Kemsa defends Sh2.2bn debt owed by counties

Saturday August 17 2019

Uasin Gishu County officials sort out drugs delivered by Kenya Medical Supplies Authority in Eldoret on November 27, 2018. PHOTO | FILE | NATION MEDIA GROUP

This week, Kenya Medical Supplies Authority (Kemsa) CEO Jonah Manjari responds to your questions.


1. Sir, your Authority is a major supplier of drugs to counties. In the recent past, many Kenyans have become very sceptical of transactions involving our counties due to the level of corruption reported by the Auditor-General. Indeed, he says that most of the pending bills in these counties are illegitimate. How have you insulated your Authority from these corruption deals involving supplies to the counties? Are these measures sustainable or you would wish to have some laws changed to deal with them? Komen Moris, Eldoret

Kemsa has stringent systems and procedures across all the functions of the authority. The authority has a very robust internal audit team.

Kemsa is consistently audited by the national government (Kenao, The Directorate of National Cohesion and Values, Ombudsman) and other key stakeholders including World Bank, USAID, Global Fund and Transparency International, Kenya among others.

There has been no adverse audit report from all these audits especially touching on corruption.


Kemsa operates on a revolving drug fund and counties are expected to make timely payments. This has not been the case.

The counties owe Kemsa Sh2.2 billion. Kemsa has been working closely with the Council of Governors and the respective Counties to resolve pending debt issues.

Kemsa operates an ERP system whereby customer orders and invoicing are done within the system.

Kemsa delivers products with a proof of delivery which is attached to all invoices. There is no likelihood of fictitious invoicing whatsoever.

Kemsa has been advocating for the amendment of the PFM Act to ring-fence health products and technologies budget for the counties.

2. One of the reported weakest part of our devolution is the supply and availability of drugs in our hospitals. This has always been blamed on inefficiencies in both the national and county governments. What is your take on this issue? Francis Njuguna, Kibichoi

Devolution of healthcare was a great stride towards bringing services closer to the people.

Supply and availability of essential medicines and medical supplies is pegged to demand from the counties.

Kemsa supplies the counties based on orders received. Kemsa has entered into framework contracts with its suppliers to facilitate optimal stock availability.

There has been challenges in forecasting quantification and ordering by the counties.

Kemsa is working with stakeholders to assist the counties to streamline forecasting and quantification process.

3. Kemsa has been accused of supplying faulty diagnostic equipment and procuring expired drugs. What is the Authority doing to address the grave concerns? Raphael Obonyo, Nairobi

Kemsa has a stringent quality assurance process right from tender evaluation, receipt of products and conducts post distribution surveillance to ensure that the integrity of the products is sustained throughout the supply chain to ensure that all health products reaching the intended users are safe, effective and meet acceptable specifications.

The authority has been accredited with ISO 9001:2008 Quality Management System for several years now.

The authority’s lab is ISO/IEC 17025:2005 accredited and Kemsa has recently been audited for the latest Lab ISO accreditation.

Kemsa has developed strong collaboration with Pharmacy and Poisons Board and National Quality Control Lab.

During the post-market surveillance, all products that do not meet the required standard are withdrawn from the market at the cost of the suppliers.

I wish to reassure the public that products supplied by Kemsa are safe and the authority will remain vigilant to safeguard the health of Kenyans.

4. What is Kemsa doing to ensure cancer screening is available, accessible and affordable for the youth and poor people in the informal settlements like Kibra and Korogocho? Raphael Obonyo, Nairobi

Kemsa is collaborating with the National Cancer Institute to ensure that capacity to screen and treat cancer is accessible, affordable and safe to all clients.

Kemsa has expanded its products range to include oncology products, point of care diagnostics and therapeutic devices.

Kemsa is partnering with the counties to strengthen the cancers centres.

5. One of the mandate of Kemsa is to support county governments to establish and maintain appropriate supply chain systems for drugs and medical supplies, but a number of times there are delays in supplying drugs to county facilities. What in your view causes these delays and what is Kemsa doing to mitigate against such? Jeff Chepkwony, Sigor — Chepalungu

Kemsa supplies essential medicines and medical supplies on a demand-driven process.

The delays are often occasioned by budgetary constraints by the counties.

Erratic ordering by counties sometimes impacts Kemsa’s ability to process multiple orders made at same time especially those made towards end of the financial year.

Kemsa is in the process of refurbishing Kisumu and Mombasa to be distribution centres to serve counties in cluster of counties around Mombasa and Kisumu.

