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Governance Assessment of the Public Sector Drug Management System: Uganda _____________________________________________ Final Report on Short Term Consulting Services Commissioned to the Basel Institute on Governance, Basel, Switzerland by the Swedish Embassy, Kampala, Uganda. Contract Number CO1533 24th May, 2011 Consultants: Dr. Claudia Baez-Camargo Ms. Pamela Kamujuni Basel Institute on Governance Consultant Human Rights and Good Governance Basel, Switzerland Kampala, Uganda

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Table of Contents

Abbreviations and Acronyms .......................................................................... 3

Executive summary ........................................................................................... 4

Background and motivation ............................................................................ 6

Framework, Approaches and Methodology ................................................ 7

Political background .......................................................................................... 9

Overview of the Current Public Sector Drug Supply Chain: Institutions, Actors and Performance. ............................................................................... 12 Performance and regulatory assessments results. ......................................................................... 15 Power and influence analysis .................................................................................................................... 17

Systems Assessment and Identified Governance Risks .......................... 18 Systems Assessment ..................................................................................................................................... 18 Identified Governance Risks ....................................................................................................................... 20

Lack of transparency and accountability at NMS .......................................................................... 20 Leakages of drugs along the distribution line ................................................................................. 22

Assessment of governance processes: accountability, transparency and control of corruption ............................................................................... 23 NMS Incentives/constraints accountability analysis ....................................................................... 23 Health Facility Workers: Incentives/constraints accountability analysis ............................... 25

Suggested anticorruption and governance enhancing strategies for the Ugandan public sector drug supply chain ........................................... 27 Excessive centralization of informal power: NMS ............................................................................ 28 Excessive fragmentation of formal power, human resources and preventing drug pilferage ............................................................................................................................................................... 30

References ........................................................................................................ 33

Appendix 1 ........................................................................................................ 34 List of Institutional Affiliations of Stakeholders Interviewed ........................................................ 34

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Abbreviations and Acronyms ACTs – Artemisinin-based Combination Therapies

ARVs – Antiretroviral drugs

CAO – Chief Administrative Officer

CDC – Centers for Disease Control and Prevention

CIA – Chief Internal Auditor

CSOs – Civil Society Organizations

DADIS – District Assistant Drug Inspectors

DHO – District Health Officer

DPs – Development Partners

FGDs – Focus Group Discussions

GF – Global Fund

GM – General Manager

HUMC – Health Unit Management Committee

MeTA – Medicines Transparency Alliance

MHSDMU – Medicines and Health Services Delivery Monitoring Unit

MoE – Ministry of Education

MoFPED – Ministry of Finance, Planning and Economic Development

MoH – Ministry of Health

MoLG – Ministry of Local Government

MoPS – Ministry of Public Service

NDA – National Drug Authority

NGO – Non-Governmental Organization

NMS - National Medical Stores

OAG – Office of the Auditor General

PPDA – Public Procurement and Disposal Agency

PSU - Pharmaceutical Society of Uganda

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Executive summary

This report reflects the results of a study, commissioned to the Basel Institute on Governance by the

Swedish Embassy in Kampala, aimed at assessing governance risks in the Ugandan public sector

drug supply chain under the new institutional arrangements in place since November 2009. The

assessment was conducted following the framework to assess governance of health systems

developed by the Health Governance team at the Basel Institute on Governance in collaboration with

the Swiss Tropical and Public Health Institute. This approach emphasizes the need to address both

formal and informal determinants to governance through political economy as well as power and

influence analysis.

Methods used included desk review of the relevant literature covering the Ugandan Health system

as well as political economy analyses of the Ugandan case, semi-structured interviews with a broad

range of non-state stakeholders and focus group discussions with patients and patient advocacy

group representatives, and with a broad range of health service providers.

The starting point has been to place the assessment of the public sector drug supply chain against

the backdrop of a political regime where political power is heavily centralized around the figure of

the president, and where the decentralized structure of the state has worked to support extensive

patronage networks.

While all evidence suggests that accessibility of essential medicines at public health facilities has

improved under the new system, power and influence analysis revealed distorted accountability

lines due to the informal centralization of power in the National Medical Stores (NMS) and its

leadership. Furthermore, institutional and stakeholder analysis revealed two areas of increased

governance risk: lack of accountability and transparency at NMS and leakages of drugs along the

distribution line.

Analysis of embedded institutional and political incentives suggested a situation that can be

characterized as a vicious circle where NMS leadership is confronted by criticism and questioning

from multiple angles, which In turn create incentives to close in and avoid sharing critical

information, which in turn generates further suspicions and criticism.

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Governance weaknesses along the distribution line are, in turn, associated with a mix of negative

incentives faced by health staff at public facilities. These negative incentives include low

remuneration, lack of career advancement prospects, poor monitoring, as well as a profit motive

associated with the elevated prices at which stolen drugs are often sold in unlicensed pharmacies.

The suggested anticorruption and governance strengthening strategies to address lack of

accountability at NMS involve trust-building measures at different levels and among different actors.

These include a recognition that the current institutional arrangements governing the drug supply

chain are yielding results and should be supported, a clear joint statement on the part of the

relevant stakeholders on which indicators and data exactly would be required from NMS to improve

on transparency, as well as the continued development of creative partnerships to create and

implement better technical procedures.

In terms of addressing drug leakages along the distribution line this report concludes that a

comprehensive reform would be required in order to generate adequate incentives to health facility

staff. This should not only involve better remuneration and career opportunities, but also effective

methods of community-based monitoring and better regulation of the private pharmaceutical

market.

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Background and motivation

In November 2009 significant changes were decreed that modified the way the Ugandan public

sector medicine supply chain operates. The major change consisted in the centralization of a large

proportion of the budget for drugs and medicine supplies, and the pre-financing of the National

Medical Stores (NMS).1 Thus NMS, a parastatal corporation mandated with the procurement, storage

and distribution of drugs and medical supplies for the public health sector, was given direct

decision-making authority over a large proportion of the funds allocated to drugs and medical

supplies in the Ugandan public health sector budget.

The policy change came in the context of severe criticism and public outrage over widespread stock

outs of even the most basic drugs and supplies at health facilities (see, for example, Njoroge and

Lister 2009). Furthermore, drugs intended for public facilities were often found for sale at inflated

prices in private pharmacies, adding to the perception of gross mismanagement and corruption

along the drug management system.

By centralizing the budget and decision making power along the medicine supply chain, it was

expected that efficiency gains would be achieved, ultimately leading to a more coherent and

streamlined system where essential drugs and medical supplies would be more accessible to

Ugandans at public health facilities.

After a year and a half since the policy change, the question of whether and how the new system

has improved on the previous situation still requires conclusive answers. While some technical

reviews assessing regulatory quality (World Bank Institute 2010) as well as performance reports

(Medicines and Health Service Delivery Monitoring Unit 2010) have been released, more insights are

still required to fully understand the consequences of the policy change.

