Behind the Medicines Shortage in Nepal: Greedy Suppliers and Friendly Officials

Fortunes are being built in times of war. Or during economical blockades. In Nepal people get filthy rich on petrol and gas smuggling. It is bad. Still Nepali society will give them easy pass. But what about people, who get rich on creating medicines shortage? When patients suffer and die due to lack of life saving drugs? Here we explain how they are doing it. And we name some names.

Medicines shortage. Why you would even care about it? It is not your problem anyway. Unless your grandmother collapses in the kitchen, fells unconscious on the floor and you run your guts out to the nearest hospital, cry for help in the Emergency Room rushing doctors for help.

They look strangely at you, they do nothing. They do not have life saving medicines — Injectables like atropine, adrenaline, which could save your grandmother. Or you mother, your farther, your sister, your brother. Your child get hits in an accident. Suddenly the lives of the dearest people in your life, vanish.

The rage

Now you fume with rage. Need to blame someone, don’t you? The blockade, Madhesi morcha. They shot themselves in the foot not allowing medicines to enter the country. Are they the only ones to blame? How come there are traffic jams in Kathmandu, if there is a strict blockade? How come restaurants and hotels reopening in scores? Is the blockade real or phantom? Or does it have a very real price tag attached to it?

You know the answer. You pay Nrs 350 for petrol, Nrs 6000 for a LPG cylinder. You bleed, but you pay. You will pay for medicines too. Three, four, five, even ten times more than usual, but you will not bargain, my friend. Your mom has diabetes, and dad has blood pressure. Your child is sick.

They want you to pay and they will make you pay. They will look straight into your eyes with that tiny smirk. They know you are desperate. You will pay with a polite ‘thank you’ while handling the money.

Frankly, you are very lucky, if you are only forced by those vultures to pay on the black market. But what if you rush to hospital with your grandmother, your father, your child and they don’t have a drug which will save their lives? You are not carrying a vial of adrenaline in your back pocket, are you?

‘Shortage’

Some folks are on track to be filthy rich over the dead bodies of poor Nepali people because they are capable of creating a “shortage”. A shortage is created when supply cannot meet the demand, thus lots of money chasing the same medication and supplies.

There is a price ceiling in drugs imposed by the Government, so price can’t be hiked up in regular market, but it hikes up many folds in the black market. So when the prices are high on the black market, there is more incentive to create “shortage” in the regular market.

Setting aside the patient side of the story (your grandmother, your father, your sick child), factually, here is how one can determine whether there is actual shortage of materials. While Nepal side is slow in everything, Nepal’s dear neighbor India has data on Nepal that it sells. Here is one of such sites that sells the data on India’s export. If one were to look up via HS code for each medication that are in “shortage” you will find that the amount of export from India has been massive.

Another such site is Zauba. Do a year over year comparison or ask hospitals in Nepal what their annual consumption is and you will find, the import levels have not dropped off the cliff.

So why are patients not finding essential drugs in pharmacies? Another source of the same data would have been the custom’s data from various ports of Nepal — but good luck trying to get hold of such data.

Mountains of lies

Key players of this market are Government authorities, especially those who can make or break someone’s business, hospitals, and naturally big importers.

They all contradicting themselves. One day they are saying there is a severe shortage, to say next day with straight face there is no problem at all.

Check out this extremely short piece by Al-Jazeera.

In this report doctor from Intensive Care Unit is simply saying there is shortage of resuscitating drugs. UNICEF warns that health posts in the country have less than 50% of the required amount of drugs. Including child vaccines!

Strangely the Director General of Department of Drug Administration — Bal Krishna Khakurel — claims all hospitals are comfortable with their stock. Governmental officials say all needed drugs has been sent to hospitals and have stock for a month.

When first reports about shortage emerged in media, Ministry of Health on 18th November announced that medicines will be available within a week. Then two days later few public hospitals directors rubbished reports of shortage. Among them Dr Swayam Prakash Pandit, director of Bir Hospital, who said:

“We have not yet run out of essential medicines and we don’t need to panic as the government has already announced to supply us adequate medicines soon.”

