The RUPHA Judgment Does Not Mean That Every Private Health Facility Must Now Pay a Single Business Permit
The recent High Court judgment in Rural Private Hospitals Association of Kenya (RUPHA) v the 47 County Governments has understandably caused concern among private health facilities.
It is important, however, that members understand precisely what the Court decided—and, equally importantly, what it did not decide.
1. The RUPHA petition was not dismissed after a fresh determination that hospitals must pay Single Business Permit fees. RUPHA had challenged the constitutionality of Single Business Permit (SBP) fees imposed by County Governments upon private medical facilities.
The Court ultimately dismissed the petition on two threshold grounds:
that RUPHA, being a society registered under the Societies Act, lacked juridical capacity to institute the proceedings in its own name; and
that the Court considered the dispute to be res judicata, because substantially similar questions had previously been litigated in Kenya Pharmaceutical Association & another v Nairobi City County and 46 other County Governments & another.
The Court expressly concluded:
“the Petition herein is res judicata Nairobi Constitutional Petition No. 97 of 2016 … and accordingly, cannot be heard and determined on merit again before this Court.”
It then dismissed the petition for want of locus standi and lack of jurisdiction on account of res judicata.
This distinction is fundamental.
The judgment should therefore not be interpreted as a new declaration that all private hospitals, clinics and medical centres are now legally required to purchase Single Business Permits.
The Court declined to determine the RUPHA challenge afresh on its merits.
2. The critical issue is the distinction between a profession and a commercial trade
The Constitution itself makes this distinction.
Under Part II, paragraph 7(b) of the Fourth Schedule, County Governments have responsibility for:
“trade licences (excluding regulation of professions).”
Medical practice is a regulated profession.
Medical practitioners are licensed by the Kenya Medical Practitioners and Dentists Council (KMPDC), while health facilities themselves are separately registered, inspected and licensed under the national statutory framework. A hospital is therefore not an unregulated commercial premises awaiting permission from a County Government before it can provide healthcare. It already operates under an extensive national regulatory framework.
The KMPDC framework extends beyond the individual doctor to the physical health facility itself, including clinics, diagnostic centres, nursing homes and hospitals. The facility is inspected and licensed as the place through which regulated professional healthcare is delivered.
3. What, then, about medicines dispensed by a hospital?
This is where the 2017 Kenya Pharmaceutical Association judgment must be understood carefully.
That case concerned pharmacists and pharmaceutical premises.
The Court held that although pharmacy is a profession, pharmacists may simultaneously engage in commercial trade when selling pharmaceutical products. Consequently, an SBP imposed upon premises engaged in that commercial trade was not necessarily regulation of the pharmacy profession.
The present RUPHA Court relied heavily upon that reasoning.
But that does not mean that the presence of medicines inside a hospital automatically converts the hospital into a pharmaceutical retail business.
There is an important distinction between:
A. Medicines supplied or dispensed as an integral part of clinical treatment; and
B. The operation of a separate commercial retail pharmacy selling pharmaceutical products to the general public as an independent trade.
The two should not be conflated.
4. Dispensing prescribed medicines is part of healthcare delivery
A patient does not ordinarily enter a hospital primarily to purchase commodities. The patient comes for diagnosis and treatment. The doctor examines the patient, makes a diagnosis and prescribes appropriate treatment. Medicines may then be dispensed by the hospital pharmacy as one component of that treatment.
The medicine is therefore part of a continuum:
Consultation → Diagnosis → Prescription → Dispensing → Treatment → Follow-up.
The fact that medicines have a monetary value does not, by itself, transform the entire clinical encounter into ordinary commercial trade.
Hospitals similarly charge for laboratory investigations, radiological examinations, theatre consumables, implants, dressings and other medical products used in treatment. The mere use or supply of these products in healthcare does not convert the hospital into an ordinary merchant establishment.
The proper question should therefore be:
Is the facility carrying on an independent commercial trade, or is it supplying medicines and other medical products as an integral part of the professional healthcare for which the facility is licensed?
That distinction is crucial.
5. Hospital pharmacies are themselves already specifically regulated
There is an additional problem with treating every hospital pharmacy as an ordinary county-regulated retail shop. The pharmaceutical component of healthcare is itself regulated by the Pharmacy and Poisons Board (PPB). The pharmacy premises are subject to the applicable PPB regulatory requirements, while the pharmaceutical professionals working within them are also individually regulated and licensed.
The hospital itself is additionally registered and licensed by KMPDC.
There are therefore already multiple layers of specialised national health regulation governing:
the health facility;
the medical practitioners;
the pharmacy premises;
the pharmacists/pharmaceutical personnel; and
the handling, storage and dispensing of medicines.
A County Government cannot reasonably convert this highly regulated clinical activity into an ordinary “trade” merely because medicines pass from the hospital pharmacy to a patient.