In light of the above, the Swedish Embassy in Kampala commissioned the Basel Institute on

Governance to undertake an assessment of the new system governing the operations of the

Ugandan public sector medicine supply chain. This study has the objective of evaluating the current

system for governance risks by focusing on both the formal and informal determinants of systemic

implementation and performance, following the methodology developed by the Basel Institute on

1 These funds were previously allocated to local governments.

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Governance health governance team. The focus is on the underlying political constraints to

improving governance and involves political power and influence analysis. That analysis informs and

underpins suggested anticorruption and governance-enhancing strategies. It is hoped that this

analysis can inform development partners and civil society organizations sharing the interest and

goal of improving the overall performance of the medicine supply chain and ultimately improving

access to essential drugs for Ugandans.

The opinions expressed in this report are the sole responsibility of the consultants and in no way

represent the position of the Swedish Embassy or the Basel Institute on Governance.

Framework, Approaches and Methodology

This assessment has been conducted following the framework to assess governance of health

systems that has been developed by the Health Governance team at the Basel Institute on

Governance in collaboration with the Swiss Tropical and Public Health Institute.

This analytical approach is based on the conviction that to correctly assess the performance of the

formal institutions of the health systems in low income countries it is necessary to address both the

formal and the informal dimensions underpinning the actions of the key stakeholders involved. For

this reason the methodology involves political power and influence analysis that goes beyond the

technical assessment of rules and regulations in the health sector. The methodology involves

institutional and stakeholder mapping that incorporates insights into who the powerful players are

and what motivates them to behave as they do. These considerations are considered essential for

the design of successful anti-corruption strategies as reflected in the latest literature on the topic

(See for example, Hussman 2011, 7).

In this framework, which is depicted in Figure 1., we have divided the components of good

governance into three groups:

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1. Governance inputs: these refer to how and by whom are the institutions and rules governing the

health system constructed.2 This level of analysis provides the necessary information for an

adequate systemic level assessment of the institutions of the health sector.

2. Governance processes: these are basic attributes characterizing the implementation of

technical and administrative procedures within the health sector.3 A power and influence

analysis is undertaken for the assessment of governance gaps in order to provide insights into

the incentives and constraints to action of the major stakeholders, which ultimately underpin

observed performance.

3. Governance outcomes: these refer to positive qualities that health system outputs should

generate once rules and processes have been designed and implemented.4

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Figure 1Analytical Framework for Governance of Health Systems

2 Analyzing governance inputs entails answering the following questions: Who are the stakeholders involved in defining and designing health policy? (participation) To what extent do government and state officials incorporate other stakeholders into goal setting and policy design for public health decisions? (consensus orientation). Are the health policy instruments commensurate and coherent to the achievement of the stated goals? (strategic vision and policy design). 3 The governance processes emphasized in this framework are accountability, transparency and control of corruption, all three of which are closely interrelated. The presumption being that, if accountability is improved, then corruption is diminished and agents are induced to be transparent in their actions. 4 The governance-associated outcomes that are emphasized in this framework are: responsiveness of the health system to the needs of the population, equitable access of all groups to health services, and efficiency in the use of resources.

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The data collection required to carry out this analysis was obtained through a mixed methods

approach including:

• Desk review of the literature covering the Ugandan Health system as well as political

economy analyses of the Ugandan case.

• In depth semi-structured interviews with a broad range of non-state stakeholders with links

to the Ugandan health system.5

• Focus group discussions (FGDs) with patients and patient advocacy group representatives,

and with a broad range of health service providers.6

Political background After nearly 30 years of autocratic rule and civil war, Uganda returned to elective national

government in 1996. But while elections resumed and political parties were allowed to exist there

remained serious legal impediments to the real functioning of a democratic system (Mattes, Kibirige,

and Sentamu 2010, 3). Until today, Uganda can be characterised as an “imperfect” democracy.

Freedom House characterises the country as being “partly free” and definitely not an electoral

democracy (Freedom House). Furthermore, popular perception of fairness of elections has

registered a steady fall since 1996 (Mattes, Kibirige, and Sentamu 2010, 5). This year, popular unrest

and demonstrations after the presidential elections of 18 February have further underscored this

trend.

One of the characteristics of the Ugandan political regime is, in fact, the extreme centralization of

power in the person of the president. In an article in the Journal of Democracy, Andrew Mwenda

wrote: “The worst obstacle to democratic development in Uganda has been the personalization of

the state” (Mwenda 2007, 28). According to some research, enormous constraints on civil and

political liberties persist in Uganda, whose rulers have only gone as far with political reforms as they

have felt they have needed to in order to satisfy domestic and donor pressures (Tripp 2004).

The Ugandan political regime can be described along the common traits it shares with other

authoritarian systems. Typically, authoritarian regimes maintain power by a mixture of negative

incentives to opposition groups (ranging from outright repression to more subtle control

5 A list of the interviews conducted can be found in Appendix 1. This list is limited to institutional affiliations to protect the privacy of the individuals who collaborated in this study. 6 FGDs were held at the Hotel Triangle in Kampala on the 10th May 2011.

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mechanisms) and positive incentives to supporters (ranging from maintaining basic security in post-

conflict settings to actual material benefits and rewards through patronage), the latter of which

ultimately generate a measure of legitimacy that allows perpetuation in power.

In terms of negative incentives, intimidation and repression of opposition groups and movements

has been and continues to be a common occurrence in Uganda as the post electoral events this

year have shown. The effect of this, according to evidence from research on Ugandan human rights

organizations, has been to promote a generalized culture of apathy and fear (Dicklitch and Lwanga

2003). Some other constraints over opposition and dissent are, however, more subtle. For example,

every year each NGO is expected to renew its registration on the NGO board. This is a mechanism to

regulate NGOs, de facto compromising the extent to which they can demand accountability from the

authorities. During the focus group discussions conducted in this study, representatives of patient

advocacy organizations mentioned that they are quite limited in how they can approach the official

health institutions because there is always the threat that whomever is too vociferous will lose their

registration.

In terms of positive incentives, the fact of the existence of widespread patronage networks was

pointed out in numerous occasions during the interviews conducted for this study. The existence of

these networks should be understood as stemming from a very clear political need for sustained

bases of support and their tenacity is therefore not to be underestimated.

One informant suggested that democracy is problematic in Uganda because it creates additional

incentives for patronage networks to be sought after and reinforced because they represent a

mechanism to generate votes. The Ugandan median voter is illiterate, uneducated and poor, making

it very difficult to vote on an abstract political platform. Therefore, many voters will cast their ballot

for whomever gives them handouts that satisfy immediate needs. From the government’s

standpoint, public office and public goods can be allocated to powerful ethnic and regional groups

so they in turn can mobilize support to the regime.

Along the same lines, it was suggested by some of the stakeholders consulted that decentralization

is a feature of the Ugandan state that contributes to facilitating the distribution of patronage at local

levels. As one analyst argued “with each new district came a raft of government jobs, each one a

patronage opportunity”(Mwenda 2007, 32).

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This assertion finds further backing on published research claiming that administrative and fiscal

decentralization combined with the emergence of multiparty politics have negatively affected local

government effectiveness and solvency in Uganda (Manyak and Katono 2011).

Another consulted stakeholder, who has extensive experience working with communities and

grassroots organizations, pointed out that precisely because of the existence of patronage

networks, it is extremely difficult to discern who is the most powerful person at the district level. It

actually varies significantly from district to district. The actual observed dynamics, this informant

concluded, are a function of individuals, not of institutions. In this sense it becomes apparent how

the prevalence of informal clientelistic networks generates substantial challenges for policy

implementation.

