The Central Medical Stores Trust (CMST) says it is struggling to settle debts owed to suppliers due to a K16.6 billion bill public hospitals owe the institution.
Briefing the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises in Lilongwe on Thursday, CMST chief executive officer Feston Kaupa said this year Parliament approved a drug budget worth K20 billion of which K12 billion was for district hospitals and health centres and K8 billion for central hospitals.
He said CMST had noted a reduction in the budget from central hospitals and the National Local Government Finance Committee which manages the budget for district hospitals.
Said Kaupa: “Often-times, we have noted over these years that there has been a big reduction in the amount of money that is made available so much so that some hospitals over use their budget.
“But to avoid hospitals going without supplies, we continue to supply them on credit; hence, the K16.6 billion that the hospitals owe us.”
He said the trust is in constant dialogue with the Ministry of Finance, Economic Planning and Development and the Ministry of Health on modalities for clearing the debt.
However, Kaupa asked the committee to help the trust gain a vote in the national budget for the smooth running of the institution.
CMST is financed through the drug budget for central hospitals and district hospitals and the funds are then released to CMST to procure drugs and supplies.
In her remarks, committee chairperson Lilian Patel noted with concern that a lot of drugs end up being destroyed as a result of being expired.
In response, Kaupa explained that the drugs which expire and are disposed of are mostly donations the country receives, but there is no need for them.
He said: “Malawi is used as a dumping site. Most of these drugs received are burnt because sometimes there are changes in the treatment guidelines and they stop to be used as soon as new decisions on treatment guidelines are made.”
The committee commended the CMST team on their presentation of facts.
CMST was formed following Cabinet approval of the Trust Deed in October 2008 which saw the appointment of the CMST Board of Trustees in November 2010 and revocation of the 1968 Medical Stores Fund Order in July 2011. Thus, Central Medical Stores was registered as a public trust in August 2011. n