[e-drug] Uganda's drug regulatory agency faces financial crisis

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E-drug: Uganda's drug regulatory agency faces financial crisis
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Lancet 2001; 358: no 9280 (11 August 2001)

Uganda's drug regulatory agency faces financial crisis

Uganda's drug regulatory agency is facing a financial deficit of
US$ 857,000, more than half its budget for 2001-02. The Executive
Secretary of the National Drug Authority (NDA), John Lule, said the
agency could only raise US$ 800,000 out of US$ 1.6 million
needed to run the NDA.

Lule said that in 1993, when the NDA was formed, the Danish
International Development Agency (DANIDA) met 90% of NDA's
budget. This has been gradually reduced to 10% for 2000-01 and
ended in March, 2001. The Ugandan government has not provided
funds to cover the shortfall.

Lule said that as a result pharmaceutical companies would have to
pay for verification and regulatory services that had been free, but
the drug firms have warned that this move could cause drug prices
to increase.

"The Danish tax payers do not owe us a living but in their
generosity they have been funding the NDA", Lule said. The Danish
Ambassador to Uganda, Flemin Bjork, said the initial funding from
the Red Cross through DANIDA had expired in March, 2001. He
said the Danish government had committed another US$ 114 000
for development costs this financial year.

He said they had stopped financing recurrent expenditures of NDA
and this money would instead finance development programmes,
including laboratory facilities, health-care training, a library, and
expansion of the drug regulatory services in other parts of the
country. The Danish government also pays for an expatriate advisor
to support NDA.

"Starting on July 1 we have allocated not less than US$ 114,000
for NDA for development expenditure. I don't know what it was
before, but we are continuing with development expenditure", said
Bjork. This, however, will not reverse the US$ 857,000 deficit. The
Ministry of Health has included the debt problem in a policy
statement to be presented to parliament soon, to hopefully get
emergency funds.

Lule said the NDA would levy a 1% charge on all drug importation
invoices presented to it for verification. 90% of the drugs used in
Uganda are imported. In addition the NDA will charge US$ 4,000
each time it inspects a pharmaceutical factory in Asia and
US$ 2,000 for factories in East Africa to see if they are fit to export
drugs to Uganda. The fee for inspection of factories in Europe is yet
to be fixed. The agency will also increase the cost of carrying out
analysis at its drug quality control laboratory in Kampala.

Pharmaceutical companies are protesting against the new charges
and the way in which they were introduced. The General Secretary
of the Pharmaceutical Society of Uganda, James Tamale, said they
sympathise with NDA but they should have been consulted first.
"We want dialogue so that any charges introduced are fair to us",
he said.

George Kibumba, a drug information pharmacist at the Joint
Medical Stores (a company co-owned by the Catholic and
Protestant churches), said NDA and the Ministry of Health should
have planned better to avoid burdening pharmaceutical companies.

Charles Wendo


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