Local pharmaceutical manufacturers have expressed worry over outstanding debts owed drug suppliers by the National Health Insurance Scheme (NHIS), saying the situation is hampering business operations.
Speaking in an exclusive interview with the B&FT, the Managing Director of Dannex Limited, Yaw Opare-Asamoah, indicated that the situation stands as the greatest challenge facing drug supply, and needs to be addressed within the earliest possible time, or ‘cash and carry’ would come back.
“The National Health Insurance Scheme/ Authority is one of the things that is a major challenge facing drug supply in Ghana. They owe suppliers between ¢900m and ¢1.2billion.
If there is no solution to this, it has the tendency of crippling the industry or supply in the country, because the National Health Insurance has to pay the facilities; the hospitals and the polyclinics”, he said.
“Payments which were due in the second quarter of last year is still outstanding, and we take money from the banks to work so if they owe us more than about a year, it is very worrying”, he further added.
Another challenge Mr. Opare-Asamoah noted, is the lack of adequate and cheaper capital available to local producers to carry out production intended to bridge the gap between the distribution of locally manufactured drugs and imported pharmaceutical products.
The latest Oxford Business Group report has shown that although more than 75percent of pharmaceutical companies in Ghana are locally owned, only 30percernt of the market is covered by local production, with the bulk of drugs imported from India and China.
The report further said that lack of resources has resulted in capacity underutilisation of less than 55percent on the average, although the local industry has an installed capacity for both solid and liquid dosage forms to supply all domestic needs as well as enough for export, the report said.
To address this, Mr. Opare-Asamoah said it would require some subsidised long-term funding of local manufacturers, adding: “all the nations that have had strong local pharmaceutical manufacturing companies be it in India or so have had some support from governments to build those industries.
If we do not have some incentives which the NPP government has outlined in its manifesto that they intend to implement, we will still not be able to achieve some of this increase in local supply”, he said, admonishing the new government to live up to the task.
Under the petitions of local manufacturers, the government also decided to amend value-added tax (VAT) legislation to extend tax exemptions to the supply of pharmaceuticals in Ghana, the supply or import of active ingredients and selected inputs for the manufacture of pharmaceuticals, and the import of selected drugs or pharmaceuticals.
Parliament passed the VAT (Amendment) Act of 2015 (Act 890), together with Legislative Instrument 2218 in October 2015. The amendment extends tax exemptions to over 510 active pharmaceutical ingredients, selected inputs and pharmaceuticals.
During the 2016 elections campaign, the NPP stated in their manifesto the party’s resolve to strengthen the pharmaceutical industry and services to ensure among other things, improvement of drug supply chain by expanding rapidly, local production and ensuring quality affordable drugs are available.
With reference to those promises for the industry, Mr. Opare-Asamoah admonished the party’s government which is in power to implement them quickly “to be able to have the competitiveness to enter into different markets.”
“We entreat the government to focus on the areas that will help boost local supply, and employment in the country, and not to put in any measure that will make the local pharmaceutical companies uncompetitive”, he cautioned.
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