Prime News Ghana

Supply of medicines to NHIS will be on cash basis only - Pharmaceutical Industry

By primenewsghana
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The Pharmaceutical Industry says all medications supplied to the National Health Insurance Scheme (NHIS) and Private Health Insurance Companies would, with immediate effect, be on a cash basis until the economy stabilizes.

This, the Association said, has become necessary due to macro-economic indicators such as exchange rate and payment terms. Inflation, interest rates, fuel prices and utilities, among others, have a deleterious effect on the smooth running of the pharmaceutical business in Ghana.

Mr. William Adum Addo, President of the Pharmaceutical Importers and Wholesalers Association, told Journalist in Accra on Thursday that pharmacy companies would now operate a “no credit” policy for all buyers in the industry.

He was speaking at a press briefing organised by the Pharmaceutical industry, which included Ghana National Chamber of Pharmacy, Pharmaceutical Manufacturers Association of Ghana and the Pharmaceutical Importers and Wholesalers Association of Ghana.

The joint press conference was to highlight the impact of the current economic difficulties on pharmaceutical businesses and steps being taken to save the industry.

The Pharmaceutical Industry has over the years been credit driven, the public sector pays on the average of six- to 12 months due to delayed payments for the NHIS, while major private facilities make payments for supplies within three to four months.

Mr. Addo said, “In the current circumstances of daily devaluation of the cedi, it is imperative to state that pharmaceutical supplies on credit under these terms has led to erosion of operational capital of pharmaceutical importers and manufacturers”.

He called on the National Health Insurance Authority (NHIA) and all other stakeholders and buyers to accept its new policy to help save the industry from imminent collapse.

The Association encouraged the National Health Insurance Scheme (HNIS) and all private health insurance companies to give accredited facilities seed funds to buy medicines on cash for supplies to provide patients under the scheme with medicines.

It also advised the Ghana Statistical Service (GSS) to include medicines among the basket of items used for the Consumer Price Index (CPI) calculations, adding, “such an adjusted CPI will display a better inflation rate for planning and strategy for the pharmaceutical sector”.

Mr Addo said, “The MOH, GHS and NHIS should as a matter of urgency meet with the leadership of the above Associations to discuss possible financial reengineering to save the situation”.

Mr Harrison Abutiate of the Ghana National Chamber of Pharmacy noted that the industry had been greatly affected by the recent economic hardship, hence the need to take drastic measures to save the industry.

He said due to the COVID-19 a lot of medicines expired since a lot of people failed to seek medical attention, a situation that had affected the industry players amid current economic hardship in the country.

Mr Abutiate noted that as a first step to further halt the deterioration of the industry’s finances, its payment terms and business models had to change in order to survive.

“We have taken note of the areas that need to be attended to urgently so that our business does not collapse and cause more havoc to an already serious situation”.

Madam Lucia Addae Ntiri, Executive Secretary, the Pharmaceutical Manufacturers Association of Ghana, also noted that structural changes were key to enable the industry to continue to be in business.

According to her many of the industry players would collapse if immediate steps were not taken.

She said, “Depreciation of the cedi against the dollar makes planning difficult, manufacturers and importers have been absorbing the cost we cannot afford to run at a loss any longer”.

She encouraged suppliers to pay cash so that manufacturers and importers could have the money to be able to buy the products and sustain their businesses.

According to the industry, the situation was serious and needed support to ensure that they maintained the pharma industry, not just for the drugs but for everyone to stay alive.