An important consideration, however, is that these institutional malfunctions nevertheless perform a

political function. Institutional fragmentation has become an ally of personal rule as the

fragmentation ensures that no large and effective movement or institution will arise to form a

competing centre of power.

Thus, patronage networks, while providing bases for political support and legitimacy to the regime,

simultaneously undermine state capacity to deliver public goods and also hinder the prospects for

genuine democratization because citizens are incorporated into the political system as clients and

not as right bearers.

This state of affairs in the wider political context sets the stage for the challenges to effective

governance reforms in Uganda. While undoubtedly complex and sensitive, these political realities

should be taken into consideration while designing anti corruption and governance enhancing

reforms if they are to have real political viability and sustainability.

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Overview of the Current Public Sector Drug Supply Chain: Institutions,

Actors and Performance.

Organizational structure of the public sector drug supply chain7

The Ministry of Health (MoH) is the overall responsible entity for national planning and policy

formulation, setting standards and guidelines, capacity building, training, monitoring and evaluation,

provision of technical support and mobilization for the health sector.

The National Medical Stores (NMS), an autonomous government corporation, is the lead agency for

public sector procurement, storage and distribution of pharmaceuticals in Uganda. In order to

safeguard its distributive equity role and ensure that it has a sufficient market to enable it to

breakeven, the NMS has been given a monopoly to supply all public health institutions.

It should be mentioned that, while NMS operates at the center of the medicines supply system,

authority and control over Uganda‘s Medicines Supply System rests with the Ministry of Health. An

overview of the institutional setup for this system is depicted in Figure 2.

The following institutions directly influence NMS procurement:

a) The Public Procurement & Disposal Agency (PPDA) is the main regulatory body in Uganda

involved in procurement across all sectors.

b) The National Drug Authority (NDA) has the mandate to ensure that the drugs available in the

market are of the right quality, safety and efficacy through the regulation and control of

their production, importation, distribution and use. NDA works closely with NMS since it

regulates what medicines are to be included in Essential Medicines List and can therefore

be procured in Uganda. NDA also inspects every manufacturer for which a tender is granted

and is also responsible for licensing pharmacies.

7 Since other reports have already described the current medicine supply management system in detail (World Bank Institute 2010)(Medicines Transparency Alliance 2010)(Office of the Auditor General 2010), this section omits discussion of regulations and technical aspects. The emphasis here is rather on describing the roles and responsibilities of the main institutional stakeholders that are involved in different aspects of the performance of the medicine supply chain.

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The procurement process of drugs and medical supplies in the public sector begins with a needs

assessment, carried out every six months by NMS, and which consists in the calculation of Average

Monthly Consumption. For every procurement, after availability of funds has been certified, a

procurement method is decided upon, tender and bid documents prepared and submitted to the

contracts committee for approval. The rest of the procurement procedures up to receipt of goods

are done in accordance with the “NMS Procurement and Disposal Manual, December 2004” and

PPDA rules and regulations. Once a tender is awarded, NMS instructs the Ministry of Finance

Planning and Economic Development (MoFPED) to make direct disbursements to the pharmaceutical

supplier. 8 Medicines are purchased accordingly and stored centrally.9

NMS distributes medicines to Public Health Facilities10 through two different mechanisms:

i) Push system with kits composed of a pre-specified number and mix of essential drugs and medical

supplies. These kits are sent by NMS every two months to health centres II and III.11 It should be

noted that until very recently NMS delivered these kits to the District Health Offices (DHOs), who

were then in charge of delivering to the health facilities under their jurisdiction. However, on March

31st 2011 it was announced that NMS would, from then on, deliver directly to the health facilities

(Ssebuyira 2011).

ii) Health centres IV and hospitals obtain their medicines from NMS through a pull system where

each facility is responsible to quantify their own needs and place their orders accordingly. District

hospitals and referral hospitals can also receive drugs directly from donors or procure from

recommended private pharmacies (Office of the Auditor General 2010).

Several bodies undertake monitoring activities over the performance of NMS centrally as well as

along the drug distribution chain.

8 One common misconception was the belief that NMS itself controls the medicines budget, while in reality the funds remain with the Ministry of Finance Planning and Economic Development (MoFPED). NMS does the procurement and instructs MoFPED to pay the manufacturer once the tender is awarded. MoFPED only gives NMS an overhead, which is a percentage of the total funds available for medicines (around 15%). In addition to that, NMS also receives direct budget support from the Centers for Disease Control and Prevention (CDC). 9 NMS also receives medical supplies procured by health development partners, which it then stores and distributes based on delivery schedules prepared by the HDPs. 10 Public health facilities can only procure drugs from NMS unless NMS provides them with a certificate of non-availability. 11 Health centers IV may order for additional medicines for HF II and III under their jurisdiction

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Figure 2.

Institutional Mapping of the Ugandan Public Sector Drug Supply Chain

Key: Financial flows

Medicine flows

Monitoring and oversight

Regulatory authority

Informal political influence

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-‐ The Ministry of Health (MoH), having the formal and ultimate responsibility for ensuring

continuous distribution of drugs across the public health sector, has the ability to call NMS

into account through on going monitoring of its activities.

-‐ The Chief Internal Auditor (CIA) within NMS, which carries out pre audits of all financial

transactions, verifies receipts and payments, and reviews internal controls systems.

-‐ The Office of the Auditor General (OAG), which performs financial and value for money

audits.

-‐ The Medicines and Health Service Delivery Monitoring Unit (MHSDMU), created in 2009 as

an autonomous entity directly under the President’s office. Its mandate is to improve

performance of health services by monitoring the management of essential medicines and

services delivery.

The last link in the medicine supply chain is at the health facility level, which is ultimately the

interface for patients to access the drugs procured centrally. In Uganda, health service delivery is

decentralized at the district level, with district authorities under the oversight of the Ministry of Local

Government (MoLG).

Before the policy change, the budget for medicines was under the control of the District Chief

Administrative Officer (CAO), and managed by the District Health Officer (DHO). While these funds

have now been centralized, districts continue to have responsibility over health services and it is not

clear whether formal coordination mechanisms between NMS and DHOs exist to ensure efficient

outcomes. Finally, at the local level Health Unit Management Committees (HUMCs) are meant to

represent the voice of patients and are expected to witness the arrival of medicines and ensure that

they actually reach the community (Economic Policy Research Centre 2009).

Performance and regulatory assessments results.

In order to give proper context to any assessment of the current system, a starting point is to

acknowledge that the system is underfunded. This is the first and foremost issue underpinning

governance weaknesses in the system.12 For this reason it is difficult to exactly determine the extent

to which observed performance weaknesses are caused by lack of resources, inefficiencies or

corruption.

12 MOH has stated its ability to finance 32% of the Minimum Care Package leaving the remainder up to local communities. See (Medicines and Health Service Delivery Monitoring Unit)

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Through consultation with a broad range of stakeholders in the non-state sector, a clear consensus

emerged on an observed improvement in availability of medicines at public health facilities since the

change of policy took effect. This was the appreciation from Development Partners, Multi-

stakeholder groups, Civil Society Organizations, groups of patients and patient advocacy

organizations as well as health practitioners.

