Six of the seven companies awarded contracts in the controversial emergency drug procurement tender that Malawi President Joyce Banda got involved in have failed to deliver on schedule, Weekend Nation has established.
The delays have since worried health experts who have warned of serious consequences to patients, especially those suffering from chronic diseases such as diabetes.
Documents show that of the $1.657 million (about K700 million) last-minute drug contracts that Central Medical Stores Trust (CMST) awarded to seven firms, goods worth $701 496 .21 (about K300 million) or 42 percent of the total package have not been delivered.
The trust’s public relations officer Herbert Chandilanga confirmed Weekend Nation’s findings in an e-mailed response last Friday.
He corroborated that out of $1 656 565 worth of the drugs, the trust had only received a consignment worth $955 068.79 (about K400 million) by the April 16 delivery deadline.
The biggest culprit, according to Weekend Nation investigations, is Worldwide Pharmaceuticals, which got the largest share of the tender.
Worldwide Pharmaceuticals is owned by Master Abdullah, the man who also controls fertiliser supplier Nyiombo Investments Limited—a company that, despite a history of late deliveries, is one of the top firms dominating the government’s Farm Input Subsidy Programme (Fisp).
Of the companies contracted to deliver the emergency drug package comprising cholera, malaria and diabetes drugs, only one—Sadm Pharmaceuticals, which was among the five local companies that won the tender—delivered its allocated lot by the April 16 2013 deadline.
The other local firms—World Wide Pharmaceuticals, Sonali Pharmaceuticals, Intermed and Unichem— had only delivered part of the allocated consignments by the deadline.
The only two foreign companies in the deal—Dawa Limited of Kenya and Premiumway International of the United Kingdom—delivered nothing by the deadline.
findings also show that Worldwide Pharmaceuticals, which was given a $1 352 659.75 (about K595 million) contract, failed to deliver over 40 percent of its allocation.
Sonali Pharmaceuticals, which got a $48 322 5 (about K21 million) deal, had not delivered over 45 percent of its quantity. Other local companies that missed the delivery deadline are Intermed and Unichem.
Two international suppliers—Dawa Limited of Kenya and United Kingdom’s Premiumway International—delivered nothing out of their $71 301 (about K31 million) and $4 432 .50 (about K2 million) respective allocations appearing on CMST February 1 award notice.
Chandilanga said the companies were required to deliver the drugs within 10 weeks from the time they got the contracts.
He explained that international suppliers may have failed to meet the deadlines because they delayed to get Letters of Credit (L/Cs).
A letter of credit is a written commitment to pay, issued by a buyer’s bank to the seller’s bank, to enable the seller to access funds to supply goods under the contract.
He also explained that contracts with international suppliers had issues requiring the trust’s Internal Procurement Committee (IPC) to make certain decisions, which delayed signing of the contracts.
But Chandilanga said CMST has written the six suppliers to explain their failure to deliver the drugs on time.
He said the tender rules empower the trust to either cancel the contracts or extend their delivery deadlines based on each supplier’s performance. He said such a decision is, however, made in the interest of progress to avoid further delays on deliveries of the drugs.
Asked how delays by suppliers to deliver the drugs have affected efforts to address the acute drug stock-outs, Chandilanga said:
“[We have] lost business opportunities on requested drugs, which CMST does not have in its warehouses because it means the public and private hospitals may be buying from the private sector. The impact of the delays may [also] necessitate extension of delivery period of the awarded items.”
In an interview this week, Sadm Pharmaceuticals managing director David Bisnowaty said they completed all their deliveries about two weeks ahead of the deadline.
On his part, Worldwide Pharmaceuticals owner Master Abdullah said they delayed to complete their deliveries because clearance of containers of their drugs delayed at Beira Port in Mozambique.
“What has happened is that some of our containers have been stuck at Beira because they have changed the system of clearing the containers from manual to electronic. All our containers that reached the port after April 1 have been affected. It’s now taking about three weeks to clear the containers,” said Abdullah.
