E-DRUG: Pharmaceutical Companies might not be making a lot (2)
Mr. Kibumba's posting and conclusion stated at the beginning of his
e-mail message indicates a very clear lack of understanding or
appreciation of the operations of the pharmaceutical industry and the
figures released by the Govt. of Uganda.
The tax-payer figures given in the table are a result of mainly
companies which pay taxes - import taxes and VAT on the products that
they deal in e.g. Shell pays a tax on each litre of fuel sold in Uganda
which it remits to Govt. making the bulk of the figure shown - a very
small proportion could arise out of income tax paid at the end of the
year from company declared profits (in my experience not many companies
pay any thing substantial using this tax line as many will have deducted
invested funds in company expansion - capital investments) and hence
shown no or minimal profits.
Uganda is an LDC with a per capita income of USD 250, a per capita
health expenditure of USD 12 and a per capita expenditure on medicines
of USD 3.0! The pharmaceutical market size is estimated at USD 70
million with the bulk of it contributed by generic medicines (approx.
80%) and the local manufacturing sector meeting 15 - 20% of the market.
Given this market size, it is not surprising that R&D Pharma has no
manufacturing plant or "seem not to be making much money as people
think" in Uganda.
Also, as Mr. Kibumba may be aware, and this is not the reason that
pharmaceutical companies don't appear in the list but just as additional
information, medicines are TAX - FREE in Uganda so no taxes are paid
either at the time of importing or after selling the medicines.
To even push it further, it may be worthwhile to note that Africa
contributes less than 2% of the world's pharmaceutical market (again
here more than 50% of this is contributed by South Africa and about 4
North African Countries)!
[who asked to remain anonymous due to his/her official position; name known to