Published reports and quantitative data seem to support this perception:

In their annual report 2010 MHSDMU found that since the change of policy the availability had

improved for HC II and III. Also that “embossing of government medicines had, to some extent,

reduced medicines/supplies diversion to private clinics.”

Similarly, the Medicine Price Monitor for October-December 2010 reports that there was “a marked

increase in availability of medicines in the public sector which may indicate that changes in the

medicine supply policy that were effected in 2009 to improve efficiency of the National Medical

Stores are paying off at higher levels of health care […] compared to the previous quarter (Apr-Jun

2010) there was in increase of 11% (to 70%) in medicine availability in the pubic sector. Also that

availability of medicines in rural facilities was higher in this survey compared to previous surveys.

(Uganda Country Working Group 2010).13

In terms of assessments of regulatory quality in NMS the consensus seems to be that the rules and

regulations governing the procurement of drugs and medical supplies at NMS are sound and,

generally speaking, up to international best practice standards:

According to MeTA (Medicines Transparency Alliance 2010) many of the regulations for adequate

procurement are in place: There is a tender committee overseeing public procurement that is

independent from the procurement office. Suppliers for public procurement are prequalified using

explicit criteria and a list of prequalified suppliers and those who failed is available upon request.

Public sector tenders and winning bids are publicly available. However there is no electronic bidding

process. Results of quality testing during procurement are available on request.

13 Medicine price monitor looks at the availability of 40 medicines but only reports on Health Centres level IV and hospitals.

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The World Bank Institute (2010) assessment concluded that Uganda possesses a sound legal and

regulatory framework surrounding procurement, and in the past decade has done much to

strengthen and build upon this framework through reform and development.

In spite of the above, the literature as well as the stakeholder consultations revealed continued

inefficiencies along the drug supply chain. Because other reports have elaborated on these and they

are beyond the scope of this study they will not be touched upon extensively here. Suffice to say

that suboptimal results linked to inadequate estimation of needs, rigid procurement regulations as

well as logistical and drug tracking shortcomings remain in need to be addressed.

Power and influence analysis

A strong consensus stemming from the stakeholder consultations refers to where in the drug supply

management system political power and influence reside. It was a generalised appreciation that the

two most powerful agencies and players in the institutional setting described above are NMS and its

General Manager, and the MHSDMU and its director. It was considered that the main source for the

influence of these two individuals, and thus of their respective institutions, was a direct line of

communication with State House and enjoying the confidence of the President himself.14 In addition,

NMS has become unquestionably more powerful as a result of the very substantial budget that has

been put under its control.

Another point on which there was overall consensus was the fact that the MoH has lost much

influence in the health sector generally and in matters relating to the drug supply chain specifically.

Frequently mentioned was the fact that relations between NMS and MoH are quite strained at the

moment, permeated by mistrust and lack of communication. NMS, it was described by one

interviewee, “does not listen to the MoH anymore.” Furthermore, stakeholder consultations also

suggested MoH has been additionally sidestepped because the policy change has entailed that the

actual accountability incentives of NMS are now directed towards MoFPED, which retains control

over the budget for drugs.

Finally, it was also widely perceived that DHOs are the other actors to have lost most in terms of

power and influence as a result of the policy change. DHOs have lost budget and are being now

sidestepped in terms of deliveries of medicines while nonetheless retaining responsibility for

14 For instance, it is well known that the director of the MHSDMU is a close relative of the president.

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performance at the district level. However, in interviews there was the perception that DHOs, if

organized, could represent a powerful force for change. One to which even the highest levels of

political power would be receptive.

Down the distribution line, at the sub-district level, as was discussed above in the political analysis,

the implementing abilities of the state diminish and as also do the influence and empowerment of

stakeholders. Health staffs at the point of service delivery operate at a level where power is most

atomized. Also, at the end of the line, it would not be a misrepresentation to say that patients, the

group with the biggest stake when availability of essential medicines is involved, are among the least

able to exert influence on the system.

Systems Assessment and Identified Governance Risks

Systems Assessment The institutional and power and influence analyses point to systemic inadequacies impacting the

performance of the drug supply chain due to the confluence of an extreme fragmentation of formal

decision making power and structures combined with an informal excessive centralization of power

in a few actors, especially within NMS.

One of the most obvious manifestations of the formal fragmentation of power and decision making

authority is decentralization. Decentralization has often been portrayed as a mechanism to increase

responsiveness in public service provision by brining decision makers closer to the public and

facilitating greater accountability at the district and community levels. This, however, is not

necessarily the case where the state implementing and monitoring capacities are compromised by,

for example, informal patronage networks.

In the Ugandan case, the president’s policy of decentralization has been quite extreme. The country

went from having 33 districts in 1990 to 112 in 2010 (Nakayi 2010). This decentralization, while

serving clear political purposes as described before, is problematic for at least two other reasons: it

creates problems for the implementation of national policies and it weakens service delivery through

its effect on human resources at the local level.

On the first problem, extreme decentralization creates implementation, monitoring and enforcement

problems for national level authorities. A clear example is the case of the National Drug Authority

(NDA). This agency plays a critical role in relation to drug leakages to the private sector as it

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regulates and licences pharmacies, but it suffers from severe understaffing and lack of institutional

capability to fully perform their functions. There are 1000 sub counties in the country, but NDA has 7

regional centres with an average of 2 staff members per regional office. Thus, they use District

Assistant Drug Inspectors (DADIS), who are employed by local governments (not NDA staff), to help

inspect pharmacies. However, DADIS have been characterized as overwhelmed staff, who have

other duties and responsibilities, they are not paid to perform those inspections, and thus have very

little incentives to do so.

In a similar assessment of decentralization and systemic fragmentation of decision-making and

authority, a 2009 World Bank report concluded that:

“Under decentralization, the proliferation of districts is adversely affecting the capacity of districts to

deliver services concurrent with the increasing demand for health resources (both monetary and

personnel). Human resource management in the health sector depends on a separate agency – the

Ministry of Public Services (MoPS), which provides oversight of all civil servants as well as public

employees. Beyond the typical focus on public schools, the Ministry of Education (MoE) also

supervises the education and training of health workers”(Hoffman and Namakula 2009, 6).

This observation already points to the fact that fragmentation of formal decision-making power is

not limited to the more decentralized administrative levels. At the national (ministerial) level decision

making lines are also often fragmented and /or blurred. The observation applies also to the decision

making process in Uganda’s health sector, which is frequently interrupted, particularly when it

comes to budget allocations, procurement, appointments and recruitments. More specifically, the

MoH lacks effective means for coordinating with other public sectors, such as Public Service and

Local Government ministries. The MoH also lacks a clear communication strategy and the capacity

to communicate their vision with other stakeholders to ensure effective implementation.”(Hoffman

and Namakula 2009, 7)

The decentralization of the Ugandan system also has detrimental effects on health workers. As

pointed out by one of the stakeholders interviewed, the decentralized structure of health service

delivery prevents health workers from developing long-term career paths. Decentralization not only

means workers are confined to working in one district only, but also that there is only so far they can

potentially advance up the district hierarchy after which point career opportunities effectively stop.

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As it was characterized by one insider: decentralization is an institutional challenge and an obstacle

to meaningful reform because is part of the mechanisms through which the regime and its political

constituencies can maintain their own patronage networks, which are in turn an important source of

power at the local level.

