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26.09.2022 Article

The Drug Revolving Fund in Ghana, a Pseudo, or an Objective Reality?

By Adelaide Setordji
The Drug Revolving Fund in Ghana, a Pseudo, or an Objective Reality?
26.09.2022 LISTEN

Cost sharing measures have been introduced into the health and education sectors as part of Ghana’s economic reforms which began in 1983. Under the cost recovery legislation for the health sector, fees differ by type or clinical level of facility, treatment location, age, nationality, and type of service provided (Asenso-Okyere 1995). There is full cost recovery for drugs or medicines in all public health facilities in the country.

Global and local initiatives

Supply of essential medicines especially at the primary level of health facilities is one of the fundamental reasons for the Primary Health Care (PHC) initiative which was declared in 1978 and popularly known as the Alma-Ata declaration of 1978. Member countries declared to make all essential services accessible at the community level at a cost the country can afford with methods that are practical, scientifically sound and socially acceptable.

In tandem with the Alma-Ata Declaration, the Government of Ghana introduced the Community-Based Health Planning and Services concept as a key strategy of primary healthcare delivery for the ultimate benefit of hard-to-reach areas in the country.

Several other global declarations and initiatives including but not limited to the 1987 Bamako Initiative, the 2000 Millennium Development Goals and the 2015 Sustainable Development Goals and the Universal Health Coverage (UHC) concept were launched with the aim of ensuring that health care is accessible at the grass root levels. Supply of essential medicines has been key on the agenda because without them, curative care given at health facilities will be incomplete.

The UHC concept, for example, is meant to ensure that all people have geographical and financial access to the health services they need, when and where they need it. It is a people-centered initiative to achieve health for all, knowing that at least half of the people worldwide are unable to receive the health services they need.

Overall, these programmes were aimed at improving quality of life and general health outcomes which have an impact on a country’s growth not to talk of averting Catastrophic Health Expenditure (CHE) to already impoverished households which according to the World Health organization (WHO) is an Out Of Pocket (OOP) expenditure, which is greater than or equal to 40% of a House Hold’s (HH) non-subsistence income, that is, income available after basic needs have been met.

Surveys in 89 countries covering 89% of the world’s population, suggested that 150 million people globally suffer financial catastrophes every year due to OOP medical cost and several factors account for this (Liu et al, 2019).

Why the drug revolving fund?

A drug revolving fund is a scheme where drugs are sold at cost-prices, plus a mark-up, and the revenue is used to replenish the drug stocks.

In Ghana, the Drug Revolving Fund (DRF) was introduced as a result of frequent shortages of drugs, purchasing of drugs at exorbitant prices, lumping of proceeds of the funds into a general account, poor management, misappropriation of funds, irrational use of medicines, non-reimbursement of the cost of drugs for exempted patients among other challenges.

This led to Ghana’s introduction of the national drug revolving fund scheme known as the “cash and carry” in 1990 which was piloted in Greater Accra and Volta Regions and extended nationwide in 1992 (Asenso-Okyere et al, 1999).

The global inclination is that this approach of ensuring constant supply of essential medicines has continuously been used in many low- and middle-income countries to establish a user financed system which seeks to establish and sustain the essential drug supply and to provide all public health facilities with adequate and safe drugs at affordable prices. It was also introduced to maintain a regular supply of medicines compared with a non-revolving drug fund, maintain an appreciable stock of tracer medicines, improve geographical access to medicines and the need to meet operating expenses.

Drug Revolving Fund in Retrospect

In Ghana, the Ministry of Finance and Economic Planning (MFEP) provided the initial seed capital in terms of free drugs through the Central Medical Stores (CMS) to the government health care system. Accordingly, individual health facilities were expected to sell the drugs to patients and use the proceeds to procure more drugs under a revolving fund scheme, hence since 1992, government did not provide much funding for drug purchases except for exemptions.

The introduction of the Drug Revolving Fund resulted in improvement in the availability of essential medicines nationwide except the ongoing implementation of the Framework Contract Policy in the public sector whereby health facilities can procure about 66 medicines from the Regional Medical Stores only tend to create artificial shortage of certain essential medicines in the public hospitals any time the RMS does not have stock of those medications.

