Government owes pharmaceutical companies R1bn, says report
Provincial health departments collectively owed pharmaceutical companies a staggering R1bn as of July 2014, according to a hard-hitting report released on Wednesday by auditor-g eneral Kimi Makwetu.
The report highlighted problems at every step of the medicines supply chain, ranging from a critical shortage of pharmacists to poor record-keeping in health facilities, which led to shortages of medicines that placed patients’ lives at risk.
Gauteng had the biggest outstanding debt to suppliers of national contracts, at R282m. The total debt affected 50 of the 123 companies with contracts.
"The late or non payment of suppliers had a negative effect on medicine availability. Without regular payments, the suppliers face undue levels of debt, giving them recourse to default on orders, leading to ... shortages and stock-outs," said the report.
But the auditor-general also drew attention to late deliveries of medicines, and said suppliers should pay penalties when they failed to meet their deadlines.
All medical depots were found to have run out of stock of essential medicines from time to time, and more than three quarters of the 73 health institutions visited reported stock-outs on the days that officials from the auditor-general’s office visited.