The other element that has systemic impact over the medicine supply chain is the centralization of

informal power. One of the consequences of such centralization of political power in NMS that came

through in many of the stakeholder consultations is that it negatively affects the stewardship abilities

of MoH, which is formally charged with setting the national health goals, policies and instruments. In

theory NMS is accountable to the Pharmaceuticals unit at MoH, but in practice NMS is basically

operating on its own. The relationship between NMS and MoH is permeated by mistrust and

unwillingness to cooperate.15

An aggravating factor is lack of clarity. For example, there was confusion among stakeholders about

the existence (or lack thereof) of a MoU determining division of roles and responsibilities in the new

scheme between MoH, NMS and MoFPED. As it appears, there is such a MoU but has not been

made known, it is unclear whether this is still a draft version or a final one and very little is known

about it contents. Lack of clear, reliable information about who should be doing what in the

decision-making processes affecting the drug supply chain is undoubtedly an element facilitating

discretionary exercise of centralized informal power.

Identified Governance Risks Two major sources of concern in terms of governance weaknesses were identified in the literature

as well as in the consultations with stakeholders undertaken for this report: 1) lack of transparency

and accountability at NMS and 2) continued leakages of drugs along the distribution line and

frequent reports of public sector drugs being sold in private pharmacies. Both are analysed and

discussed next.

Lack of transparency and accountability at NMS Firstly, it is important to be clear that, from all available reports and audits as well as from the

consulted stakeholders’ knowledge and experiences, there is no evidence suggesting grand scale

15 It was mentioned that NMS views MoH officials as inefficient and lacking integrity. Furthermore, it was suggested that suspicions go as far as NMS questioning the validity of SURE data stocks reports, while at the same time failing to produce its own.

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corruption taking place as a consequence of the centralization of the medicines and supplies budget

under the control of NMS.

Rather, the criticism expressed is based mostly on observation of continued inefficiencies, many of

which could presumably be attributed to lack of adequate implementation of rules. For example, it is

widely reported that health facilities often receive items they did not ask for and which poorly match

the disease burden afflicting their communities. In a representative comment of the types of

criticism that were voiced during stakeholder consultations, pharmacists and other health

professionals participating in the FGDs expressed the opinion that it would be good for NMS to share

their quantification of needs estimates with professionals in the field before tenders came out.

Therefore, the concerns expressed have to do mainly with lack of information about the internal

processes that give rise to those inefficiencies in NMS performance.

An interviewee said that some of the observed problems at NMS might actually stem from decision-

making aimed to gain efficiency and value for money but without proper technical expertise on what

is best practice and how to deal with the protocols of funding agencies. For example, it was

mentioned that recently NMS made a decision on procuring for ACTs which involved ordering only

the larger 24-pill packs (cheaper than paediatric doses) assuming that health facility staff could go

ahead and split up the contents before dispensing according to need based on patient’s age etc.

Global Fund found this unacceptable and the GF procurement (R4) was rejected.

One issue that some stakeholders brought up relates to the adjudication by MoFPED of a

substantive budget for ARVs and ACTs that needs be procured from one single source: Quality

Chemicals Industries. Quality Chemicals is a Ugandan Pharmaceutical company, which was partly

owned by the Ugandan government until recently. However, stakeholders complained about the

lack of information on what is the price at which these medicines are procured. One interviewed

stakeholder said tenders adjudicated to Quality Chemicals involved prices usually between 50-70%

above international market prices. While this deviates from international best practice, it has been

an open and transparent decision made by the government in order to promote the development of

a national pharmaceutical industry.

In sum, the concerns expressed about NMS’s performance were mostly about the lack access to

crucial information such as procured prices; methodology used for needs assessment and generally

financial accountability with regards to the recentralized budget. Criticism was also recorded on a

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lack of responsiveness on the part of NMS to complaints made by hospitals in the sense that there

are no feedback mechanisms through which misplaced or faulty orders can be reported and

returned. Overall, there was the impression that NMS has become a closed, tightly guarded entity. .

Generally speaking, the consensus is that it is extremely hard to obtain information from NMS.16

Leakages of drugs along the distribution line Reports on missing and unaccounted drugs continue to be a source of concern and a reflection of

weak governance especially towards the end of the distribution line. As mentioned before, the

extent to which missing drugs are a result of outright corruption or of inefficiencies in the system is

difficult to establish with precision.

Indeed, efforts are being made on several fronts to develop better and more efficacious tracking

systems that should help to simultaneously reduce inefficiencies and identify pilferage.17

In any case, the fact that government embossed drugs still continue to show up for sale in private

pharmacies where on going prices are reported to be much higher than their market value is a clear

indication that corruption along the distribution line continues to be a real concern.18

The crucial element along the distribution line to be identified here is human resources. An

understanding of what and how determines the incentives of the staff involved in the distribution,

storage and dispensing of drugs in public facilities is a prerequisite to address the issue of leakages

and shall be given due attention below.

This section so far has described the formal aspects and main actors in the current system for

procurement and distribution of drugs in the Ugandan public sector. Two main instances of

governance weaknesses were identified along the system through a broad stakeholder consultation

process. In order to allow adequate analysis and provide a deeper understanding of the

underpinnings of those two governance “red flag” areas, the following section presents an analysis

16 An expression of this can be very easily verified simply by visiting NMS’s webpage, which has fields designed to provide information on budget, suppliers, national price survey among others, but are all empty displaying a note reading “No information has yet been uploaded” http://www.natmedstores.org/, last accessed 23 May, 2011. 17 For example the Ugandan Government in collaboration with the SURE programme is developing a monitoring system to track deliveries from district stores to Health Centres. WHO and UNICEF, with funding from DFID, are putting forward a pilot to track drugs using sms technology. 18 A different but certainly related problem that appears to very widespread is that when the delivery truck arrives with medicines at the lower level health facilities, patients (real and potential ones) flock the facilities trying (and many times succeeding) to take medicines when they are available in order to stock up for when sickness strikes and the health facility might be out of stock. Needless to say this lack of trust in the future availability of medicaments results in a self-fulfilling prophecy where entire supplies are depleted within a couple of days.

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of the embedded incentives to accountable (or non-accountable) behaviour stakeholders in those

governance risk areas face.

Assessment of governance processes: accountability, transparency and control of corruption This section analyses the incentives and constraints to action of the key agents at the two previously

identified critical areas for governance risks. It begins with the analysis for the case of NMS followed

by the analysis for health facility staff.

NMS Incentives/constraints accountability analysis A first appraisal is that the NMS General Manager (GM) appears to be operating under substantial

criticism and political pressure. This is because, as many of the stakeholders consulted for this

report brought up, centralization of the budget for medicines was an abrupt and unilateral

presidential decision, brought about without consultation and against the will of important

stakeholders. For this reason, the success of NMS under the new policy is viewed by many as a

function of the personal relation of the GM with the president.

