Parliament has approved a report of the Public Accounts Committee (PAC) with strong recommendations against the National Medical Stores (NMS) which has been faulted for inflating prices for essential medicine and also failing on contractual obligations.
Established as a Statutory Corporation in 1993 by Act of Parliament, NMS is mandated to Procure, Stores and Distribute Essential Medicines and Medical Supplies to all Public Health Facilities in the Country. On top of this mandate, the NMS was in 2012 added another responsibility to the distribute Vaccines across the country.
In a report presented to Parliament yesterday by PAC Chairperson Nathan Nandala Mafabi, the MPs recommended that NMS be deprived of the mandate to procure drugs for health facilities so that they are able to buy from other cheaper sources.
This after the report from oversight committee’s scrutiny of Auditor General’s report on NMS for 2016/17, 2017/18 and 2018/19 Financial years, found that the entity has been selling drugs to hospitals and health facilities at highly inflated prices.
According to the committee, this should stop because the NMS has been providing to health facilities the indicative figures for essential drugs and medicines after the budget has been approved in order to fleece the health facilities. The MPs found that most of the private hospitals have shunned buying from the government entity and instead take money to Joint Medical Stores because there the prices of drugs are cheaper.
“Monopoly of National Medical Stores should be stopped because it is overcharging hospitals and health units. Indicative prices of Medicines should be provided to users to assist them to determine the usage of their vote allocation” reads part of the PAC recommendations.
Parliament also approved the committee recommendation to government to create another institution to be charged with the destruction of expired drugs following findings that the NMS has also been doing it at a high cost charged on the health facilities despite having made the supplies to them late.
Cash issues
Parliament also demanded that the Auditor General carries out a forensic audit on the NMS concerning the supply of uniform to the Ministry of Health after it found that it failed to deliver on its contractual obligation worth UGX13.3 billion. The committee reported that the money was diverted by NMS which later on delivered some uniforms that were undersize hence causing a loss of government funds.
The committee investigations found that by 30th June, 2019, the Ministry of Health had only received delivery of uniforms worth UGX8.37 billion. However, these deliveries were not easily verified by the Internal Auditor General because there was no accountability.
MPs were surprised to learn that also the uniforms delivered by NMS were not fitting the description and colours that were ordered for in the contract offer by the Ministry of Health. Cited in the report include; lack of measurements for the staff before uniforms were tailored; wrong colour for nursing clothes; and, dresses instead of surgical courts in some health facilities.
Also on misappropriation of funds, the NMS is faulted for contracting a hooping UGX350 billion debt on behalf of regional referral hospitals and health units for essential medicines and supplies without their knowledge.
Tax Appeals Tribunal resolves 146 disputes, unlocks UGX203bn in first half of 2025/26“That when the Committee sought to know how this debt was incurred, NMS quickly adjusted the accounts to state it as only UGX11 billion. The Committee wondered if it had not inquired this means NMS was going to pay for air supply or just steal money on behalf of health units” the report reads in part.
Thus the committee recommended on this issue that; “the Ministry of Finance, Planning and Economic Development should carry out a Forensic Audit on NMS debt before any payment is done. NMS should provide the authority from Health Units which lead to contract this debt on their behalf”
PAC also recommended that Health Minister Dr Jane Ruth Aceng should be investigated in her role in defending the NMS not the loss making Health Units during her appearance before the Committee, hence also raising it as a case of poor performance for which she should be held liable.
Sarah Opendi, the State Minister for Minerals who was in charge of Health General Duties at the time when NMS was contracted to procure uniforms for the Ministry of Health Staff tried to convince Parliament on not having the health units procure medicine on their own.
“We are the ones who insisted that this money should go to the NMS. There were bigger problems at the Ministry and this may not be the right decision to revert this to the Ministry to procure uniforms. Will these hospital be able to procure the medicines and utilise all the money that is sent to them? We all know that the NMS has been sending medicine but you are aware that some of the health workers have been taking the medicine to their pharmacies” said Opendi.
What they said
After the PAC report was presented, MPs rose to the occasion condemning the way the NMS has been operating over the years.
Bugiri District Woman MP Agnes Taaka suggested that by the findings of the PAC, the government should consider NMS for merging so that it becomes a department under the Ministry of Health.
“I want to suggest to government that NMS be one of the first entities to be merged under ministry of health. The independence to procure has given NMS the monopoly to supply drugs. We have made them the sole supplier of drugs” she noted.
Kajara County MP Michael Timuzigu told Parliament that health facilities in Ntungamo District did not receive drugs from NMS between August and December 2020 despite paying.
