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Official Response of the National Drug Authority (NDA) to a petition by Mark Kamanzi, the interdicted Head Legal Services, National Drug Authority on alleged illegalities and irregularities at the Authority

Monday, 16th April 2018

Official Response of the National Drug Authority (NDA) to a petition by Mark Kamanzi, the interdicted Head Legal Services, National Drug Authority on alleged illegalities and irregularities at the Authority

The National Drug Authority has been made aware of a petition by Mark Kamanzi, the interdicted former   Head, Legal Services alleging "various illegalities and irregularities perpetuated by the National Drug Authority."

We have reviewed the said allegations and wish to categorically dismiss the allegations as false and malicious.

Whereas Mr. Kamanzi is a lawyer and a former head of legal services at the Authority, the said allegations display sheer and or deliberate ignorance of the laws regarding the set-up and management of the National Drug Authority and other laws pertaining to the issues raised in the petition such as the Public Procurement and Disposal of Public Assets Act (2003).
We therefore wish to respond as follows:

1)    Mismanagement of Resources

a)    Fraudulent Expenditure: Section 54 (5) of the National Drug Policy and Authority (NDP/A) Act provides that; "an employee of the drug authority shall not, in his or her personal capacity, be liable to any civil or criminal proceedings in respect of any act done or omission made in good faith in the Performance of his or her duties under this Act." 


In civil suit referred to Miscellaneous Cause No. 186, High Court (Civil Division), brought by Ms Florence Nakachwa, an employee of the Authority, Ms Donna Kusemererwa, was sued in her personal capacity, for actions executed in her official capacity.


She was represented by Lumonya Bushara and Co. Advocates. 


The Authority (board) in their 13th September 2017 meeting made a resolution that Ms. Kusemererwa's fees should be refunded by the Authority. The money was paid to her personal account as it was a reimbursement for monies already paid out to her lawyers.


NDA"s HR Manual also provides for such a payment.

 

b)    Illegal payment for the ED's husband to travel to Canada: Ms Kusemererwa as SA to the Authority is provided with a contractual benefit- a Business Class travel of self and spouse once a year. Ironically this contract was witnessed by Mark Kamanzi, the then legal counsel for NDA, who is now calling the expenditure illegal. 

 

c)    UGX1 billion for incineration of expired drugs: Medicines regulation is aimed ultimately at ensuring patients have safe efficacious and quality medicines.  There was a big public outcry that expired medicines withdrawn from circulation were finding their way back on to the market especially in herbal preparations. The last time a massive exercise to dispose of unwanted and expired drugs from 6,619 private and public health facilities was carried out was in 2012. 


The Authority (board) in their 27th September 2017 meeting; concerned about the stock piles of expired, damaged and unwanted medicines in public health facilities with no budget in the Ministry of Health to dispose of them, resolved, as a onetime activity to have these medicines withdrawn from circulation and incinerated.


The Authority further allocated a budget of UGX1, 000,000,000 towards this cause.


Since then, a collaborative approach has been put in place between Ministry of Health, National Drug Authority (NDA), National Medical Stores (NMS) and Joint Medical Store (JMS) towards the successful implementation and execution of this exercise.


To date, 168 tonnes of expired drugs have been destroyed at National Environment Management Authority (NEMA) approved sites.


NDA is also developing a long term strategy to ensure that expired/unwanted medicines are routinely safely and appropriately disposed of.


d)    Payments of UGX 2.8 Billion based on illegal positions: The order of the high court did not quash the entire National Drug Macro Organisation Structure but rather stayed the implementation of the organogram only as far as it was inconsistent with the law.  None of the positions mentioned Directors, Managers are inconsistent with the law.  The Authority has since rectified the anomalies identified and the new structure was approved by the Ministry of Public Service and all the payments made thereof are in the 2017/18 budget which was approved by the Health Minister and was submitted to Ministry of Finance Permanent Secretary/Secretary to the Treasury (PSST) in line with the Public Finance Management Act. 