This sets the context for a situation in which NMS performance is being under scrutiny by, first and

foremost, those stakeholders whose power diminished as a result of the policy change (i.e. MoH

and DHOs), but also from civil society and patient advocacy organizations, donors, and health

practitioners.19

Furthermore, strong criticism of NMS performance has been also expressed in several official

assessments and reports. For example, the MHSDMU’s annual report for 2010 concluded that under

the new system “Medical supplies largely do not seem to reflect an appreciation of the disease

burden” (Medicines and Health Service Delivery Monitoring Unit, 33).20 Further corroborating this

situation the Auditor General’s “Value for Money Audit Report on Procurement and Storage of Drugs

by National Medical Stores” harshly criticised NMS’ inability to adequately quantify needs concluding

that “the result of this situation was perpetual stock deficiency at health centres resulting from

19 There was even mention by one of the stakeholders consulted for this assessment that there had been a letter from the president recently expressing concern about NMS performance. 20 It should be said that some mismatch between needs and supplies is to be expected in a push system. Several of the

stakeholders consulted acknowledged this and agreed the push system makes sense as a first step to increase availability on the ground but also should bee seen as a transitory measure with the longer term goal of training HC II and III staff to properly file orders according to needs.

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NMS’s failure to meet customers’ orders” (Office of the Auditor General 2010, 19).21

The media has further politicized the issue. New Vision, for example, reported on the findings of the

OAG report in a very negative light, saying that “The Auditor General's report on National Medical

Stores (NMS) has embarrassing revelations that can only be described as obscene” (New Vision

2010). The article went on to inform “In an opinion poll conducted by New Vision recently, the

respondents indicated that the shortage of drugs in government health facilities was one of their

most pressing problems that politicians must address while campaigning for the 2011 elections.”

Thus giving prominence to the results of the audit to make a political statement in the context of a

sensitive electoral campaign.

The incentives faced by NMS management are also dictated by a political context in which policy

decisions may be taken unilaterally and abruptly (like the pre-financing of NMS itself). This political

scenario generates pressure to perform, especially if it is indeed the case that the president has

expressed doubt about performance of NMS.

Another issue potentially impacting the incentives facing NMS is that several stakeholders consulted

shared the view that the pre-existing institutional capabilities at NMS have been in all likelihood

overwhelmed by the sudden and substantial increase in budget and drug quantities it is meant to

manage. A major problem reported is that the causes for observed inefficiencies cannot be

identified as long as NMS remains closed to open scrutiny. Practitioners’ and pharmacists’

representatives argued that their input could be valuable to improve efficiencies at NMS given their

technical knowledge and exposure in the field. However, as one interviewee said: “NMS does not

like to ask for help.”

This situation suggests the NMS GM would be especially concerned about disclosing information on

less-than-optimal outcomes or inefficient procedures that could potentially be used as evidence to

generate pressures to revert the pre-financing policy decision. There is no evidence stemming from

discussions among non-state stakeholders that there is a desire to push for that. To the contrary,

most of the consulted stakeholders asserted that in fact the policy change seemed a reasonable

one. However, the response and signals received from NMS and its GM in reaction to the intention

21 It should be noted that some of the information used by the OAG’s report dates as far back as FYs 2006/7 and 2007/8, well before the system change and therefore some of the implications of the findings cannot be attributed to the actual system.

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behind this assessment would suggest that there is in fact concern within NMS about other

stakeholders seeking to reverse the policy.

Thus, NMS general management, faced with suspicion and pressure from stakeholders coming from

above, below and horizontally, has reacted by closing up about internal procedures and

performance indicators.

In sum, the situation can be characterized as a vicious circle in which the more NMS closes itself to

outside scrutiny, the more suspicions are generated among other stakeholders, and the greater the

incentives to NMS to keep potentially inefficient internal procedures, and performance indicators

away from outside scrutiny. This in turn perpetuates the suspicions and mistrust of other actors.

Health Facility Workers: Incentives/constraints accountability analysis Health workers, especially at the facility level, are key actors with regards to issues of drug leakages

and pilferage. For this reason, in order to properly address corruption and governance risks at this

level in the health system, an evaluation of workers’ incentives and constraints to action is essential.

A survey conducted among health workers by the MHSDMU revealed that at the top of the list of

concerns for this group quite unequivocally were money and career progression. On these two

aspects, however, the prospects of an average health worker in Uganda are quite grim. Although

government increased the salary of lower medical staff recently, their pay remains among one of the

lowest in East Africa. According also to the MHSDMU report: A number of staff in the health centres

visited had for months, and in some cases, years not received salaries (Medicines and Health

Service Delivery Monitoring Unit, 52).

The distribution of health workers between urban and hard-to-reach areas is inequitable because

incentives to encourage staff to work in the latter districts are few: opportunities for career

advancement are limited, the availability of staff accommodation restricted, access to communal

services and training are insufficient, working conditions are poor, and workloads are excessive. As

a result, absenteeism is at a high rate (52 percent), turnover of health personnel is high,

performance is poor, and productivity is low.22

22 A detailed description of the poor conditions faced by health workers to perform their duties in two district case studies can be found in (Kawooya Ssebunya 2009)

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Besides the undoubtedly harsh conditions described above, another necessary element that needs

be added to understand incentives to potential illegal actions in handling public sector drugs is the

profit motive. It is a widely acknowledged fact that medicine prices in the private sector are

substantially inflated. . For example, it has been reported that a dose of treatment that costs

Shs93,000/= at the government rate is at Shs450,000/= in the private sector” (Medicines and Health

Service Delivery Monitoring Unit, 32). Uganda does not have a policy to regulate medicine prices,

which may be part of the problem, (Medicines Transparency Alliance 2010) and there is no national

medicine price monitoring system for retail/patient prices.

Furthermore, there is a significant problem with unregistered pharmacies in the private sector. The

OAG has estimated that up to 50% of all pharmacies have not been certified and registered by the

NDA. This situation involving price distortions, lack of regulation and abundance of informal

pharmaceutical retailers provides ample incentives to divert medicines from the public to the private

sectors.

Complementing the picture is the fact that monitoring of health workers is also deficient. While

districts are responsible to conduct regular inspections at the facility level, these in fact rarely occur.

Also reported was the fact that often, even when monitoring visits do occur, the inspector fails to

give an accurate report in the state of affairs, in many cases reporting positive conditions when in

fact the situation is quite dire. In other words, there is no coherent internal sanctioning or control

mechanism to enforce disciplined administration of the human resources.

Lack of monitoring and enforcement capacities are not exclusive flaws of districts as other

professional bodies, such as the Pharmaceutical Society of Uganda (PSU), lack legally binding

policies against which to enforce disciplinary action (Medicines and Health Service Delivery

Monitoring Unit, 81). Enforcing accountability of service providers to the population or government

also lags because of the lack of a clear management structure. Hospitals and health centres (HCs)

do not have “real managers” with authority, and those in charge tend to be “on

assignment”(Hoffman and Namakula 2009, 7).

Finally, on the topic of monitoring, quite clearly the agency that is most active and which, as

discussed before, has substantial political power is the MHSDMU. This organization prides itself on

setting the standard for exemplary fight against corruption. The degree to which their approach is

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effective or even positive is however unclear. The stakeholders consulted for this study unanimously

described the monitoring strategies of the Unit as “militaristic.” There were many reports and

anecdotal references to health workers being taken under arrest by the Unit’s monitoring teams

without adequate inculpating evidence. As a result, health facility staff are terrified of those visits.

