Uganda pharmaceutical manufacturers welcome new drug fees

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OPINION

By Rishi Vadodaria

A few weeks ago, the National Drug Authority (NDA) published new pharmaceutical fees, and what has caught the attention of several industry stakeholders (especially importers of pharmaceutical products) is the revised import verification fees for 37 selected medicines, which have been increased from 12 % to 17%.

As emphasised by NDA, the 37 targeted products are those which the local pharmaceutical companies (under the association I chair) have demonstrated the capacity to produce these drugs to meet more of our local demand. 

It is clear that this regulatory measure should be welcomed by any patriot as it is intended to further consolidate support and drive investment in local manufacturing of these medicines, based on evidence of the positive implications of boosting local manufacturing capacity.

What should also be noted is that NDA has clearly outlined that the new increment does not affect products produced in East Africa and imported into Uganda due to our East African medicines harmonisation policy.

I remember in September 2014, the Government of Uganda, under the Buy Uganda Build Uganda (BUBU), identified pharmaceutical manufacturing as one of the crucial sectors that could benefit from targeted incentives that could drive import substitution under the policy, and most of us have been investing heavily to increase our manufacturing capacity under the strict but helpful control of NDA.

We have reached commendable levels where some of our products go beyond satisfying local demand to exporting some of the surplus, just from our members. Uganda now exports pharmaceuticals worth over $10 million every month! Why would anyone not want to protect such a sector?

In July 2017, when NDA increased import verification fees targeted to support local pharmaceutical manufacturers and enhance import substitution and competitiveness of local manufacturing pursuant to the BUBU policy from 2% to 12% for the same 37 products, several players in pharmaceutical importation made similar claims that this was going to cause drug scarcity and crisis.

However, a study conducted in 2023 to evaluate the impact of the increase in verification fees on the local production capacity of the selected medicines in Uganda showed that overall local pharmaceutical production capacity increased by 8.2% between 2017 and 2020.

The most significant growth was observed in the production of Tablets (125%), capsules (100.6%), and oral liquids (170.8%), alongside notable expansions in manufacturing infrastructure, including installed compression and Blow–Fill–Seal (BFS) machines, which increased by 14.7% and 27.7%, respectively.

Employment across the six studied industries rose by 42% on average, indicating substantial investment and capacity enhancement within the sector following the 2017 policy change. The report of this study was published in the Journal of Pharmaceutical Policy and Practice (2023) 16:51 and can be referenced.

Our over-55 members I lead, hail this news as a much-needed tool to promote local production of Medicines and Medical Devices and actively contribute to the current import substitution initiatives of the Government of Uganda.

The growth of the local pharmaceutical industry is contingent on government policies that protect the nascent industry. The new Fees Regulations directly contribute to the government's 'Buy Uganda, Build Uganda' program and will further strengthen the 55-strong pharmaceutical and medical devices manufacturing sector in Uganda. When we appeared before the Parliamentary health committee, our call was for a total ban on importation of the products that were already over-supplying, but we must also not limit the market of choices; however, we must protect and promote ours.

African Union has noted that Member States of the WHO African Region import between 70% and 100% of finished pharmaceutical products (FPPs), 99% of vaccines, and between 90% and 100% of medical devices and active pharmaceutical ingredients (APIs), with little or no capacity for manufacturing of pharmaceutical quality excipients, vaccines, medical devices, and other health technologies. 

There are currently 649 pharmaceutical manufacturing plants in Africa, with 29 countries having varying drug manufacturing capabilities compared to China and India, which have 5,000 and 10,500 drug manufacturers, respectively. We appreciate that Uganda, through the NRM Government, is at the forefront of rewriting these statistics by providing the incentives highlighted in the new Fees Regulations.

Furthermore, as a member state of the AU, Uganda needs to continue to vigilantly pursue mechanisms to reduce its dependence on imports for critical products, such as medicines and medical supplies, to move towards pharmaceutical sovereignty and independence.

The new NDA fees regulations clearly reflect movement in the right direction and mirror similar initiatives currently being pursued by several African Governments, such as Ghana and Nigeria, following the lessons learnt from the COVID-19 pandemic, where African countries’ access to life-saving commodities was severely hampered by the emergence of health commodity nationalism. We therefore appreciate the NRM Government for the active pursuit of the African Union Vision of African pharmaceutical sovereignty.