6. RUPHA members should distinguish treatment from independent retail trade
The practical position should therefore be clear.
A KMPDC-licensed health facility whose pharmacy dispenses medicines as part of the treatment of its patients has a strong basis for maintaining that it is carrying on the regulated business of healthcare—not an independent pharmaceutical retail trade merely because medicines are dispensed within the facility.
Conversely, where a hospital establishes and operates a genuinely independent commercial retail outlet selling pharmaceutical products to the general public outside the clinical treatment relationship, the County Government has a considerably stronger argument that this distinct activity constitutes trade.
The distinction is therefore not simply whether medicines are present or whether patients pay for medicines.
The distinction is the nature and purpose of the activity.
7. The August 2026 judgment did not erase the constitutional boundary
The RUPHA judgment itself records that the constitutional allocation of county trade functions includes the express words “excluding regulation of professions.”
It also records the argument arising from Kenya Pharmaceutical Association that pharmacists act both as professionals and commercial proprietors when selling pharmaceutical products.
That qualification matters.
It does not logically follow that every health facility dispensing medicines pursuant to treatment is thereby engaged in an independent retail pharmaceutical trade.
Furthermore, the judgment did not proceed to determine afresh whether the ordinary operations of a KMPDC-licensed hospital constitute “trade” for purposes of an SBP. The Court held that it could not hear and determine the merits again because of res judicata.
8. Other jurisprudence supporting regulated medical practice remains important
The broader jurisprudential history cannot simply be wished away.
There have been several decisions concerning medical practitioners and health facilities in which courts have recognised the constitutional distinction between regulated professional practice and county trade licensing.
These include decisions involving medical practitioners in Nakuru, Garissa, Nyandarua, Kisii and Nairobi.
Most importantly, in Kenya Medical Association v Nairobi City County Government & Others, Petition E050 of 2022, the High Court dealt directly with a Nairobi law imposing an annual trade licence upon health clinics, doctors’ surgeries and dental offices.
The impugned provision was declared unconstitutional, and enforcement of the trade licence against doctors was prohibited.
The constitutional foundation of that decision was precisely the wording of paragraph 7(b), Part II of the Fourth Schedule: counties regulate trade, excluding regulation of professions.
9. What RUPHA members should do when approached by County enforcement officers
Members should therefore not interpret the latest judgment as an instruction to automatically purchase a Single Business Permit.
A KMPDC-licensed facility that is providing healthcare and dispensing medicines within the ordinary continuum of clinical treatment should first require the County Government to identify, in writing:
– the precise provision of the applicable County Finance Act or Trade Licensing Act under which payment is demanded;
– the particular commercial trade that the County alleges the facility is conducting;
whether the demand relates to the health facility itself or to a separately identifiable commercial enterprise within the premises;
– the legal basis upon which the County considers dispensing medicines prescribed in the course of treatment to constitute a separate commercial trade; and
how the demand is reconciled with the constitutional exclusion of the regulation of professions from county trade licensing.
Members should retain copies of their current:
– KMPDC facility licence;
– Professional licences;
– PPB licences applicable to the hospital pharmacy;
– licences of the relevant pharmaceutical professionals; and
any written notices or demands received from County Governments.
Members should avoid physical confrontation with enforcement officers. Any demand, threatened closure, arrest, seizure of equipment or interference with patient care should immediately be documented and referred to RUPHA and its legal advisers for appropriate action.
10. The message to RUPHA members
The August 2026 judgment is not a judicial declaration that every private health facility in Kenya must pay a Single Business Permit.
The petition was dismissed because of RUPHA’s legal capacity to bring the proceedings in its own name and because the Court considered the dispute res judicata. The Court expressly stated that the petition could not be heard and determined on its merits again.
The 2017 pharmaceutical case upon which the Court relied concerned the distinction between professional pharmacy practice and commercial sale of pharmaceutical products.
That distinction should now be central to the position of private health facilities.
A hospital providing diagnosis, treatment and dispensing medicines prescribed as part of that treatment is fundamentally different from an independent retail pharmacy conducting pharmaceutical trade with the general public.
RUPHA members should therefore remain confident in asserting the professional character of their healthcare facilities where they operate strictly within their licensed clinical mandate.
Healthcare is a regulated professional service. Dispensing medicines as part of treatment does not, without more, convert a hospital into an ordinary retail shop.
Where a separate commercial retail business exists within a health facility, that distinct business may raise a different licensing question. But County Governments should not use the existence of a hospital pharmacy as a blanket justification for imposing an SBP upon the entire KMPDC-licensed health facility.
The way forward is not indiscriminate enforcement. It is a clear national framework distinguishing regulated healthcare delivery from independent commercial trade.
Dr Simon Kigondu had protested the imposition of Single Business Permit fees on professionals for quite some time