A report released today by the Kenya Medical Practitioners, Pharmacists and Dentists Union (KMPDU) and the Centre for International Corporate Tax Accountability and Research (CICTAR) raises questions over how funding meant to improve Kenya’s health sector is being funnelled to European for-profit health corporations.
The report outlines how VAMED, an Austrian-based company and subsidiary of the German global health care giant Fresenius, has received millions of dollars in Kenyan government funding to supply equipment to Kenyan health facilities. VAMED’s contracts with the Kenyan government have added to Kenya’s crippling international debt while shifting scarce funding away from public health.
The report outlines how VAMED, an Austrian-based company and subsidiary of the German global health care giant Fresenius, has received millions of dollars in Kenyan government funding
Outside of Europe, VAMED’s international project business has operated in countries across the Global South. In Kenya VAMED’s projects focus on upgrading maternity units in county health facilities. Yet interviews with Kenyan county health officials raise significant questions over the suitability and quality of the equipment provided. One official said: “What they supplied initially didn’t work, brought another, didn’t work. We all started suspecting the equipment were not as high standard as we expected.”
Much of the equipment supplied did not meet expectations and may have been no longer sellable in European markets. Costs for such equipment have been taken from strained county health care budgets, without assessing public health needs in local communities. There is no public information, even for county health officials, on how the equipment supply contracts were negotiated. Another health official said “I can confirm that no one in [my] county knows the value of the project, how much was spent… or any of the particulars.”
In 2019, VAMED’s sister company Fresenius Medical Care admitted to a decade-long global pattern of bribery and corruption to win government contracts for medical equipment, including in Africa, and paid a settlement of over US$231 million to the US government under the Foreign Corrupt Practices Act (FCPA).
KMPDU General Secretary Dr Davji Atellah said: Instead of handing huge sums of cash to fuel the profits of scandal-ridden foreign corporations in shady deals, our Government should be investing in our front-line health workforce and delivering services to local communities.
Projects in Kenya were previously financed by the Austrian government with no apparent disclosure that it is a significant shareholder in VAMED. The UK Government’s Export Finance wing also provided taxpayer funded financing to VAMED’s UK subsidiary, with the stated goal of increasing “VAMED’s procurement from UK suppliers of healthcare equipment and services.” Current VAMED Projects in Kenya have been financed by the government of Finland and have involved the exclusive export of products from Finland, including doors.
CICTAR Report author Jason Ward said “European governments supporting these projects must be held to account on whether local health care objectives are being met or if it is merely focused on increasing exports from their domestic manufacturers.”
Atellah said “We demand a transparent investigation into who pushed for these contracts, who profited and if these public funds are really improving health outcomes for Kenyans.”
CICTAR sent a detailed list of allegations included in this report to Fresenius and offered an opportunity to respond and comment. The full written response from the Managing Directors of VAMED Engineering is available here