on oncology is that we have increased the products range so counties can get all products they want from us.
I also want to thank the government for coming up with startup kits for oncology that are used in cancer centres across the country.
As for insulin, we are working directly with the manufacturers using their local dealerships.
We are also using a forecasting and quantification tool to determine how many diabetics we have in the country, what type of diabetes and what type of insulin they will use, whether it’s soluble or biphasic insulin.
We have a cancer specialist within the authority who is guiding us on how to use this tool within the authority.
This has drastically brought down the cost of oncology products because of availability and bulk purchasing.
How is the problem of debts by counties and the Ministry of Health? Any strategic direction on repayment?
The bright future is that the Universal Health Coverage will help to reduce the issues of debt, because money will be guaranteed and money will be ring-fenced.
On the aspect of the ministry, the debt has reduced. They had committed to pay around Sh950 million by the end of the financial year. That is what we are able to confirm.
We reward the counties that are performing well by partnering with them in medical camps and going for outreach programmes with them."Dr Manjari
As for the counties, we are very happy they are adhering to the presidential directive. We are hoping that because they have been given a window until July 10, we’ll be able to clear most of the pending bills.
The other strategy we have employed is to have one-on-one interactions with the counties’ CECs and chief officers in the Health and Finance departments as well as the governors.
It has yielded fruit. For instance, Narok is now willing to clear its long-standing debt.
We have problematic counties that we also try to talk to frequently. We also have sales executive in the counties who collect for us. We also have another approach where we are talking to the Senate to allocate more funds to counties that are clearing their debt.
Naming and shaming is not working very well. So we are doing reward recognition.
We reward the counties that are performing well by partnering with them in medical camps and going for outreach programmes with them.
What are your thoughts on decentralising Kemsa to the counties for easier access to drugs and medical equipment?
We have opened Kisumu and Mombasa as our regional distribution centres.
We’ll be distributing to 19 counties from Kisumu, and from Mombasa we’ll be distributing to the six coastal counties. That gives us 25 counties that we’ll distribute to from those two regions and the balance of the 22 will be distributed to from Nairobi.
But our vision is to open up Nakuru and Nyeri. For the ASAL region, our vision is to have a major distribution centre in Isiolo. We have been given land by the county government, so we’ll do adjudication and planning, the rest follows through budgetary allocation.
We also work closely with USAID. They are supporting our efforts on decentralisation. I had a meeting with the mission director. One of the issues we discussed at length is decentralisation.
And as we do this, we’ll also come up with the representatives that will be incorporated into the county governments. They will be assisting the counties to do forecasting, quantification and even procurement plans.
These are officers employed by Kemsa but will be stationed in a certain county, covering some regions. We have divided the country into Western, Central, Coastal and Northeastern. Then we have something called a national carrier, which will be covering the whole country on other aspects.
Are you holding any PPEs or drugs for treatment of Covid-19?
For Covid-19, we have done it in three categories. First, we have the donations from various donors. Secondly, we have Ministry of Health procurement for Covid items and thirdly we have Kemsa procurement for the items.
For the donations, we come up with a virtual warehouse where all these things are visible. We are then given a distribution list by the Ministry of Health, and we distribute to the beneficiaries.
For the MoH Covid procurement, we warehouse them here and distribute to the beneficiaries after we are given the distribution list.
But for Kemsa capital we sell to the people who approach us wishing to get these commodities. We have seen an influx of people coming to buy, especially counties, because as you recall, the President has given the counties funds to establish Covid-19 centres. They need to buy beds and other commodities.
What is the status of the Sh3 billion modern warehouse and office block at Kemsa?
Warehouse construction is 80 per cent complete. The warehouse is divided into two, we have the flammable goods store, which is 100 per cent complete, and then we have the main warehouse where we are at 80 per cent.
What’s remaining are the finishes, and the racking system, which we have given a notice of award. But the win has been contested at the PPRA (Public Procurement Regulatory Authority), and were are awaiting the outcome of the case before we award.
The office block is 15 per cent complete. The structures are in Embakasi.
How much do you currently procure from local manufacturers?
About 60 per cent. We have also identified an extra 16 products, including some products being used for Covid such asAzithromycin, dexamethasone and other antibiotics. We’ll be floating a tender soon restricted to local products. So maybe we will come to 80 per cent.
We are also encouraging condoms and mosquito nets to be locally manufactured. Kitui is doing nets but they need validation from the Pests Control Products Board. We don’t have locally made condoms because of the aspects of rubber.