Stakeholder consultations shed some light into how this “militaristic” approach was actually

generating precisely the wrong incentives among workers. It was mentioned that health workers,

fearful of stocking out when the MHSDMU paid a visit, were actually withholding drugs from patients

in order to have something to show should the Unit teams inspect their facilities.

A substantial problem with monitoring as is currently applied along the distribution line and

especially MHSDMU’s approach is that as soon as inspectors leave everything goes back to where it

was because the incentives for the staff and other actors involved remain the same. In the end,

communities do support the unregistered pharmacists and the illegal practices because these are

the mechanisms they have at hand, through which, when they or their families become ill, they can

access any measure of care.

The result is that health staff are demoralized and, having no reassurances that their positions can

lead to better remuneration or promotions, the actual incentives under which they are operating are

negative. From an individual cost-benefit analysis it makes sense for health workers to incur in

actions such as absenting themselves from work to seek other incomes, or to take advantage of any

opportunities for material gain through misuse of resources accessible and available to them.

Suggested anticorruption and governance enhancing strategies for the Ugandan public sector drug supply chain

This report has provided an assessment of governance risks in the Ugandan public drug supply

chain based on a political power and influence assessment of institutions and actors. One of the

implications of this assessment is that the policy change to pre-finance NMS entailed a redistribution

of power among different stakeholders, which can be characterized as a zero sum game. To begin

to search for politically feasible strategies to improve governance outcomes it is therefore helpful to

question whether it is possible to generate proposals amounting to a positive sum game for the

relevant stakeholders. It goes without saying that acknowledging the underlying political realities is a

first step in this direction.

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The following suggested strategies for improving governance along the Ugandan public sector drug

supply chain are centred around the two major systemic flaws identified (excessive centralization of

informal power and excessive fragmentation of formal power) as well as the two institutional

junctions identified for governance risks (NMS and human resources at the facility level).

Excessive centralization of informal power: NMS

The Ugandan health sector currently suffers from a clear mismatch between formal attributions and

actual political power and influence. One longer-term objective to improve system effectiveness

should be to restore MoH’s role as steward of the health system with a leading voice and effective

decision-making power. In the short term, the political power and influence analysis suggests that

NMS should be targeted as the key agent capable of generating significant governance enhancing

changes.

While centralization of decision making power is not in and of itself a governance risk, it becomes

one when that power is discretionary and lacks adequate accountability checks. This is the issue

that needs to be addressed.

To improve transparency and accountability at NMS, it will be necessary to break the current vicious

circle that generates unwillingness to act transparently, on the one hand, and suspicions and

criticism, on the other. This would involve trust-building measures at different levels and among

different actors.

Generating incentives for NMS to become more willing to share information involves sensitive

political work, as there is no technical or regulatory formula to make a politically powerful agent

more transparent and accountable. This is not to say, however, that it is impossible to achieve. With

true coordinating efforts, development partners can take the opportunity to exercise the

unquestionable leverage they possess to promote the effective dialogue that would be needed.23

Given that major stakeholders openly recognize that centralizing the budget and decision making

23 A key strategic partner to bring on board this type of initiative would unquestionably be CDC, the only development partner providing budget support directly to NMS. A new agreement covering the next five years has been recently approved for an amount close to 50 million USD in direct budget support.

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power over procurement, storage and distribution of drugs was indeed reasonable, one initial

political task would be to communicate in an effective manner to NMS management that the aim of

key non-state players is not to revert that policy. This would include an open acknowledgement of

the observed and accepted improvements in numbers of medicines accessible since the policy

change and a clear statement of support to the current system.

An orchestrated political statement in that direction could open the way to NMS beginning to

acknowledge that it is in its interest to be more open and transparent. Furthermore, the actual

political climate might even be conducive to a greater receptiveness to this type of approach. In

times of political instability and growing opposition, as is the case now, even regimes that are

typically closed and secretive can find benefit in the development of new or strengthened sources of

support and legitimacy.24 With due political sensitivity this momentum can be effectively exploited.

It would remain a political task for the agents taking on this initiative to identify within the NMS

establishment those individuals that can be expected to be more receptive to moving towards

modes of legitimation based on support and collaboration with other non-state stakeholders rather

than relying exclusively on direct (and informal) access to the higher echelons of political power.

The need to share information on processes, allocative decisions and outcomes would evidently

need to constitute a central point in the agenda for a dialogue with NMS. However, it would be an

extremely important exercise for the interested stakeholders, Including donors, to discuss and agree

beforehand on what would be acceptable transparency and accountability indicators that they

would like to see from NMS. Claims about lack of transparency and accountability should be

complemented with operational definitions of what is exactly missing, especially given the

generalized agreement by technical reviews and assessments that the regulatory framework

governing NMS is adequate. This would provide for a concrete and constructive starting point that

could eventually also lead to setting mutually agreed upon milestones and targets.

The continued development of creative partnerships to develop and implement better technical

procedures (such as accurate estimation of needs, development of grant proposals for funding

opportunities, and mechanisms for monitoring and tracking drugs along the distribution line) could

24 For instance, and given the extensive negative coverage that stock-outs have received in the media and the political repercussions this presumably had, it would possibly be attractive from the regime’s perspective to receive favorable coverage of initiatives to improve NMS performance through collaboration with CSOs and DPs.

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potentially generate positive political synergies. Collaboration with credible, non-state partners can

be seen as a politically inexpensive way to generate much needed legitimacy vis-à-vis the health and

patient advocacy CSOs, and can also aid in the development of shared responsibility for obtained

results instead of a one-sided finger pointing which generates high and adverse political stakes.

The current political situation can be seen as an opportunity to generate greater openness within

NMS. Improving governance as a way to regain political legitimacy can be of interest to political

elites if the political costs of the status quo become too high. This therefore needs to be facilitated

with careful consideration of the political purposes that weak governance has served the regime so

far.

Excessive fragmentation of formal power, human resources and preventing drug pilferage

Undoubtedly, serious accountability weaknesses exist when health workers succumb to incentives

to abuse their positions in order to profit from the sale of life saving drugs at the expense of patients.

As discussed above, in order to understand accountability weaknesses one has to look not only at

monitoring and enforcement of sanctions but also at the underlying incentives to action that

ultimately underpin the cost-benefit analysis that leads to the decision whether to steal medicines or

not.

As has been discussed before, a substantial part of the problem stems from the desperate

conditions many health workers at the community and district levels face. They experience

overwhelming workloads without being adequately remunerated and without having expectations of

career advancement.

Addressing corruption at this level requires a comprehensive approach that brings together

attention to all different components of accountability and that makes a career in the health sector a

viable, attractive avenue to personal advancement. This would involve not only better remuneration

and promotion possibilities, but also adequate monitoring and enforcement mechanisms. The

institution of a civil service-type scheme for health workers could address all such issues by

generating the correct incentives for workers to actually seek to adequately store, manage, and

dispense drugs.

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A clear path for advancement along the health sector hierarchy could be usefully tied to attainment

of personal milestones by the health worker. Milestones could include, for example, a requirement

to spend a period of time serving a remote rural area as a requisite to move to the next level.

Attainment of a minimum performance record, based on patient or community scorecards, would

be an effective route to generate positive incentives for the worker. Direct community monitoring

mechanisms have the added value that evaluation and monitoring are tied to service provision at

the workplace and not based on sporadic visits of inspectors, which leave things unchanged after

they leave.25

Engaging the MHSDMU in a dialogue, in which the drawbacks of a militaristic approach to monitoring

could be laid out and alternatives discussed, would be an essential move towards putting in place

positive incentives to accountability at the local level.