Conveniently author of that report didn’t asked or didn’t mention Teaching Hospital position on the crisis. Only recently that hospital became comfortable with their injectables stock for a month — only after hospital got some essential drugs via private donors, not official channel.

Whom should we believe? Medical doctors, Teaching Hospital actions (which accepted life saving drugs) and patients paying for drugs in black market or Nepali Government, which claims there is no shortage, no emergency, no need to worry?

To add confusion in Al-Jazeera report Ram Janam Chudhari, Nepali Health Minister, says suppliers protect their profit margin, thus creating shortage. Yet hasn’t cracked down on those suppliers. We ask why? What is the delay?

Medical directors from various hospitals have time and again claimed there is NO shortage per se, but surprisingly they have provided the list of drugs that are in low stock or could become out of stock if the unofficial blockade situation continues.

This was the same list that was used by the Government when the Non-Resident Nepali Association (NRNA) wanted to provide help.

You must wonder why then such data was not published and a broader support sought?

Let’s be open here, let’s throw some key names from Government side and then name some suppliers. Government officials swore to serve us, to protect Nepali people. So let’s hold them accountable for what they do or what they refrain from doing. They boldly say that their hands are tied up by the system, by the law.

The system

Government Hospitals procure medical items via tendering system and they cannot purchase out of the tendering procedure. It might seem like hospitals are helpless in helping patients during the shortage. But tendering procedure was not built to break. There are provisions in the tendering system that enables the hospital to go back to the bids and select from non-winning bids. The difference between the prices is then paid by the defaulting bidder who initially won

Suppose Company X quoted Nrs 10 for each unit of Adrenaline, Company Y quoted Nrs 12 for the same. Simple price driven bidding process requires the hospital to select Company X as the supplier. However, suppose due to the blockade Company X is now unable to provide at the said price, the hospital can actually request Company Y to supply. If Company Y agrees, the difference of Nrs 2 has to be paid by Company X (the original tender winner) to the hospital.

The big question that comes up is — why did hospitals not seek to find alternative suppliers when it had provisions to do so?

Is tendering won just by the prices quoted or because of internal economics between hospital’s procurement department and the competing companies?

The cry for help seems to exist to protect the under the table contracts over the suffering bodies of the patients.

Beloved Government

Let us define key players in the behemoth entity called the Government of Nepal.

It falls square in the Ministry of Health, in particular the Department of Drug Administration — Bal Krishna Khakurel who has the authority to provide special import license to importers to ‘ease’ the situation and someone who sits squarely on allowing or not allowing someone to import certain drug. He is also the task force lead to resolve the medical crisis situation.

Firstly, whether there is actual shortage or not, there is a strange hesitation to resolve the issue in a fair and transparent manner.

The list of drugs and supplies that are in ‘shortage’ have not yet been published. There has been no open tender issued to see how private sector can resolve the medical crisis or Nepal’s favorite donor community can engage to ease the situation.

Secondly, special import provisions are being granted without clarity who qualifies and who doesn’t qualify. There seems to be a concerted effort to keep the broader public in dark on what’s happening, not investigate the actual volume of stock that is in the market, not crack down on the medical black marketing and finally to use the “shortage” as the criteria to grant special permission — a fast track to becoming rich.

Cui bono?

Who benefits? Nepali pharmacy market is a monopolistic market. Few suppliers make up huge chuck of the market. The name that keep coming up seems indicate YetiChem and DK Pharma as the two elephants that muscle around small players. Also, guess from whom NRNA procured the drugs for donation? From YetiChem.

The saddest part of the story is while people are on track to become rich and plan their retirement, poor suffer. People are paying few folds of maximum retail price quoted.

Dear media

We hope that this blog post will finally push some investigative journalist with enough guts and dedication to pick this story up and fight on behalf of patients. For common good. For us.

People are still deceived into thinking that only India is creating a blockade and thus everything is India’s fault. No, it is our fault, Nepalese people fault. We, the society, decent entrepreneurs and especially media, let government officials hand in hand with suppliers and medical hospital procurement offices play the puppet show for the patients.

We are letting them behind the smoke screen cash in on Nepali sentiments, cash in on poor people life savings’ and cash in on patients’ lives.