Janet Ogundepo
The National Association of Community Pharmacists of Nigeria has lauded President Bola Tinubu’s executive order to introduce zero tariffs, excise duties, and value-added tax on imported pharmaceutical products and inputs.
Chairman of the body, Adewale Oladigbolu, in an exclusive interview with PUNCH Healthwise, described the order as a welcome development and a step taken in the right direction.
He, however, argued that the two-year limit was unsustainable to achieve a stable reduction in drug prices.
The ACPN president noted that by the time the order was implemented and considering the months spent on shipping, the order would have expired, resulting in a return to the status quo.
He further called on the Federal Government to offer grants to pharmaceutical industries and close down the open drug market to ensure growth in the sector.
On Friday, the Coordinating Minister of Health and Social Welfare, Muhammad Ali, stated that Tinubu signed an executive order to increase local production of healthcare products such as pharmaceuticals, diagnostics, and devices such as needles and syringes, biological and medical textiles, among others.
The order, which will be implemented by agencies such as the Nigeria Customs Service, National Agency for Food and Drug Administration and Control, Standard Organisation of Nigeria, and the Federal Inland Revenue Service, would grant special waivers and exemptions for the products for two years.
Pate on his X account, formerly Twitter, noted, “In a transformative move to revitalize the Nigerian health sector, His Excellency President Bola Ahmed Tinubu, GCFR @officialABAT, has signed an Executive Order aiming to increase local production of healthcare products (pharmaceuticals, diagnostics, devices such as needles and syringes, biologicals, medical textile, etc.).
“The Minister of Justice and Attorney General of the Federation @FedMinOfJustice, Prince Lateef Olasunkanmi Fagbemi SAN, @LOFagbemi, is to now take the next steps towards codifying the new Order.”
He further stated that the order accommodated specified items including, Active Pharmaceutical Ingredients, excipients, and other essential raw materials required for manufacturing crucial health products like drugs, syringes, and needles, Long-lasting Insecticidal Nets and Rapid Diagnostic Kits.
The minister also said that the order provides establishing framework contracts and volume guarantees to encourage local manufacturers.
Pate also noted that it mandates the ministers of Health, Finance, Industry, Trade and Investment to develop a harmonised implementation framework that will expedite regulatory approvals.
Last year, the prices of drugs witnessed a spike following the exit of the British Pharmaceutical giant, GlaxoSmithKline, in August.
PUNCH Healthwise had reported how the exit, coupled with the removal of fuel subsidy and the depreciation of the naira led to over 300 per cent rise in the prices of drugs.
Reacting to the executive order, Oladigbolu, in an interview with PUNCH Healthwise, said the order reflects the FG’s attention to the pharmaceutical industry.
He, however, noted that the time frame of the order would not yield the desired results needed in the industry.
The ACPN National Chair said, “Remember, the order is not yet effective. It has to pass through some processes. So, if it becomes effective today, I think it’s about six months before imported machinery will arrive, while it takes about three months of shipping for the raw materials or the API to come. So, before it begins to take shape the market prices of medicines, we will be looking at a year down the line.
“So, when we look at a year down the line and if after two years, they don’t sustain the order, and then we’ll have a problem. We’ll be back to square one.
“We will not have had an increase in the number of manufacturers in Nigeria and we will not have had sufficient decrease in prices of drugs within the two years space. So, I see that the length of the order needs to be improved upon and more things have to be done for the pharmaceutical industry in Nigeria.”
Citing an example of the pharmaceutical industry in India, Oladigbolu called on the FG to provide grants to ensure more growth in the industry.
“We need to copy, for example, what India is doing. India is giving grants to pharmaceutical manufacturers to produce medicines, especially for exports. This kind of incentivising the pharmaceutical sector in India has been on for about 20 years. So, we are starting at the right point, but more things need to be done.
“For the pharmaceutical industry to grow in Nigeria, the FG needs to put down grants, not loans, to support the pharmaceutical sector. If they do that, you’ll see tremendous growth in the pharmaceutical sector. We’ll become a net exporter of pharmaceuticals.
“Now, they are saying zero tariff, which is very interesting but where will the money come from? It is either you aggregate capital on your own or you borrow from banks. Borrowing from banks is at nearly 30 per cent. The cost of the infrastructure will be added to that interest rate and other requirements have to be there. These will further make drugs expensive.
“So, the government can control tariffs and capital and give grants to the pharmaceutical sector based on certain criteria. They can also structure purchases and this was noted in the release, which is good,” the pharmacist said.
He further called for the strengthening of the insurance system by ensuring 70 per cent of Nigerians are insured, noting that this would ensure the availability of resources to protect them from escalating prices.
The pharmacist further said if the executive order was sustained beyond the current time frame, it would eventually lead to a reduction in drug prices.
The ACPN president also emphasised the need for the government to close down the open drug market, noting that they disturb the balances in the pharmaceutical supply chain and discourage private investors from bringing capital into the industry.
He said, “But I’m reiterating that this does not solve the problems of the pharmaceutical industry. One of the greatest problems we have is those open drug markets. It encourages the circulation of fake medicines, so foreign direct capital can’t come because they can’t understand this industry, and we can’t control the distribution of medicines in Nigeria.
“Our country is properly positioned to serve other countries in West Africa, the African region itself, and even to export to America. It is not beyond what we can do if the government can put more priority on the pharmaceutical sector.
“The National Agency for Food and Drug Administration and Control is doing its best so that we can have a good outlook for other countries. They have achieved maturity level 3, which is a good thing for the country; meaning that pharmaceutical production in the country is well-regulated and well-controlled.
“So, people from outside the country will not have fear about our sector. But that fear is sustained just because we have an open drug market. If we don’t have an open drug market, they have no fear about our sector, and they can be a net exporter of pharmaceutical products.”
Oladigbolu also said that the executive order would have no impact on foreign pharmaceuticals exiting the country, noting that they have no production facility in Nigeria.
“We should aim at sanitising our system, bringing capital, improving the quality of what we do, and then, let Nigeria be a net exporter. If our infrastructure is improved and with the zero tariffs on the machinery, the foreign multinational companies will observe us for some time to ensure that we are on the right direction and then come and set up proper manufacturing facilities, and not just set up a marketing outfit.
“With this executive order, they can come back and set up in the country again,” the pharmacist stated.