… as CET poses threat to pharmaceutical industry
Over one million persons currently working directly or indirectly for manufacturers and importers in Nigeria’s pharmaceutical industry and its investments worth over N300 billion are at risk, if the Federal Ministry of Health insists on full implementation of newly introduced National Drug Distribution Guideline (NDDG).
Currently, over N100 billion (represented as receivables) of the industry’s working capital is tied down at the wholesale level of the value chain. “This amount would be lost as wholesalers will claim force majeure if not accommodated in the drug distribution arrangement,” Okey Akpa, chairman, Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG MAN).
The consequence of implementation of the NDDG at this time is a significant reduction in access to essential medicines; hike in the price of essentials medicines; elimination of the current wholesalers; unemployment loss of receivables; loss of business, and inefficiencies and loss of investment in the pharmaceutical value chain.
Another potent threat to the industry that is gasping for breath is the Common External Tariff (CET) that was adopted at the Heads of States summit in October 2013, in Dakar, Senegal. The CET policy places zero on finished imported medicine, while essential raw and packaging materials required by the industry for local medicine production attracts 5 percent to 20 percent.
The PMG MAN recommends that an import adjustment tax of 20 percent on imported finished pharmaceutical products of HS Codes 3003 and 3004 should be imposed immediately as applied to other sectors where Nigeria has capacity, as allowed by the CET.
The group also recommends that under the National List within the CET, input into pharmaceutical manufacturing (raw materials, excipients and packaging) should be allowed to be imported at 0 percent by bonafide pharmaceutical manufacturers.
“This policy, if implemented, reserves the gains made towards the nation’s self-sufficiency in essential medicine and opens all doors for total importation of finished medicines. It is regrettable that the damaging consequences of the policy on the local pharmaceutical manufacturing sector were not considered, despite our desperate attempts to draw attention to this,” Akpa said at a world press conference in Lagos.
Despite having over 150 pharmaceutical factories in Nigeria, only four have complied with the World Health Organisation (WHO) current Good Manufacturing Practice (cGMP), an indication that the industry continues to struggle.
