Uganda: Domestic Medicine Procurement Policy Expansion Drives 60% Local Sourcing

• Senior Presidential Advisor Moses Byaruhanga called for increased government procurement of locally made medicines to create jobs, conserve foreign exchange, and strengthen Uganda's industrial base.
• National Medical Stores' local procurement share has risen from 5-10% in 2015 to 60% in FY 2024/25 and 64% by March 2026, alongside a budget increase from US$70 million to nearly US$200 million.
• President Yoweri Museveni issued a 2016 directive for domestic bidding on locally manufactured medicines, following concerns from manufacturers about international competition.
• Challenges remain, including a list of only 37 eligible products for domestic procurement that has not expanded in nearly a decade, despite growth in local manufacturing capacity.
• Concerns were also raised about off-take agreements potentially creating monopolies, with a recommendation to use them for encouraging investment in new pharmaceutical products.

Lawyers and compliance officers operating within Uganda's pharmaceutical sector should closely monitor updates to the list of medicines eligible for domestic procurement and meticulously scrutinize off-take agreements for adherence to anti-monopoly regulations.

Uganda is renewing its commitment to expanding domestic medicine procurement, with a senior presidential advisor recently advocating for increased government acquisition of locally manufactured pharmaceuticals. Moses Byaruhanga, the Senior Presidential Advisor for Political Mobilisation, emphasized that this policy is crucial for job creation, foreign exchange conservation, and strengthening the nation's industrial base. His remarks were made last week during a meeting held at the Serena Hotel in Kampala, which brought together Byaruhanga, leaders from the Uganda Pharmaceutical Manufacturers Association (UPMA), and the State House medical team.

The meeting served to evaluate the progress of the government's strategy to support local pharmaceutical producers and to discuss persistent challenges within the sector. Byaruhanga highlighted significant advancements in National Medical Stores (NMS) local sourcing, noting that the proportion of medicines procured domestically had surged from approximately five percent during initial engagements to 60 percent in the 2024/25 Financial Year. Furthermore, by March 2026, NMS had procured about 64 percent of its medicines from local manufacturers for the 2025/26 Financial Year. This increase coincided with a substantial expansion of the NMS budget, which grew from around US$70 million in 2015 to nearly US$200 million.

Despite this progress, Byaruhanga identified emerging obstacles that require government attention to sustain the growth of Uganda's pharmaceutical manufacturing capacity. A key concern raised during the discussions was the static number of pharmaceutical products, or molecules, eligible under the domestic procurement arrangement. The State House medical team pointed out that this list has remained at 37 products for almost a decade, despite the sector's growth and the availability of additional locally produced medicines. Another issue involved off-take agreements, with Byaruhanga cautioning against arrangements that could create monopolies by granting exclusive access to a single local manufacturer for products already produced by other Ugandan companies.

The current drive for Uganda domestic medicine procurement policy expansion builds upon a foundation laid nearly a decade ago. Byaruhanga recalled an earlier engagement in 2015 with local pharmaceutical manufacturers, which took place while he was contributing to preparations for the 2016 presidential elections. At that time, the National Medical Stores operated with a budget of approximately Shs110 billion, equivalent to about US$70 million, yet only between five and ten percent of its procurement was sourced from local producers.

Manufacturers explained that they faced intense competition because government procurement involved international bidding processes. This exposed Ugandan firms to companies from countries like India and China, which benefit from significant economies of scale in pharmaceutical production. These concerns were subsequently presented to President Yoweri Museveni, leading to a pivotal directive in 2016. The President mandated that medicines manufactured within Uganda should be procured through domestic bidding processes.

The primary objective of this Museveni domestic bidding directive was to cultivate a guaranteed market for domestic manufacturers. This strategy aimed to stimulate the creation of local jobs, encourage the utilization of local utilities such as electricity and water, and, where feasible, incorporate local raw materials into the production process, thereby strengthening the Uganda pharmaceutical manufacturing policy.

Looking ahead, the Senior Presidential Advisor emphasized that the President's 2016 directive did not impose a limit on the list of eligible products, stating that any locally manufactured medicine should not be imported by the government. He directed that relevant government agencies follow up on this matter to ensure that all locally manufactured medicines meeting quality standards are prioritized in government procurement, signaling a continued push for Uganda domestic medicine procurement policy expansion.

Furthermore, Byaruhanga stressed that off-take agreements should be strategically utilized to encourage investment in new pharmaceutical products not currently manufactured in Uganda, rather than creating exclusive market access for existing products. This approach aims to prevent anti-monopoly concerns and foster broader growth within the sector. The overarching goal remains to spend more locally, thereby retaining foreign exchange within the country and generating additional employment opportunities.

Lawyers and compliance officers operating within Uganda's pharmaceutical sector should closely monitor updates to the list of medicines eligible for domestic procurement and meticulously scrutinize off-take agreements for adherence to anti-monopoly regulations. This ongoing government push for local content will significantly influence tender strategies and investment decisions for both local and international manufacturers engaged in Uganda local pharmaceutical procurement.

Lawyers and compliance officers in Uganda's pharmaceutical sector should monitor updates to the list of medicines eligible for domestic procurement and scrutinize off-take agreements for compliance with anti-monopoly concerns. This signals a continued government push for local content, impacting tender strategies and investment decisions for both local and international manufacturers.

Source: Original reporting via The Independent