Challenges that threaten the Drug Revolving Fund

Several factors threaten to frustrate the efforts of managers to provide essential medicines including tracer medicines to clients who visit their various public health facilities in Ghana and if care is not taken, even National Health Insurance (NHI) card holders will buy drugs out of pocket even including drugs covered under the Health Insurance.

Firstly, the importance of the National Health Insurance which was introduced in 2003 to mitigate the cost of health care and increase financial access to health cannot be over emphasized. However, the operations of the scheme inadvertently lead to delays in release of funds to enable the health facilities procure drugs due to late reimbursement for services already provided to its clients.

Currently, the National Health Insurance Authority (NHIA) is indebted to facilities since January, 2022. Per regulation, the reimbursement period for any claim submitted should be within 90 days. All things being equal, health facilities should have been paid up to at least May, 2022 but that is not the case.

Another way facilities are losing money through the NHI which can frustrate the DRF is the rejection of claims submitted by facilities for vetting and reimbursement. Among other things, the Scheme cites the following reasons for rejecting claims; treatment or medicines billed did not match diagnoses stated on the claim form, unclear diagnoses, wrong application of tariff, treatment diagnoses mismatch just to mention a few, a phenomenon which has generated a lot of debate even among clinicians.

Yet another way facilities lose monies meant for the DRF is unrealistic medicine prices. Anecdotal evidence indicates that Inj. Hydralazine hydrochloride, a drug which is crucial in maternal healthcare delivery, is purchased on the open market between Gh₵34 and Gh₵40. However, NHIA reimburses Gh₵26 and even this will be paid after several months by which time the money has devalued even further, forcing managers to do magic to sustain the DRF.

Secondly, rising overhead cost/recurrent expenditure is affecting the management of the DRF, in that, the little returns realized from markups by facilities is not enough to meet the growing demands of pharmacy- related activities including carrying out operational research, maintaining an effective Drugs and Therapeutic Committee (the Committee responsible for ensuring Rational Use of Medicines among others).

Thirdly, frequent and avoidable emergency purchases, a phenomenon that connotes stockout situations due to lack of adequate funds to replenish drugs.

Lastly, inadequate human resource, a burden on Internally Generated Fund (IGF). Due to the inability of the Service (Ghana Health Service) to meet the human resource needs of every Profession due to various germane factors, certain services like janitorial, security and catering have been outsourced in some hospitals. Other cadres who are also in short supply are engaged as temporary or locum staff to complement the efforts of mechanized staff. This poses a big challenge for facility managers where a huge chunk of IGF is paid as compensation to these non-mechanized staff. These monies could have been channeled to improving quality service and increase tracer drugs availability and provision of essential medicines.

To this end, one is left with no question other than the caption of this piece which I hereby repeat perhaps in a lengthier manner, is the Drug Revolving Fund in Ghana, a pseudo reality, or an objective reality?

Conclusion

In conclusion, the importance of the DRF cannot be over emphasized. It will be sad for a client to arrive at a health facility and be attended to by clinicians/healthcare providers but cannot access drugs. That begs the question, what is the curative use of clinicians/healthcare providers if after all the expert care they give there is no drug available at the hospital dispensary to complement their therapeutic efforts, a situation that ought to be avoided especially in emergency situations.

I hereby call on Dr. Bernard Oko Boye, the new CEO of National Health Authority, to take a second look at the NHI tariffs even though there were some upward adjustments, which the current economic situation has swallowed. I humbly call on him to also reimburse facilities up to June 2022 to enable them pay debts owed Regional Medical Stores of GHS and the huge debts owed other suppliers to avoid what I refer to as “pseudo shortage of drugs” by pharmaceutical companies where your ability to honour your debt as they fall due earns you supply of drugs or vice versa.

I also call on health facility managers of the GHS to adhere strictly to guidelines by the Service in the use of the DRF, simply known as the IGF- Drug Account including maintaining a functional and useful DTC, a vibrant Vetting Committee to avert or reduce claims rejection to the barest minimum.

Adelaide Setordji

Health Service Administrator

[email protected]

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