Additionally, the High Court order arising out of Miscellaneous Cause No. 186, has been challenged before the Court of Appeal (Miscellaneous Application No. 365 of 2017). The Court of Appeal on 15th December 2017, issued an order staying the execution of the High Court order, till the main appeal has been disposed of.

 

e)    Massive recruitment of staff: NDA has been chronically understaffed over a decade and unable to deliver on its mandate.  The 4th and 5th Authority committed to resolving this but were unable to complete the exercise due to lack of an organogram. Once the organogram was finalised and the establishment defined, NDA began recruitments which process is still ongoing.  All recruitments are in line with the approved establishment and approved budgets.  


As indicated in (d) the organogram was only set aside in as far as it did not include positions stipulated in the National Drug Policy and Authority (NDP/A) Act.

 It was not quashed in its entirety.  In any case an order has been obtained from the Court of Appeal staying all the orders from the High court. 

 

2)    Exorbitant payments to law firms:

The majority of the cases where fees have been paid in 2016/17 and 2017/18 preceded the current management of the Authority and CEO. It is interesting that one of the biggest awards made in this period relates to a matter handled by Mark Kamanzi following an arbitration that resulted in an arbitral award of USD38,350 and UGX 13,552,000  in loss of  profit and general damages and cost of the award.


It should also be noted that following the suspension by the Authority of Mr. Mark Kamanzi, the then Head of Legal Services in June 2016 and his subsequent interdiction in February 2018, the Authority has found it necessary to outsource some key cases especially those requiring key expertise.

3)    Illegal payments to Dr. Christine Ondoa:

This is a malicious allegation intended to bring the image of a distinguished member of Ugandan society into disrepute. Appointments to the Authority are made by the Minister of Health and stand until withdrawn by the Minister of Health. Ms. Christine Ondoa was not paid a single allowance once her appointment was terminated by the Minister.

 
4)    Credit facilities to private entities:

The only credit given is to Ministry of Health and Ministry of Health Partners implementing Government of Uganda programs. Medical Access is implementing a U.S Government funded program to supply ARVs to the Ugandan population and that is the only reason they get credit which they pay off within 30 days.


It has been stated categorically that as Accounting Officer Ms Kusemererwa cannot deny services to Government because of non-payment and yet Government and Government partners do not pay fees for NDA services such as verification of imports upfront.  If anything the current Accounting officer has taken steps to limit credit to Government and Government related agencies contrary to what was happening prior to 2016.

 

5)    Renting of offices owned by a pharmaceutical company:

The allegations that NDA is occupying "showy" offices at a monthly UGX500,000,000 per month is absolutely not true and the offices were lawfully and competitively procured as show below.


NDA ran an advert for procurement of 1,200 square meters of office space in The New Vision of 13th December 2016, inviting all interested bidders.


NDA received six bids from interested bidders. The evaluation of bids was conducted by the approved evaluation committee and M/S Rumee Investments Limited was evaluated as the best evaluated bidder (BEB) with the lowest cost of UGX42, 847 per square meter per month. This translates to UGX 51,516,567 per month for 1,200 square meters and UGX 616,998,813 for a year.


The Government Valuer (GV) assessed the suitability of the premises and the rent of the building. The GV established that the market rate for a building in similar prime areas goes for UGX 90,138,000 per month for 1,200 square meters.


This correlates with independent market valuations such as the Knight Frank, Uganda Property Market Update, H1 2017 that puts such prime space at between $15 (UGX53,976) and $17 (UGX61,173) per square metres.


The 201st Contracts Committee awarded the contract to the BEB, M/S Rumee Investments Limited as required by the law. The Solicitor General in the letter dated 6th April 2017, cleared the contract.


The alleged conflict of interest is far-fetched as the PPDA standard bidding document (Instruction to Bidders, Part 4.4) defines conflict of interest and this definition does not include the relationship between NDA and M/S Rumee Investments Limited. Additionally the bidder, in their bid submission sheet, declared that they did not have any conflict of Interest.


Information that we have indicates that M/S Rumee Investments Limited, is an investment company that is not engaged in drugs manufacturing as alleged. All the documents submitted by the said company do not show that the bidder manufactures or sells medicines.


