Natpharm owed US$3,6m

the Parliamentary Portfolio Committee on Health and Child Welfare, the Health Ministry said it was not allocated adequate money by the Finance Ministry to offset the debt.

“Ministry of Health and Child Welfare is the biggest debtor but has not paid a significant amount of its debt,” reads part of the report.
According to the report, by September 2011 the only significant payment made was about US$940 333 for a 2008 debt.
However, this was not a full payment as the debt was US$1,4 million.
“The committee was informed that debt repayment by the Ministry of Health and Child Welfare will enable Natpharm to carry out limited re-stocking to allow a return to normal trading,” noted the committee.

Currently, the pharmaceutical company’s manufacturing capacity is only two percent as 98 percent of the drugs in their stocks are from donors, making it difficult for them to provide drugs for emergencies such as accidents or outbreaks.
The committee recommended that Natpharm be re-capitalised by Treasury, for it to fulfill its mandate.

The company needs US$65 million capital injection for re-capitalisation. In 2009, Natpharm was promised US$16 250 000 for recapitalisation in the national budget, but it was never disbursed.
The committee said because of limited stock supplies at Natpharm, public health institutions end up buying drugs from middle-men or the private sector at exorbitant costs.

Natpharm has also accumulated debts to other utilities such as Zesa, Tel One and City of Harare amounting to US$400 000.
In an effort to generate revenue, the committee said Natpharm has re-positioned itself as a storage and distribution facility for some donors who agreed to pay handling fees.

“Natpharm has recorded losses for two successive financial years, which has prompted the auditors to seriously question its viability as a company.
“The pharmaceutical company requires significant capital injection to restore its long term viability and to safeguard the country’s health delivery system,” said the committee.

The core business of the company is to ensure the availability of safe, effective and affordable medical supplies to public health institutions, including missions, and uniformed forces.