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Delays in Clearing NHIS Debt Killing Pharmaceutical Companies


The Managing Director of Intravenous Infusions Limited, David Klutse, has called on the government to look for emergency funding for the National Health Insurance Scheme to enable it make prompt payment to its service providers.

This, according to Mr. Klutse, will help sustain the business of critical service providers in the health sector.

In an interview with Citi Business News, Mr. Klutse said the profitability and survival of pharmaceutical companies in the country are being affected by government’s continuous delay in payments for services rendered.

“We have a situation where in some parts of the country the delay is as long as one year. That obviously has a significant impact on our business operations. We’re owed over GHC 10 million and some of it is going back for over a year. When I go to the banks to borrow they don’t want to lend to you because they are not sure when NHIA is going to pay you, for you to pay them because of the uncertainty in the payment.”

Mr. Klutse acknowledged government’s efforts in trying to clear their debt and make frequent payments, but said the problem still persists.

“I think the present administration has been making huge strides in addressing the issues. But unfortunately, we are in an industry where everyday people in hospitals are using infusions.  Therefore unless there is an emergency funding to address the backlog and also tackle the current issues we are continually adding more to the debt. We are appealing to the government to treat our payment with some urgency.”

Mr. Klutse was speaking on the sidelines of the company’s Annual General Meeting.

The Annual General Meeting (AGM)

Intravenous Infusions Limited (IIL) announced at the AGM that it managed to increase its revenue by over 55% from 2016 (GHC 10.6 Million) to 2017 (GHC 16.4 Million).

The Chairman of the company, Issac Osei, in a speech read on his behalf stated that the operating performance had improved in the company’s two business units. This, the chairman said had contributed to increased cash generation.

The board of the company declared no dividend for 2017, which is in line with the three-year forecast given at the IPO stage (2015) for the company to return to declaring dividend in three years.

The Board will be considering the appropriate dividend policy for 2018 and beyond, during the course of the year.

Mr. Klutse attributed the success the company chalked in 2017 to a strategic review of the business which was undertaken to identify the key challenges to the company’s operational growth and profitability.

As a result, Intravenous Infusion renegotiated the credit terms with its key overseas suppliers to align closely its payables and receivables terms.

The company also undertook a comprehensive review of its plant and machinery, and significant progress has been made to replace the plant where necessary under the proceeds from the company’s private placement.

Mr. Osei stated that the company had been challenged with inadequate working capital due to challenges with the National Health Insurance Authority (NHIA) in making good its payment in a timely manner to the hospitals and other facilities.

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