Lack of stock controls in hospitals is costing the state millions, writes Aspasia Karras
A state-employed pharmacist in KwaZulu- Natal was almost killed last month by an armed gunman, in an attack that has been linked to the measures instituted by the provincial health department to curb the theft of pharmaceuticals from government stocks.
As 10% of the annual health budget, about R2-billion, is spent on purchasing medicines, this is the second largest recurrent cost after salaries. Various investigations have revealed that the estimated cost of theft to the government ranges anywhere from R50-million to R1-billion a year, says Bhada Pharasi, chief director of medicines registration, regulation and procurement, in the Health Department.
“It is clear that this cannot be through petty pilferage by hospital workers. It’s obviously syndicate related, and there is clearly collusion between people employed in pharmaceuticals companies and people working in the public sector.”
Captain Daan Davis of the South African Police Services, who has been a key investigator into pharmaceuticals theft, explains that the ratio between private and public sector theft cannot be accurately determined.
“The problem is that no one can tell us the difference between private stock and government stock. It is not identifiable when it leaves the manufacturers and enters the market, so if it is stolen nobody can tell us where it was directed to. More critically, when you have parallel importing, and criminals buy medicine that has already expired, they simply replace the packaging and nobody can tell us where it came from.”
Andrew Gray, a lecturer in the department of pharmacy at the University of Durban- Westville, is categorical: “It would be expected that such a large budget component would be subject to stringent controls, be well-managed and accounted for. The mere fact that the losses cannot be pinpointed with more accuracy tells its own story. No figure claimed by any constituency can be challenged – the government simply does not know the scale of the problem and cannot find out.”
Which is why since July last year the Minister of Health Dr Nkosasana Zuma has been trying to get the National Drug Policy off the ground and to pass related regulations through Parliament, a process that has drug manufacturers up in arms. One of their key objections focused on the proposals to adopt “Vericode”, a multi- dimensional digital marking system that would track the approximately 18-billion packets and bottles of medicine made annually from manufacturer to dispenser. At a cost of 2c per unit, the system, which is used by NASA to identify and track space shuttle parts, would cost manufacturers R36-million per year – a high price for a very high-tech solution.
Pharasi explains that in response to the uproar, the Department of Health established a task team with the heads of the pharmaceutical industry to investigate less costly systems. In December they produced a preliminary report outlining other possibilities, such as bar-coding every individual packet.
The department is now going ahead with a pilot implementation project. Some companies, such as International Healthcare Distributors, are already using a batch tracking system to monitor each item. But according to Pharasi, although the department has written to more than 100 leading manufacturers about the different proposals, “not much feedback has been received”.
Captain Davis explains that given the current system manufacturers are using, “of 1 008 packages they can only recover 70 packages. And prosecutors decline to prosecute, because there is no proof that these are stolen items.”
Pharasi concurs: “The justice system presents a problem. According to what the police say, if someone is found in possession of medicines that are clearly in bulk and unaccounted for, the onus falls on the government to prove that the person stole the medicines, not on the person to show where the medicine came from. Round tripping is even more confusing, where dubious wholesalers sell stolen medicines to a second wholesaler, who then sells to a third. Without a tracking system it is very difficult to secure convictions.”
Captain Davis says most of the medicines are stolen before they reach the government. Pharasi explains: “The theft of medicine happens fraudulently – the bulk happens before, which accounts for much more than is stolen in the hospitals and depots themselves. Provinces are trying to put measures in place, but clearly they are up against a very sophisticated and very lucrative operation.”
But, argues Gray, who has personal experience of state hospital dispensaries, “it does not help the situation when there are no accounting mechanisms in the hospitals themselves. Medicine handling in the state sector enjoys none of the technological support considered so essential to proper accounting in private sector settings.”
Gray explains that this lack of proper accounting is probably due to the manner in which previous health administrations ignored much of the law regarding medicine use. “The Medicines and Related Substances Control Act of 1965 prescribes the nature of the records that must be kept whenever a prescription is dispensed – but this section was blithely ignored in the state sector.”
The Amendment Bill currently before Parliament expressly states that the Act will be applicable to the state, and provinces have started to implement monitoring mechanisms. State depot security is being tightened up; the Northern Province is now accounting for each pill and tablet, and almost each province is tendering for computer systems that will go a long way to alleviate some of the problems.
Grey concludes: “It is to be hoped that the simple things will be done first; before turning to the high-tech, high-cost interventions, a system to document and hence account for medicines issued in state facilities is critical. The taxpayers deserve to know more than mere thumb-suck estimates of losses varying by hundreds of millions of rands.”