Kenya Cuts Medicine Import Bill by Sh4.8bn as Local Drug Manufacturing Gains Ground
If Kenya is to reduce its dependence on imported medicines, the latest trade data suggests the country may finally be moving in the right direction. New figures show the country’s spending on imported pharmaceuticals fell sharply in the first quarter of 2026, offering fresh signs that government efforts to expand local drug manufacturing are beginning to influence the market.
Kenya spent Sh15.6 billion on imported medicinal and pharmaceutical products between January and March this year, down from Sh20.4 billion recorded during the same period in 2025. The Sh4.8 billion decline, equivalent to a 23.52 percent drop, marks the second consecutive year of falling expenditure on imported medicines, according to data from the Kenya National Bureau of Statistics (KNBS).
According to Business Daily, the decline comes as the government races to fulfil an ambitious target of manufacturing half of the medicines listed on the Kenya Essential Medicines List locally by the end of 2026. The strategy is aimed at strengthening domestic pharmaceutical production, lowering healthcare costs and shielding the country from disruptions in global supply chains.
“Reducing dependence on imported medicines is not only an economic priority but also a public health imperative. A resilient healthcare system requires a strong local manufacturing base,” a pharmaceutical industry analyst said.
“The latest figures are encouraging, but Kenya still has considerable ground to cover before local manufacturers can meet national demand for essential medicines,” the analyst added.
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Import Spending Falls Despite Higher Volumes
Interestingly, the lower import bill did not result from reduced demand for medicines. Instead, Kenya actually imported more pharmaceutical products during the quarter.
Import volumes increased by 13.1 percent to 8,632.2 tonnes, compared to 7,632.1 tonnes during the corresponding period last year, suggesting the country paid significantly less per tonne of imported medicines.
Industry observers attribute the lower import costs to a combination of factors. Global prices for pharmaceutical raw materials have eased following years of supply chain disruptions, while Kenyan importers are increasingly sourcing lower-cost generic medicines instead of expensive branded alternatives.
Another factor may be the gradual expansion of domestic pharmaceutical manufacturing, with local firms producing more of the basic medicines that were previously imported, reducing the need for costlier finished pharmaceutical products from overseas.
Even so, Kenya’s pharmaceutical industry remains heavily dependent on imports.
Experts estimate that more than 85 percent of essential medicines consumed in the country are still sourced from foreign manufacturers. Local pharmaceutical companies largely concentrate on producing basic medicines, while specialised drugs, vaccines, biologics and other high-value pharmaceutical products continue to be imported.
The figures therefore highlight both the progress made and the scale of the challenge that remains as Kenya seeks greater self-sufficiency in medicine production.
“Local manufacturers have made important gains in producing common medicines, but complex pharmaceutical products still require significant investment, technology transfer and specialised expertise,” a healthcare economist said.
Government Intensifies Local Manufacturing Drive
The decline in medicine imports coincides with an aggressive government campaign to strengthen Kenya’s pharmaceutical manufacturing sector.
The initiative traces its roots to a 2023 government directive that set an ambitious target of producing half of all medicines listed under the Kenya Essential Medicines List locally by the close of 2026.
Health Cabinet Secretary Aden Duale has repeatedly argued that expanding domestic pharmaceutical production is central to achieving what he describes as Kenya’s “health sovereignty.”
According to the Cabinet Secretary, countries that rely heavily on imported medicines remain vulnerable to international crises that can disrupt supplies or drive up prices.
“Health security cannot be outsourced. Countries that do not produce essential health products remain exposed to external shocks,” Mr Duale said.
The government believes stronger local production capacity would improve medicine availability during global emergencies while reducing the country’s foreign exchange expenditure on pharmaceutical imports.
The strategy has gained additional urgency following the supply chain disruptions experienced during the Covid-19 pandemic, when many countries struggled to access essential medicines and medical supplies.
Tax Incentives Aim to Boost Industry Growth
To accelerate investment in domestic pharmaceutical manufacturing, the government has introduced several policy measures aimed at lowering production costs.
Last month, while launching the Ministry of Health’s Local Manufacturing Strategy 2026–2030, Principal Secretary for Medical Services Ouma Oluga described local production as one of the most important tools available for improving affordability and strengthening healthcare delivery.
“The strategy seeks to address barriers that have limited the growth of local manufacturing while creating an environment that encourages investment, innovation, and industrial expansion,” Dr Oluga said.
He argued that no healthcare system can remain sustainable if it cannot consistently secure reliable supplies of essential medicines.
To support manufacturers, the government has removed value-added tax (VAT) on raw materials and production inputs used in pharmaceutical manufacturing, whether sourced locally or imported. However, the tax exemption does not apply to finished medicines imported for direct sale in the Kenyan market.
The policy is expected to reduce manufacturing costs, improve the competitiveness of locally produced medicines and encourage pharmaceutical companies to expand their production capacity.
Despite the encouraging decline in import spending, industry stakeholders caution that achieving the government’s 50 percent local manufacturing target will require sustained investment in research, modern production facilities, skilled personnel and regulatory support.
For now, the latest import figures provide an early indication that Kenya’s strategy to build a stronger pharmaceutical manufacturing industry may be gaining traction. Whether the country can substantially reduce its dependence on imported medicines, however, will depend on how quickly local manufacturers move beyond basic generic products into the production of more complex and high-value medicines.