However, it should be acknowledged that there are very serious challenges to developing a health

sector civil service, including some having to do with the administrative decentralization of the

Ugandan state. One obstacle to the creation of a merit-based system for human resources

management and promotions is that, because formal responsibility for service delivery lies with the

district and there has been such a proliferation of them, the prospective career path of the health

worker is cut short at the district level under the current system. In fact, one of the stakeholders

consulted suggested that recruitment should be recentralized, not to a central authority but rather

to a district level recruiting agency to allow for movement of health workers across districts.

Therefore, in order to address corruption risks along the drug distribution line a systemic approach is

needed. This requires the involvement and coordination of the full range of government agencies

with inputs and decision-making power over different aspects associated with both drug distribution

responsibilities as well as human resources.26

25 In favour of this type of approach there is evidence of successful use of community level monitoring of drugs in Uganda. This work, reported by (Björkman and Svensson 2010) suggests that when local NGOs encouraged communities to engage with local health services, they were likely monitor providers very effectively, leading to more responsive delivery. 26 The list includes MoH, NMS, MoFPED, MHSDMU, NDA, DHOs, the Ministry of Local Government (MOLG), and the Ministry of Public Service (MOPS).

32

However, perhaps the most problematic obstacle to developing a merit-based career path has to do

with the politics of decentralization. As has been discussed above, at the district level the human

resources decisions for health centres represent an integral part of the spoils available to feed local

patronage systems.

Again, the actual political juncture can probably be harnessed to begin to break detrimental

methods of obtaining political support and legitimacy. DHOs, as was mentioned above, are among

the political actors who lost as a result of the centralization of decision-making power in NMS. This

state of affairs could potentially be harnessed to propose new modalities of political legitimation and

empowerment of district level authorities through, for example, partnership with communities to

monitor and reward the successful work of health facility staff. Moreover, increasing the support

bases of DHOs through community participation could play to the strategic political advantage of

district authorities vis-à-vis NMS in potentially renegotiating some of their lost clout.

As said before, the fact that potential profits from drug sales through unlicensed pharmacies are

high contributes to the mix of negative incentives. Therefore, an additional element that would need

to be addressed to fully close the circle would be to improve on the monitoring and regulation of

pharmacies. Already there is an initiative to verify whether a pharmacy is licensed or not through

the use of an SMS system but this is not very well known. Also attention would need to be given to

the constraints under which NDA operates, including the lack of an allocated budget (it relies on the

fees it charges for its regulatory and licencing activities, which is not in adherence to best practice

for regulatory bodies) and serious human resources shortcomings.

Finally, in order to optimize the effectiveness of initiatives to attack corruption and governance risks,

a concerted effort to coordinate actions and programs and to present a unified front would be

required, not only among development partners, but between development partners and CSOs in

the health and patient advocacy fields. Making use of and combining on going programmes and

initiatives to promote the ends described above through a unified front would be an enormously

important first step to really make the most of the potential political leverage of the donor

community and civil society combined.

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References Björkman, Martina, and Jakob Svensson. 2010. WHEN IS COMMUNITY‐BASED MONITORING

EFFECTIVE? EVIDENCE FROM A RANDOMIZED EXPERIMENT IN PRIMARY HEALTH IN UGANDA. Journal of the European Economic Association 8, no. 2‐3 (April 5): 571-581. doi:10.1111/j.1542-4774.2010.tb00527.x.

Dicklitch, Susan, and Doreen Lwanga. 2003. The Politics of Being Non-Political: Human Rights Organizations and the Creation of a Positive Human Rights Culture in Uganda. Human Rights Quarterly 25, no. 2 (May): 482-509.

Economic Policy Research Centre. 2009. Governing Health Service Delivery in Uganda: a Tracking Study of Drug Delivery Mechanisms. Research Report no.1. August.

Freedom House. Country Report Uganda 2010. Freedom in the World. http://www.freedomhouse.org/template.cfm?page=22&year=2010&country=7940.

Hoffman, Jariya, and Valentine Namakula. 2009. Uganda Health System Support Project Governance and Accountability Action Plan Final Report. World Bank, December.

Hussman, Karen. 2011. Addressing corruption in the health sector. Securing equitable access to healthcare for everyone. U4 Issue. U4 Anticorruption Resource Centre/ CHR. Michelsen Institute, January.

Kawooya Ssebunya, Andrew. 2009. Public goods delivery in Uganda: Exploring local governance forms & leadership that work for the poor. Africa Power and Politics Programme, December.

Manyak, Terrell G., and Isaac Wasswa Katono. 2011. Impact of Multiparty Politics on Local Government in Uganda. African Conflict and Peacebuidling Review 1, no. 1: 3-38.

Mattes, Robert, Francis Kibirige, and Robert Sentamu. 2010. Understanding Citizen’s Attitudes to Democracy in Uganda. AfroBarometer Working Paper 124, October.

Medicines and Health Service Delivery Monitoring Unit. Annual Report 2010. Medicines Transparency Alliance. 2010. Report on the Uganda Phramaceutical Sector Scan. Part of

Component 1 of MeTA Baseline Assessments. June. Mwenda, Andrew M. 2007. Personalizing Power in Uganda. Journal of Democracy 18, no. 3: 23-37. Nakayi, Florence. 2010. Uganda’s districts since independence. New Vision, August 27.

http://www.newvision.co.ug/D/8/12/730140. New Vision. 2010. Quick Shake-Up Needed at NMS. New Vision, August 20, sec. Editorial.

http://allafrica.com/stories/201008230715.html. Njoroge, John, and Molly Lister. 2009. Hand-on minister gets shock in clinic. The Independent, July

21. http://www.independent.co.ug/News/news-analysis/1292-hands-on-minister-gets-shock-in-clinic.

Office of the Auditor General. 2010. Value for Money Audit Report on Procurement and Storage of Drugs by National Medical Stores (NMS). March. http://www.oag.go.ug/annual_reports.php?dId=7.

Ssebuyira, Martin. 2011. NMS Takes Drugs to Villages. Daily Monitor, April 2. http://www.monitor.co.ug/News/National/-/688334/1137048/-/c3apbfz/-/index.html.

Tripp, Aili Mari. 2004. The Changing Face of Authoritarianism in Africa: The Case of Uganda. Africa Today 50, no. 3: 3-26.

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Stakeholders Consultations Report Uganda. December.

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Appendix 1

List of Institutional Affiliations of Stakeholders Interviewed

-‐ CDC – Centers for Disease control and Prevention

-‐ Clinton Health Access Initiative

-‐ Danida- Danish International Development Agency

-‐ DFID- UK Department for International Development

-‐ HEPS-Uganda Coalition for Health Promotion and Social Development

-‐ MeTA-Medicines Transparency Alliance

-‐ Office of the Auditor General

-‐ SURE Programme. Securing Ugandans Right to Essential Medicines

-‐ UNHCO Uganda National Health Users’/ Consumers’ Organisation

-‐ UNICEF

-‐ WHO-World Health Organization

-‐ World Bank

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