Importers and distributors of drugs, under their umbrella body, the Uganda Pharmacy Promoters Association (UPPA) have threatened to close their businesses next week over a sudden 5 per cent tax hike on imported pharmaceutical products.
They claim that the tax hike, from 12 per cent to 17 per cent, was introduced by the National Drug Authority (NDA) without consulting stakeholders.
Speaking to the press on Friday, Kirti Shah, the UPPA chairman, expressed frustration over the sudden increase, saying, “In 2022, NDA increased the fees to 12 per cent, and this year, another fare of 17 per cent has been placed without our knowledge. When we met with them, we were not given a clear structure of fees placed, which was without our knowledge.”
Mr Hussein Oria, UPPA’s Secretary General, emphasised that the tax hike will have far-reaching consequences, particularly for ordinary citizens who rely on medicines for their livelihood.
“The increase of the fares will affect our operations, but they affect the citizen more in the long run. People don’t have resources; the community is already burdened because they won’t have resources to buy the medicines. If the costs are so high, then investors will have no business,” he said.
The association has already written to Health Minister Jane Ruth Aceng, informing her of the situation and requesting her intervention. In the letter, UPPA warned that failure to respond to their plea will leave them no option but to close their businesses in Uganda.
“It doesn’t make sense to continue working yet the final consumer of our product is burdened. There will be no business to continue to serve the community; there will be no sense to supply to retail and wholesale pharmacies in the country. We will stop importation of medicines too,” Mr Oria said.
According to the World Health Organisation (WHO), exempting essential medicines and active pharmaceutical ingredients from taxation can improve affordability and access. The WHO recommendation highlights the need for governments to consider the impact of taxation on healthcare delivery and access to medicines.
NDA speaks
Mr Abiaz Rwamwiri, the spokesperson of NDA, said he had not received the document but that the changes made on the fares for imported drugs is meant to encourage productivity of drugs at home through Buy Uganda Build Uganda (BUBU).
”I have not seen their complaint but the NDA made changes on drug importation to ease access to medicine made at home,” Mr Rwamwiri said.
UPPA Concerns
a) Increased verification fees from 2% to 3% for non-BUBU products:
It is proposed by UPPA that NDA maintains the 2% since Uganda Revenue Authority also charges 2.5%.
b) Increased verification fees for non-BUBU products from 12% to 17%. UPPA recommends that NDA maintains 12% or else NDA bans importation of the same.
c) Reinstating products on the register:
The Regulations impose new fees charges of $500 per year of suspension. UPPA recommends that an annual retention fee of $500 is payable for so long as product is available in the market since NDA needs to continue undertaking quality monitoring through its PMS (Post Market Surveillance) systems.
d) Amendment of application for registration:
It is recommended that there is no need to pay these fees, since it’s part of the $2000 paid for dossier assessment/product registration fees.
e) That the Application fees for premise approval of Ugx. 1,000,000/= is unnecessary and exorbitant, there is a need to waive it, since it is nonrefundable.
f) On syringes, Under the new regulations, they impose NDA verification fees of 20% which is too high, yet Uganda Revenue Authority (URA) also charges 25%. NDA and URA need to lower charges but also recommend that one body be mandated to charge these taxes. NDA could reduce to 2% as previously done.
g) Laboratory analysis fees:
These fees are exorbitant, and as such, they recommend that there is need to consult with other regulatory agencies within the region. The costs are overly segregated hence the need to consolidate them to affordable limits.
GMP fees: The new Regulations separate Non beta lactam (general products), penicillins and cephalosporins, each category charged $8000 yet previously this would cover 5 lines and then $2000 per additional production line. UPPA recommended that NDA reverts to the previous portfolio. Also consider penicillin and cephalosporins as beta lactam units, not as separate ones.