The impact of the increase in import verification fees on local production capacity of selected medicines in Uganda

Abstract

Abstract Background The local manufacture of pharmaceuticals is an opportunity to develop a broader manufacturing and knowledge-based economy and reduce over dependence on imports. To promote local production, the Ugandan government introduced Buy Uganda Build Uganda policy geared towards promoting use of locally manufactured goods. It also increased import verification fees in 2017 for 37 selected locally manufactured essential medicines from 2 to 12% to discourage importation of these medicines. This study assessed the impact of the increase in verification fees on local production capacity of the medicines. Methods This was a mixed methods study looking at production capacity before and after introduction of the 12% import verification fees. It was conducted among six (6) local pharmaceutical industries in Uganda and seven (7) key informant interviews with experts in the pharmaceutical sector between February and September 2021. Results The overall increase in local production capacity of the selected medicines was 8.2% from 2017 to 2020. The most significant increases were in the production of capsules (100.6%, P = 0.03) and oral liquids (170.8%, P = 0.0001). All the industries registered an increase in number of employees between 2017 and 2020 with an average percentage increase of 42%. There was a 14.7% (95% CI 2.76–17.6%) change in installed capacity of the compression machine (P = 0.033) and 27.7% (95% CI 24.6–33.9%) change in installed capacity of the Blow–Fill–Seal (BFS) filling machines (P = 0.011). There was also an increase in the number and capacity of installed utilities such as the heating ventilation and air conditioning (968%) and standby generators (131%). Only two (2) industries registered an increase in critical quality control equipment and one had all the critical equipment available by 2020. Most of the key informants reported positive impact of the increment of import verification on local manufacturing capacity. Conclusions Local pharmaceutical production capacity increased with the increase in import verification fees with significant increases in production of oral liquids and capsules. Successful implementation of policies supporting local production will promote the development of local pharmaceutical industries. Governments should consider increasing the list of medicines to benefit from the import verification fees increase by adding all essential generic medicines for which there is adequate domestic production capacity and technical skills.

Keywords

• Local production
• Import verification fees
• Local industry
• Production capacity