Government orders probe into NMS cancer drugs row

Kampala.

The permanent secretary in the Ministry of Finance and secretary to the Treasury, Mr Keith Muhakanizi, has ordered a special audit into the controversial procurement and distribution of cancer drugs which has been the centre of a protracted wrangle between the Uganda Cancer Institute (UCI) and the National Medical Stores (NMS).

The investigation comes after unending conflict between the two government institutions spanning over four years in which the UCI accuses NMS, the body charged with procurement and distribution of drugs to government medical facilities, of under supplying and sometimes non-delivery of essential drugs budgeted for treatment of cancer patients.
The UCI also accuses NMS of inflating prices of the cancer drugs for more than twice or three times the market rates.

“In accordance with section 11(3-4) of the Public Finance and Management Act 2015, I have now tasked the directorate of Internal Audit in my ministry to carry out a special audit on the supply and distribution of drugs at UCI by NMS. In the event that significant issues other than those covered within the scope of the audit programme come to my attention or the audit team during the course of the exercise, the scope of the audit may be expanded as appropriate,” Mr Muhakanizi ordered in a letter dated July 19.

The letter is copied to the Finance minister, permanent secretary for Ministry of East African Community Affairs which has been asked to release one of its officers for the duration of the audit, the Accountant General and acting Internal Auditor General.

The special audit, which was slated to commence on July 25, is yet to take off under the direct supervision of the acting commissioner Internal Audit management in the directorate of internal audit. The audit team comprises Alice Nangoku-acting assistant commissioner internal audit, Perpetua Biraaro (acting principal internal auditor), Victor Karuragire and Paul Musimani (internal auditors).

Mr Muhakanizi says the special audit was prompted by a petition from Mr John Mugisha, a relative of a cancer patient at UCI, who after watching a bulletin on NTV and reading another investigative story by this newspaper on June 19, decided to seek an investigation into the issue.

On June 19, this newspaper published a story titled, “Why patients have no drugs at UCI” which detailed complaints from UCI citing NMS inflated prices for cancer medicines as compared to market rates for same drugs, non-delivery and under-supply of drugs.

“For over three financial years (2012/13, 2013/14, 2014/15) the viscristine 2mg has been at a price of Shs122,040 per vial, which is still astronomically high as compared to the international market price of $8.66 (Shs26,660) per vial. We started receiving the South Korean vincristine on February 12, 2015…. and this was priced at Shs122,040,” this newspaper quoted Dr Jackson Orem, the UCI director writing on July 7, 2015 to NMS general manager Moses Kamabare.

Dr Orem at the time was quoted by this newspaper saying: “When going over invoice number 150601-011, delivered on June 2, 2015, my pharmacy team discovered that there was an outrageous pricing for the following items compared to the market price. This means that NMS is probably overcharging UCI at a mark-up above the stated 15 per cent or there is a fraud going on with the procurement system at NMS, which calls for a quick intervention.”

Mr Kamabare denied the accusations at the time of publishing the story on June 19. Mr Kamabare admitted the claims of over-pricing, but countered that it was a technical error by their system, which had been detected and was being rectified.

In his June 29 letter to Mr Muhakanizi, the 42-year-old Mugisha from Ntungamo District said he has a brother who has been diagnosed with cancer of the rectum (colorectical cancer) and for the last six months he and his family have lived, “a financially stressed life”. “We have sold off the land and a few properties of my brother, the patient to buy medicine to save his life. I have now come to learn that cancer has an enormous impact on the social fabric and economy of Uganda,” Mr Mugisha says in the letter which formed Mr Muhakanizi’s basis to institute the special audit.
Mr Mugisha says findings from his investigation essentially confirm what NTV and this newspaper exposed and what earlier investigations by this newspaper had revealed.

“What hit my mind is items as simple as granisetron, which I always buy at Shs22,000 for an ampoule (container) for my patient to stop vomiting, was supplied at Shs208,000. Another item which really hurt me because we used to buy in large amounts is the leucovorin which I bought at Shs11,000 per ampoule that was being supplied at Shs50,000,” he wrote in his three-page letter.

“NMS doesn’t only supply items at astronomical prices but also supplies substandard drugs with compromised quality hence compromising treatment outcomes. On interacting with several patients, I found that the institute used to register cancer survivors but now it can hardly do so due to poor patients’ adherence to treatment caused by anomalies in NSM supplies,” Mr Mugisha says.

During the interview for this story on Thursday, Mr Kamabare said: “ I have not been visited by the audit team and I don’t expect anyone. If they come, they will be looking for information which we shall avail to them.”
An analysis of the NMS price list compared to the market price for Pegylated liposomal Doxorubicin indicates the NMS was charging UCI Shs2,892,672 for 25 units of the drug as opposed to Sh377,000 in private pharmacies, making an excess pricing of Shs2.5m.

Ordinarily, NMS, which buys in bulk, would have its drugs at lower pricing at 15 per cent below the market price. For example, for drug zoladex 3.6mg/Goserelin 3.6mg, a 40 per cent discount is given if you buy 120 pieces and above, which would reduce the price from Shs318,900 to Shs191,340.

This newspaper also reported that in some cases there was no delivery of cancer drugs at all and a cost analysis of NMS supplies compared to the UCI annual budget indicated NMS spent Shs4.8 billion (arising from inflated prices) out of an expected Shs2.8 billion (had market rates been followed), causing a loss of Shs1.9 billion.

Comparing NMS pricing to the market price, the cancer institute would save close to Shs2 billion on cancer drugs if they made their own procurement.
There was also late and non-delivery of drugs. For instance out of 450 units expected by UCI monthly, there was no supply in September 2015, February, May and June this year. The same is true with Fluorouracil drug in September 2015, January, February, March, April, May and June 2016.

This means that for all these months, the patients on these drugs either had to go without treatment or had to buy from private pharmacies. Those who could not afford drugs from private pharmacies either died or their conditions deteriorated.

Mr Kamabare told this newspaper in June: “Whenever we fail to supply drugs, UCI knows why. We have engaged them and the National Drug Authority. We have advertised and failed to get a supplier for quality cancer drugs. Cancer drugs have to be of high quality, sometimes the delay is occasioned when UCI rejects or the drug is not registered.”

Audit team

The audit team comprises: Alice Nangoku-acting assistant commissioner internal audit, Perpetua Biraaro (acting principal internal auditor), Victor Karuragire and Paul Musimani (internal auditors).