A top medic has warned of the strong possibility of Ugandans facing higher costs of health care due to a spike in the price of drugs, and in other instances scarcity of medicines, due to tax increase of 5 per cent on imported medicines and other pharmaceutical products.
The National Drug Authority (NDA) is overseeing a government resolution that requires all importers of drugs to pay a 17 per cent tax on consignment, up from 12 per cent. The new fee kicked in at the start of October.
“High tax charges will make drugs more expensive and inaccessible to ordinary Ugandans. We call on the government to urgently intervene before the situation worsens,” Dr Hussein Oria, the secretary, Uganda Pharmacy Promoters Association (UPPA), warned.
“These tariffs could lead to immediate price hikes for consumers, strain insurance systems, and risk patients rationing or foregoing essential medicines,” Dr Oria added, explaining that the decision could have awful consequences for public health.
He said the NDA proposed the tax hike on drugs without consulting importers and distributors of drugs under their umbrella body, UPPA. UPPA argues that these fees are unsustainable and could disrupt the supply of essential medicines, yet one of their objectives is to ensure essential supply of drugs to people.
“This is an unfair tax meant to exploit us and force us out of business. As people dealing in health, we were never consulted,” Kirti Shah, the UPPA chairman, said last week.
He added: “The World Health Organization encourages governments to maintain minimal taxes on drugs to ensure that people have effective access to medicine and better healthcare.”
Shah said the five per cent tax hike is “an abnormal increase,” accusing the government of introducing the measure without consulting key stakeholders in the pharmaceutical sector. The association argues that the increased taxes contradict Uganda’s commitment to ensuring affordable healthcare and access to essential medicines.
UPPA warns that if the government does not suspend new charges, many pharmaceutical importers could shut down operations, leading to drug shortages across the country.
NDA RESPONDS
Abiaz Rwamwiri, the spokesperson of NDA, says the new tax system is part of broader fiscal reforms aimed at boosting domestic revenue and promoting local drug manufacturing, through Buy Uganda Build Uganda (BUBU).
However, Dr Oria warned that such exorbitant fees could limit access to essential diagnostic tools and undermine patient outcomes.
“Without proper diagnostics, doctors can’t prescribe correctly, and patients won’t get well,” he said.
UPPA, which represents more than 300 pharmaceutical importers and distributors in the country, has issued a stern two-week ultimatum to the government to respond, demanding immediate suspension of newly instituted drug importation fees and regulations.
“Failure to act, the association will trigger a nationwide shutdown of pharmaceutical imports and wholesale operations, putting Uganda’s medicine supply at risk,” Oria said.
He also said that the Good Manufacturing Practice (GMP) inspection fee for pharmaceutical facilities outside Africa has been dramatically raised from a flat $8,000 to as much as $24,000 per facility.
“The NDA now separates products into three categories: general (non-beta-lactam), penicillin-based beta-lactams, and cephalosporins with each line requiring a separate $8,000 payment.”
He said that for facilities manufacturing across all three categories, the cost triples.
“You cannot move from $8,000 to $24,000. It doesn’t make sense,” Oria said.
Beyond inspection fees, importers must pay a $500 annual retention fee for each registered product. This fee is intended to fund NDA’s post-market surveillance to ensure medicine safety and efficacy.
However, UPPA contests the requirement to pay when a product was not imported or sold. The new regulations also significantly affect medical devices such as blood sugar monitors, blood pressure machines, and diagnostic tools.
Each item now attracts a $1,500 registration fee, regardless of its commercial value. Oria further raised concern over the heavy tax burden imposed by the Uganda Revenue Authority (URA), which includes a 1.5 per cent infrastructure levy and a one per cent import declaration fee on top of the NDA’s two per cent verification fee.
However, Oria said that this policy shift has not made locally- manufactured drugs cheaper or more available.
“The goal should aim at incentives for local manufacturing products such as reducing interest rates, which are currently over 20 per cent, compared to one to three per cent in other countries,” he said.
Basic medical supplies like syringes, gloves, and cotton wool are also affected. Oria said syringes now attract nearly 50 per cent in combined taxes from NDA and URA, while gloves are taxed at around 38.5 per cent.
“These are basic items used in every hospital, in every treatment. Making them more expensive simply raises the cost of healthcare,” he said.
UPPA further criticized the double taxation on imported medical devices and surgical tools, citing overlapping fees charged by the Uganda National Bureau of Standards (UNBS) and the NDA.
Oria said the NDA verification fee for about 37 essential medicines such as amoxicillin and paracetamol had already been increased from 2 per cent to 12 per cent in 2020.
“Currently, more than 95 per cent of Uganda’s medicines are imported, with local production accounting for less than 5 per cent,” he said.
Oria said the government is increasing financial pressure on importers, which will likely be transferred to consumers.
“Over 70 per cent of healthcare in Uganda is self-funded. Only about 30 per cent is covered by the state,” Oria said. “Patients are often referred to private pharmacies even after visiting public hospitals.”
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