We also take note that during the 74th session of the WHO African Region, which took place in Brazzaville, Republic of Congo, from 26 to 30 August last year, the Framework for Strengthening Local Production of Medicines, Vaccines, and Other Health Technologies in the WHO African Region from 2025 to 2035 was discussed. It was emphasised that the framework will significantly contribute to improving supply chains, strengthening health security, and facilitating the attainment of universal health coverage (UHC) and the health-related Sustainable Development Goals (SDGs) and their respective targets. We therefore appreciate the Government's expeditious pursuit of rolling out this framework.

More importantly, the Fees Regulations provide an incentive to bring local production of medicines back home and are also aligned with Resolution WHA74.6 of the 74th World Health Assembly in 2021, which identified strengthening local production of medicines and other health technologies as a means to improve access.

This will also facilitate the attainment of the continental objective of increasing capacity for local production of quality, safe, efficacious and affordable medicines, vaccines, medical devices, and in vitro diagnostics to achieve at least 55% of the market share and 50% of vaccine doses produced locally by 2035 under the Framework for strengthening local production of medicines.

It is critical to note that the promotion and protection of local industries presents several advantages, which collectively will facilitate the attainment of Uganda’s Vision 2040. Economically, the empowerment of local industries facilitates import substitution, thereby reducing foreign exchange expenditure on imported medicines, which improves Uganda’s trade balance.

It also leads to wider industrial growth through the stimulation of local supply chains in the packaging, chemicals, and research sectors.

Furthermore, a robust local pharmaceutical base with conducive policies will attract regional partnerships and enable exports to and trade with other African countries, thereby driving foreign investment and increasing our export potential. Local pharmaceutical industrial growth will also encourage research and innovation in biotechnology, natural products, and the integration of traditional medicine, fostering an innovation-driven economy.

The move to protect the nascent local industry will reaffirm Uganda’s national sovereignty by reducing its dependency on external suppliers and foreign aid for health commodities, thereby enhancing national autonomy in policy decisions.

It will also position Uganda as a pharmaceutical hub within the region, thereby strengthening trade leverage and interstate partnerships. The move is also a significant and visible commitment to the health sector, supporting national goals under Vision 2040 and aligning with the African Union’s Pharmaceutical Manufacturing Plan for Africa (PMPA).

The BUBU-driven Fees regulation will also drive the creation of employment opportunities as local production will create direct jobs for pharmacists, analytical scientists, engineers, and technicians, and indirect jobs across logistics, retail, and agriculture (for medicinal plants). It will also strengthen the national technical expertise in pharmaceutical manufacturing through technology transfer and sharing, industry training programs, industrial internships, and partnerships with local pharmacy schools.

Importantly, a vibrant and empowered local pharmaceutical sector improves access to medicines through reducing import delays and ensuring ready availability of medicines, lowering drug prices through the elimination of import tariffs and shipping costs, better quality assurance mechanisms since local facilities can easily be monitored for compliance and lastly, enabling the swift response and resilience in Health Emergencies.

We further urge the government to consider additional incentives, such as introducing a total ban on imported generic pharmaceutical products where local capacity exists (currently, only 37 products would be affected), eliminating taxes on pharmaceutical quality control equipment, and providing tax relief. We also urge Parliament to expedite the passage of the National Drug and Health Products Bill, enabling the NDA to meet the legal requirements for ML3, thereby enhancing the international acceptability of our locally manufactured products.

The time is now. Uganda cannot remain vulnerable to the downside of dependence on imported products. We therefore welcome the new fee regulations as a catalyst towards pharmaceutical sovereignty.

Promoting Uganda’s local pharmaceutical industry enhances social welfare, strengthens the healthcare system, boosts economic resilience, and reinforces national sovereignty. It transforms health security into a pillar of sustainable development. We call upon all patriots and well-meaning citizens who wish Uganda well to unreservedly support these initiatives towards an economically empowered Uganda.

For God and My Country

The writer is the Chairman Uganda Pharmaceutical Manufacturers