It should also be noted that with the approval of NDA's 5-year Strategic Plan (2016-2021) and the new staff structure to deliver on that plan, NDA would be expanding both in depth and breadth and this necessitated more space to accommodate both the human resources and other technical facilities.


At the time of vacating the NDA-owned property, it was already over-congested and had a number of structural weaknesses which made it an unsafe place to work in. 


It is true that NDA owns prime land in Nakasero and is in the process of developing her permanent home and other facilities such as analytical laboratories.

 
6)    Counterfeit medicines and Conflict of Interest 

a)    Chairman allegedly carrying out inspection of drug facilities: The Chairman has never travelled on GMP inspection.  All his foreign travel in the capacity of Chairman has been on request of the OPM, MOH or other government agencies.  No decision on the certification of any factory has been made as a result of the Chairman's trips.


b)    Favouritism: - the trips in question undertaken by HHRA all related to institutional capacity building using HR to manage substandard and falsified medicines.  The Abuja meeting was a follow-on to the Geneva meeting and for the latter the HHRA was invited to provide a linkage between the two meetings. In addition, costs for the trip were met by the conveners of the meetings.



c)    Conflict of interest: The petitioner as a lawyer ought to make himself conversant with the National Drug Policy and Authority (NDP/A) Act on the appointment of the board. The representation of National Medical Stores on the board is statutory as contained in Section 3(2)i of the Act.


d)    Composition of the NDA Board: The composition of the Authority board is defined by law. Section 3 (3) gives the Minister of Health exclusive statutory rights to appoint the Board Chairman. The representation of the Director Mulago Hospital, Director Criminal Investigation Department and a representative of Joint Medical Stores on the board are explicitly provided for by the same Act. 


e)    Lack of National Formulary: There has not been a national formulary since the law was enacted.  The production is now in the final stages. 


f)    Illegal guidelines prohibiting dual licensing and distance restrictions:  Every year NDA publishes licensing guidelines following stakeholder consultations. Control of siting of pharmacies is done world over to ensure that business interests do not override public health interests. In Uganda, distance proved to be the easiest measure to use because of the absence of readily available data on population, availability of alternative services as well as some policy gaps on proximity of pharmacies to public health facilities.  Licensing of both wholesale and retail pharmacy practice on the same premises while not prohibited by law is not a best-practice and there is general agreement that this practice has to cease.  Currently existing dual licenses have been allowed to continue to operate.


g)    Mischievous Procurement process for the Construction of Phase 2: Phase 1 has been halted by court and it appears that the contract with Seyani cannot stand because of the ruling of the PPDA tribunal.


The Authority funds have now been committed for construction of phase 2 which is urgently needed to have laboratories to deal with the challenges of substandard and falsified medicines.


Regarding the outsourcing of Procurement of Phase 2 to Uganda Revenue Authority (URA), Section 9 (b) of the PPDA Act allows one procurement & disposing entity (PDE) to another PDE.


Precisely, it says:  An accounting officer may:


(b) Contract out certain procurement and disposal functions of the contracts committee, procurement and disposal unit or user department to:

(i) any other procuring and disposing entity; or

(ii) a third party procurement or disposal provider;


in accordance with the terms and conditions specified in regulations made under this Act.



CONCLUSION

The Uganda National Drug Authority is committed to our core vision of providing Uganda with safe, effective, quality medicines and health care products. Our mission to promote and protect public health through the effective regulation of human, animal medicines and health care products still remains our guiding factor.


While we are open to being investigated and have cooperated with parliament thus far, once again, we wish to reiterate that the said allegations are totally false, malicious, vengeful and deliberately calculated by a member of staff, currently on interdiction to derail the proper functioning of the Authority.


Some of the prayers being sought by the petitioner e.g. that parliament halts all ongoing NDA recruitments until investigations by the committee are complete; while built on falsehoods and or wilful ignorance, if granted will greatly inhibit the vital role of NDA to Ugandans.


Thank You.

SECRETARY TO THE AUTHORITY