EXPLAINER: Understanding the state of affairs at KEMSA

Major reforms are underway at the Kenya Medical Supplies Authority (KEMSA) in what has been a long road of investigations that are still ongoing.

The graft allegations surround the procurement of COVID-19 related medical equipment at alleged inflated costs to the tune of over Ksh.7 billion. What is the state of KEMSA right now? Well, it is a beleaguered body under investigation by more than one agency or body.

One, is the Public Investments Committee that held 55 sittings and spoke to directors of over 102 firms, and whose final recommendations included further investigations into the graft allegations by the Ethics and Anti-Corruption Commission.

As for that investigation, well the files are now with the EACC. Following the back and forth between their office and that of the Director of Public Prosecutions (DPP), the anti-graft body issued a tweet following a story by Citizen TV highlighting the ping pong between the two offices saying there is a team comprising officers from both agencies currently addressing issues raised by the DPP.

Not forgetting the Auditor General’s office which, a year ago in September 2020, said that KEMSA procured COVID-19 related items at a higher price as compared to the current market pricing implying that KEMSA may realise a loss of over Ksh.2 billion.

The audit report also recommended further investigations by the DCI and the EACC. They also recommended that the KEMSA board consider overhauling the business model which has failed to deliver a robust supply chain management system that is efficient.

So, what is the business model of KEMSA?

First of all, KEMSA is the sole procuring body for all public health facilities. It is a fully demand-driven supply system based on a not-for-profit self-sustaining commercial model. They use their power to purchase medicines wholesale and then supply them to the counties that then pay them for the drugs.

But the counties owe KEMSA over Ksh.2.4 billion in debt. Case in point, Nairobi County which owed KEMSA over Ksh.200 million. KEMSA resumed supplies to Nairobi County hospitals after a commitment to pay the debt over time in 2018. County governments in some instances say it is because of monies owed to them by the national government.

This debt means KEMSA cannot supply hospitals with what they need. And that means that you aren’t able to get the drugs cheaply when you go to hospital and are asked to go and purchase them outside at higher cost.

The recent audit report highlights more of these inefficiencies.

A snapshot of just one month, June 2021 shows that KEMSA  received 11,000 orders but it only serviced 345 orders. This is a fill rate of less than 1%. A fill rate is defined as the ability of KEMSA to fulfill or service orders it receives from various public hospitals.

Dr. Daniella Munene, a pharmacist and the CEO of the Pharmacists Association of Kenya tells me this fill rate is supposed to be a minimum of 95%.

In addition, KEMSA is owed Ksh.6.4 billion and owes its creditors Ksh.4.5 billion. The medical supplies authority is bloated. The number of staff approved was 341, while it currently has 922 members of staff. This means KEMSA has 581 more employees than were approved.

So what next, the reforms. There is debate around what is being done and the manner in which it is being done, some of which is subject to court proceedings.

But what is key is that these reforms must be done because this has real effects on Kenyans seeking affordable medicines at public health facilities who are now spending more money purchasing the regular drugs they need outside of public hospitals.