He, however, said his company has since delivered about 80 percent of their allocation after the deadline. We could not immediately verify this with CMST.
has also learnt that some of the critical drugs which have not been delivered include quinine for malaria, insulin for diabetes and sodium lactate for cholera.
The suppliers’ failure to deliver the drugs on time comes at a time shortages of drugs for the three diseases are still acute in some hospitals.
In an interview on Tuesday, Kamuzu Central Hospital (KCH) deputy director Davies Mtotha said his institution has incurred huge debts with private suppliers whose prices are higher compared to CMST because it could not access diabetes and other essential drugs from the trust.
“CMST did not have the drugs when we needed them and we ended up incurring debts on drugs from private suppliers. We don’t have enough [money] and CMST now wants us to pay them the debts first before they can supply us with insulin and other drugs which we want,” said Mtotha when asked why the hospital is turning away diabetic patients who need the insulin.
Malawi Health Equity Network (Mhen) executive director Martha Kwataine said both the trust and the suppliers should be held accountable for the late deliveries.
“It raises a lot of questions. Why have they failed to meet the deadline? Either they do not have the capacity or there are genuine concerns. CMST is a public trust whose shareholders are the citizens. CMST and the companies owe Malawians an explanation,” said Kwataine.
She said the failure to meet delivery deadlines deprives patients of their right to access medication.
“We may already have lost some lives in the course. This is unacceptable and must stop forthwith.
“This is hypocrisy because the leadership has already announced that it has bought drugs and hospitals now have drugs when suppliers are failing to meet their targets,” said Kwataine.
Diabetologist and College of Medicine professor of research Moffat Nyirenda said diabetes is a chronic disease which requires patients to be on treatment for life; hence, unavailability of drugs for the disease can cause death to many diabetic patients.
“Insulin is the most critical drug for diabetes. We have seen some improvement now and again, but it’s not optimal.
“Diabetes is not like malaria where you take quinine and then stop after recovering. Once you are diagnosed diabetic, you get the treatment for life. When you stop the treatment you can definitely die; hence, the need to have steady supply of the drugs,” said Nyirenda.
Early this month, the Diabetes Association of Malawi expressed concerns over erratic supply of diabetes drugs in the country, arguing the medicines are only available for few months in public hospitals which, it said, threatens lives of diabetic patients as some of them cannot afford to buy the drugs from private pharmacies.
National Malaria Control Programme (NMCP) programme manager Doreen Ali said they currently have enough supplies of quinine drugs because apart from CMST, they also get malaria drugs from the parallel medical kits programme run by donors.
She referred Weekend Nation to Ministry of Health spokesperson Henry Chimbali on the question of how late drug deliveries at CMST may have affected the fight against malaria.
Said Chimbali: “We have not had any interruptions of late, but we are expecting the complete delivery to beef up our stock levels and be safe based on increasing demand [for the drugs].”
President Banda’s decision in December last year to cancel four initially processed contracts for the emergency supplies of the three drugs may have exacerbated the delays.
The four firms—Dawa Limited of Kenya and three local companies: Sonali Pharmaceuticals Limited, World Wide Pharmaceuticals and Intermed Commodities—were given the earlier contracts to deliver by the end of January 2013.
The President, however, ordered cancellation of the contracts, arguing the process—which was duly approved by the Office of the Director of Public Procurement—was full of irregularities. She then ordered a re-tender, which took some weeks to process, only to have all the four companies succeeding again, but with three companies added, bringing the total to seven.
At the time, the Malawi Law Society (MLS) argued that Banda overstretched her presidential powers by throwing out a process approved by the Office of the Director of Public Procurement (ODPP), which is the guardian of the Public Procurement Act (PPA).
However, State House defended the move, saying the President has powers to directly intervene for the benefit of Malawians if things are not going well as was the case in this matter.