The Ministry of Health (MoH) has signed a Memorandum of Understanding (MoU) with some 16 selected pharmaceutical companies to ensure the implementation of the scrapping of Value Added Tax (VAT) on some essential medicines in the country.
The MoH having entered into the MoU together with each regional health administration and teaching hospital, would then give framework contracts to the successful suppliers.
The removal of the 17.5 per cent VAT on such category of medicines completes a promise by Finance Minister, Ken Ofori - Atta.
This means the price of the selected medicines will go down by 30 percent.
Under the framework contracting, no contract exists until an entity issues an order or “call off’ against a framework agreement.
In view of the framework contracts 54 essential medicines from the selected pharmaceutical companies shall be excluded from any procurement process to be undertaken by these institutions.
Minister of Health, Mr Kwaku Agyemang Manu in his brief remarks after the signing ceremony, indicated that this method saves time, has a faster processing time, reduced paper work because prices and terms would be settled in advance.
“There are also advantages of lower administrative costs, scarcities of drug, less need for entities to carry inventory and most importantly economies of scale benefits from bulk purchase” he stated
He noted the signing of procurement framework of supply chain or the contracting framework was part of some decisions to streamline the procurements of medicines in the country after the fire outbreak at Tema Central Medical stores.
The minister explained the contract means that subsequently hospital get supplies of medicines as quickly as possible and “that would go a long way to sustain the National Health Insurance Scheme”.
He said under the MoU, the MoH would have the opportunity to receive constant supply of medicines to the various health facilities after the initial supply of same medicines without going through any further procurement processes
The Ministry of Health in collaboration with other stakeholders in October 2017 launched the tender for the procurement of essential medicines through framework contracting as part of the ministry’s efforts to improve efficiency in the entire health sector supply chain.
The Ministry has completed the tendering process and consequently received the Central Tender Review Committee Approval for award of contract for the supply of various essential medicines under the framework contracting by the16 companies.