African Drugmakers Protest Drug Import Policies

Drug producers in Uganda, Tanzania and Zambia have protested against plans by a regional trade grouping to abandon a 10% tax on imported pharmaceuticals. The East African drug market is valued at about US$300mn, but the few indigenous manufacturers present in the region argue that removing the tax would lead to "dumping" by subsidised Indian and Chinese exporters.

Opposition follows a unilateral decision in Kenya to abandon the tax. However, local reports claim that its imposition has so far led to steady increases in the price of branded drugs. A package of a key anti-malarial branded drug, metakelfin, has reportedly risen by about 3% to UGX23,500 (US$13.35), but prices of other leading products have increased by as much as 26% in recent months.

In Uganda, local pharmaceutical manufacturers have drawn up a list of 15 anti-infectives and treatments for major diseases which will require exemption from any relaxation of import tariffs. Producers claim that regional governments tempted to remove the tax in an effort to boost affordable healthcare will damage the local sector, which accounts for roughly 10% of the market. Drugs imported tariff-free under the international Global Fund initiative comprise an even smaller share of the market.

Meanwhile, Zambian drugmakers have alleged that their efforts to increase local production of generic anti-HIV/AIDS products could be impacted by lower import tariffs. Indeed, there is evidence that hostility to bulk drug imports from large-scale, low-cost producers such as India and China is a growing trend throughout Africa. With the exception of South Africa, where purchasing power is comparatively high, drug sector players in countries such as Nigeria have also protested the threat of cheap imports.