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NewsNew scheme drives state pharmaceuticals supplier localize half of Ethiopia’s demand

New scheme drives state pharmaceuticals supplier localize half of Ethiopia’s demand

Ethiopia’s sole state-run pharmaceutical supplier has rolled out a new plan that enables the nation slash pharmaceutical import by half, beginning this fiscal year.

Under the leadership of its Director General, Abdulkedir Gelgelo (MD), the Ethiopian Pharmaceutical Supply Service (EPSS) is looking forward to getting supplies of about 97 pharmaceutical items from local suppliers this year, nearly half of the 200 items it imports from abroad.

The decision to localize at least half of Ethiopia’s pharmaceutical consumption came after the Ministry of Finance passed a circular earlier this year, which allowed local manufacturers to ask for over half of their cost in foreign currencies.

Reports indicate that the share of local pharmaceutical suppliers in the nation’s consumption constitutes nearly 10 percent, the bulk being covered by import.

The new procurement scheme will enable local pharmaceutical manufacturing companies and suppliers to quote for up to 55 percent in foreign currencies, helping them get the hard currency needed for inputs. 

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After it was considered and approved last year, EPSS is now preparing to implement the scheme during the current fiscal year. Local manufacturers will sigh relief as they will propose majority of their cost in foreign currency to supply the Service, easing their foreign currency burden. Local pharmaceutical manufacturers have been operating with minimal capacity, as they lack the market before.

Abdulkedir is hopeful that the productivity of the manufacturers will increase with the big measure that became practical during the first quarter of the current fiscal year.

“We expect a huge improvement this year,” he told The Reporter. “It is just beginning now, with bidding processes underway. The local manufacturers and our Service have big hopes.”

Ethiopia shells out a huge chunk of foreign currency for the procurement of medical and pharmaceutical products every year. The country spends hundreds of millions of dollars annually on import of pharmaceuticals and medical supplies.

The government agency tasked with supplying pharmaceuticals and medical equipment takes the responsibility of availing the supplies to the federal health institutions and regional health bureaus as well as the private medical entities, through over a dozen of its branches.

However, the Service gets some of the major items, such as HIV medicines, Tuberculosis (TB), and malaria, free of charge from initiatives like The Global Fund. The Fund makes procurements of such medicines for two countries in Africa: Ethiopia and South Africa.

As a requirement from the funders and its own initiative, the Service puts in place a transparent procurement system that “focuses on the least price.”

The website-based electronic procurement system developed by the Service, is the continuation of the federal government’s e-procurement initiative. The Service was one of the first entities to come on board of the national initiative.

With the aim of digitizing all its services, beginning from procurement to finance and warehouse, Abdulkedir’s office is gearing up to launch a system dubbed Enterprise Resource Planning (ERP). “This system will create end-to-end feasibility for every product,” he said.

“It will bring a big breakthrough. Even the MPs will be notified of the progress on the distribution of medicines to their respective constituencies,” he told The Reporter.

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Video from Enat Bank Youtube Channel.

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