What's behind the critical medicine shortage?
Payment delays, regulatory hurdles and price caps.
Artwork: Dosain
23 Feb, 4:00 PM
Last week, we published an in-depth investigation into the growing medicine shortage crisis, uncovering a complex web of factors from payment delays crippling the supply chain to regulatory hurdles that pose challenges to serving a small market. For those of you who had some sort of frightening experience with Balzac as a kid (guess the TV show reference to win a prize), here are the salient points.
How bad is it?
Severe. Patients with chronic illnesses are unable to access life-saving drugs. The main public hospital in Malé is running short of basic supplies like IV saline. Conditions are worse on other islands. The IGMH psych ward was at full capacity as medication disruptions led to increased hospitalisations.
How are people coping?
By posting desperate pleas on social media or asking contacts abroad to bring medicines.
How long has this been going on?
Doctors say about a year. But the situation worsened over the last couple of months.
What’s causing it?
We identified three main reasons.
The Aasandha health insurance owes millions in delayed payments to pharmacies and hospitals. ADK alone has been waiting for MVR 250 million (US$ 16 million) since October 2023. The cash crunch has disrupted the entire supply chain.
Challenges posed by the small market size. Manufacturers require minimum orders far exceeding what Maldives can sell before medicines expire.
After recent price controls imposed by Aasandha capped prices on 250 common medications, wholesale prices now exceed the maximum retail price in some cases.
How are Aasandha arrears to blame?
Payment delays caused a domino effect. Hospitals and pharmacies are unable to pay importers, who in turn are unable to pay manufacturers, which makes it impossible to import new stocks or maintain a steady supply.
What was the impact of the price caps?
Negligible. The price caps were intended to save MVR 220 million. The impact was limited to a few instances where the Aasandha prices were lower than wholesale rates.
What was the blame game about?
STO, the state-owned importer, accused doctors of writing prescriptions with specific brand names instead of generic ones (a generic drug can be available under multiple different brand names), which made it difficult to fill prescriptions. But the Medical Association insisted that doctors issue prescriptions “in alignment with Aasandha policy.”
Prescriptions are filled through an online portal in which medicine can only be selected from a drop-down list based on an Aasandha database, doctors explained. The exceptional cases where doctors do prescribe specific brands have not affected availability, they said.
Is price gouging a problem?
Some drugs are sold with a markup as high as 200 percent, regulatory officials confirmed.
Pharmaceuticals cost significantly more than neighbouring countries with similar income levels, according to the World Health Organisation. The average cost of medicine is 15 to 70 times higher than international benchmarks, a 2022 World Bank report found.
But comparisons to neighbouring India and Sri Lanka are unfair as both have production facilities, whereas the Maldives imports 100 percent of medicine.
The small size of the population at just half a million compounds elevated logistical and import costs. Local importers are unable to meet minimum order quantities set by manufacturers as the Maldives lacks the market for specialised drugs used to treat chronic illnesses. But this does not affect widely-used medicine like paracetamol.
A combination of these factors drives up prices in the Maldives pharmaceutical market.
What is being done to address the crisis?
The President’s Office announced a host of measures. The quick fixes include opening up the STO medicine stock for doctors to check available options, setting up a parallel system for the public to track availability, and STO partnering with Aasandha-approved foreign hospitals for direct sourcing.
But the proposed solutions do not address the underlying cashflow problems as fiscal reforms remain stalled.
In the long-term, a UNDP bulk procurement programme offers more promise. It could make it easier and cheaper to buy high-quality medicine by pooling resources from 33 small nations. Bulk procurement could solve the problems of scale such as minimum order quantities. STO is already sourcing 10 medicines through this system. But it could take years to cover all essential medicines, according to experts.
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