Home » Business » Donated Drugs Leave Caps in Intensive Care

CAPS Pharmaceuticals has registered a drastic decline in demand for its products due to increased direct external donor support for public health institutions, an official said.

As a result, the company, whose biggest customers are public health institutions, is operating at around 20 percent of its potential with little hope of increasing capacity if the situation remains the same, CAPS general manager Mr Justice Mujaka said.

CAPS Pharmaceuticals, alongside QV Pharmacies, ST Anne’s Hospital and Geddes are subsidiaries of CAPS Holdings Ltd, once listed on the Zimbabwe Stock Exchange.

“Our issue is not capital at all,” Mr Mujaka said yesterday. “Between 80 and 90 percent of our products are consumed by the public health institutions and are funded from the fiscus. But due to well documented challenges facing the Treasury, the drugs are being donated and we are not getting any orders from NatPharm.

“The donors are not supporting local companies and this has crippled the industry.”

The National Pharmaceutical Company is the State-appointed agent for procurement, storage and distribution of medical supplies to public health institutions.

The organisation procures in bulk, for more than 1 450 health institutions around the country.

Mr Mujaka said the problems affecting not only CAPS, but the entire industry, were to do with low orders from public health institutions. “Even if we are to get $20 million today that will not result in any improvement in performance,” said Mr Mujaka.

He added that the company was processing “a substantial order from the National Aids Council” which has kept the company afloat. It also producing some over the counter products for the private market mainly supermarkets and pharmacies. But the orders are not sufficient to sustain the company or the pharmaceutical industry at large.

The NAC order is likely to be fulfilled by end of February next year, Mr Mujaka said.

Mr Mujaka said the export market was also not performing due to uncompetiveness of locally produced drugs. For instance, drug exports to South Africa are required to be transported by air but products from SA enter through Beitbridge.

“That South African policy has effectively shut that market for Zimbabwean products in the sense that transporting the products by air will make them very expensive.

“The only active market that we have is Botswana and Zambia but we are moving very small volumes. We used to supply Malawi and Tanzania but because our overheads are high, competing in those foreign markets is quite difficult,” said Mr Mujaka.

CAPS which currently employs 220 employees once auctioned for $1,5 million after FBC Bank, which is owed by the company initiated the asset sale to recover its money. The company, however successfully challenged the sale and it was set aside by the High Court.

The company is currently saddled with debts amounting to over $9 million and the biggest, creditor owed about $7 million.

Source : The Herald

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