- As of mid-2025, local production of essential medicines still only accounts for ~30% of those on the Kenya Essential Medicines List (KEML), falling short of the 50% target to be reached by 2026.
- Proposed tax changes under the Finance Bill, 2025, particularly regarding the reclassification of raw materials for the manufacture of pharmaceuticals from “zero-rated” to “exempt” under the Value Added Tax regime threatened to raise the cost of production for local pharmaceutical firms. The proposal was, however, dropped.
- Implementation and regulatory bottlenecks also persist, such as delays in registration of medicines, challenges in technology transfer, dependence on imported active pharmaceutical ingredients, and inconsistent application or scale of tax incentives.
- The government is again, through the Finance Bill, 2026, attempting to reclassify raw materials for the manufacture of pharmaceuticals from “zero-rated” to “exempt” under the Value Added Tax regime, which may lead to an increase in the cost of production of pharmaceuticals, contrary to its promise.