6. Your primary mandate is to procure, warehouse and distribute medical commodities to public health facilities in Kenya. As Kenyans grapple with managing the rampant cancer menace countrywide, what austerity measures has Kemsa developed and put in place to ensure that the types and quality of medication, appliances and related commodities are not interfered with by unscrupulous suppliers and distributors whose ulterior motive is only to make profit? Dr Melckzedeck K. Osore, Mombasa

Kemsa collaborates with Pharmacy and Poisons Board and National Quality and Control Lab to ensure that all products procured and supplied to the counties are efficacious and meet standards.

Kemsa partners with National Cancer Institute, oncology specialists both in public and private facilities to select and quantify oncology products. Due to the sensitivity of oncology products, Kemsa advertised through restricted tenders to ensure only reputed manufacturers are invited to bid.

7. What would you consider the biggest challenge facing Kemsa in its quest to contribute towards the achievement of Universal Health Care in Kenya and, consequently, leading to achievement of good health and well-being for most Kenyans by 2030 as aspired in the global Sustainable Development Goals (SDG 3)? Dr Melckzedeck K. Osore, Mombasa

The Ministry of Health and Kemsa have been working with key stakeholders to capture voice of the customers in identifying areas requiring strengthening.

Kemsa is undergoing institutional strengthening to assure optimal stock levels. Procurement bureaucracies and lack of procurement regulations hinders optimal stock availability.

8. The Health Laws (Amendment) Act granted Kemsa absolute monopoly over supply of drugs to county governments despite opposition from county governments. What reason(s) would you offer to justify such monopolisation of the supply of drugs to health facilities? Does Kemsa have capacity to meet the demands of county governments without unnecessary delays? Jacque Gichira, Nairobi

The best international practice for handling health products and technologies is guided by pooled procurement and international reference pricing.

In Kenya, pre-devolution, all public health facilities were pulling health products and technologies from Kemsa.

The funds were ring-fenced at the Ministry of Health. The health facilities were allocated drawing rights with predetermined delivery schedules.

This business model changed after devolution. Kemsa prides itself for offering value to the counties and other public health facilities.

Counties have always procured from Kemsa due to: quality of its products, efficiency gains arising from bulk procurement.

Kemsa observes World Health Organisation guidelines on essential medicines and medical supplies list.

Further, Kemsa has adopted the national Kenya Essential Medicines and Medical Supplies List as guide towards its formulary.

Kemsa has elastic capacity to meet the needs of the counties as demonstrated pre and post devolution. With increased throughput that we have seen over the years, Kemsa has proven up to the task to meet the ever-growing needs of the counties.

One of the challenges however, has been the erratic ordering of the counties which is currently been addressed through commodity management and supply chain trainings that Kemsa is offering to the counties.

9. Nearly all counties owe Kemsa money to the tune of billions for drug supplies dating as far back as 2013. Due to the prevailing financial crisis in our counties do you think it is wise to continue demanding the same or write-off all pending debts and freeze fresh supplies in specific counties with very huge arrears to cushion your agency from loss making? Dan Murugu, Nakuru

Monies owed have to be paid, the orders are committed in the IFMIS and they were serviced against issued LPOs.

The PFM Act has no provision for writing off public funds by the authority, only the CS Treasury can write them off.

Kemsa as a social enterprise may not be in a position to completely freeze supplies as long as there is a commitment to pay by the counties.

The alternative would be to have Treasury to disburse the monies owed by these counties directly to Kemsa.

A case in point the Wajir County recently authorised the National Treasury to credit Kemsa’s Account through their County Revenue Funds, alongside this the ring-fencing of monies for health products and technologies in the PFM act is deemed necessary.

10. Kemsa enjoys a near absolute monopoly in the supply of drugs to public health facilities all over the country. However, in the recent past private pharmaceuticals have been attempting to penetrate your market citing failure of the Authority to supply all varieties of drugs to our hospitals and in some instances distributing drugs past the expiry dates that are a health risk to patients. What is your take on this matter? Dan Murugu, Nakuru

Kemsa’s Warehouse Management System is set to ensure that commodities are not received in our warehouses below 75 per cent of their shelf-life. Kemsa does not supply any product below six months of shelf-life.

The authority therefore can never distribute products that are past their expiry date. Kemsastocks products that are within the Kenya Essential Medicines and Medical Supplies List. Counties are at liberty to procure products that they may need and are not stocked by Kemsa but within the law.

Counties use Kemsa- LMIS to make their orders, this system cannot display commodities with less than six months of stock shelf life or expired.

Kemsa strictly follows the disposal guidelines as stipulated in the Public Procurement and Asset Disposal Act, 2015 to dispose of any expired products.