THE Reserve Bank of Zimbabwe (RBZ) will soon instigate investigations into pharmaceutical companies that demand foreign currency from clients yet would have received US dollars from the central bank to import drugs.
RBZ added it would also name and shame these pharmacies as they were cheating customers and the bank.
This comes after the Parliamentary Portfolio Committee on Health and Child Care chairperson, Dr Ruth Labode, urged the central bank to name and shame these pharmaceutical companies that were double dipping.
She claimed there was a pharmaceutical cartel that was benefiting by supplying drugs to pharmacies and charging forex yet RBZ would already have provided foreign currency for drug importation.
“When the RBZ said it gave US dollars to companies that manufacture cooking oil such as United Refineries we saw the product in the market but why are we not seeing those drugs from pharmaceutical companies. There is a pharmaceutical cartel I’m telling you, a serious one.
“They are actually pushing drugs to pharmacists in foreign currency and pharmacists are then going to the black market, buying foreign currency to buy the drugs from this cartel who would have received foreign currency from RBZ,” Dr Labode alleged.
The parliamentarian said this so called cartel would even produce invoices on the pretense that drug sales were made on a 1:1 market rate yet pharmacists would have spent more bond notes to acquire foreign currency.
“The cartel invoices those pharmacists and say you bought drugs for $10 000 as they refer to the 1:1 official rate between the bond and US dollars yet pharmacists would have gone to the black market, spent $30 000 bond notes to buy US$10 000. The pharmacists are then invoiced $10 000,” she said.
Dr Labode noted that such transactions were hard to tax and the Zimbabwe Revenue Authority (ZIMRA) was cheated on revenue.
“How will ZIMRA deal with that and who is going to be swallowed by the taxman in that case?”
Dr Labode said if the RBZ had indeed awarded pharmaceutical companies money, it was therefore puzzling as to why they were unable to manufacture cheap drugs.
“The RBZ applauded the recapitalisation of CAPS Holdings but my concern is I don’t know whether it’s performing or not. I’m curious as to how much money went into recapitalisation because all the drugs are sold in foreign currency and very expensive. If we do have an entity where we put our money, why is it unable to manufacture cheap drugs?” she asked.
She also called on the RBZ to name and shame companies that it had allocated foreign currency.
“Who did you give money, which pharmaceutical company did you give money in this time to actually reduce or import drugs cheaper as we are sitting here there is no company, there is nobody, selling in bond notes, all the drugs are sold in US dollars.
“I am asking you to name and shame, tell the country that so and so was given foreign currency to do this and we as the health parliamentary portfolio committee we will deal with the person,” Dr Labode emphasised.
In response, RBZ governor, Dr John Mangudya highlighted that what pharmaceuticals were doing was worrying because the idea was once they received foreign currency they were supposed to sell drugs to consumers at a 1:1 rate.
“The 1:1 rate is necessary for price stability because there are essential products we need to import. Our fuel is coming in and people are buying using RTGS, Eco cash at 1:1, your electricity is imported at 1:1 and yes the drugs are also imported 1:1,” he noted.
The RBZ governor said he knew that CAPS Holding had limited dossiers but had now increased drug production to 110, from the 70 they initially produced.
“Now they will produce more. The people who were given money include National Pharmaceutical Company of Zimbabwe (Natpharm), Pharmaceutical and Chemical Distributors Pvt Ltd (PCD), Datlabs… We have over 27 wholesalers in this country for pharmaceuticals, 600 pharmacists outlet retails in this country and seven companies that are producing drugs,” Dr Mangudya said.
He confirmed that as part of investigations, he would name and shame pharmaceuticals who had received foreign currency from the central bank.
“The minister of health was also trying to announce their names so we do provide the foreign currency and we become so concerned why drugs are sold in foreign currency when they receive the foreign currency,” said the RBZ governor, added he would also visit companies such as Datlabs for an appreciation.