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Nigerian drug makers have raised their investments in the country to N500 billion, as against N300 billion it was nearly a decade ago. The industry is also responding positively to government’s 2016 Fiscal Policy and the Executive Orders, say stakeholders.
“We have investments of around N500 billion and direct employment of 500,000. If you extend the chain, it could be nearly one million,” Okey Akpa, chairman of the Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN), told BusinessDay at a PMG-MAN Forum in Abuja.
“The Common External Tariff(CET) threatened to wipe us out until the 2016 Fiscal Policy came on board and changed the dynamics of the industry. Since the 2016 Fiscal Policy started, we have started receiving active enquiries from foreign direct investors who want to invest in the industry,” Akpa said.
Nigeria’s pharmaceutical industry was recently hard hit by the CET, a regional trade agreement among 15 member countries of ECOWAS.
The CET provides for five to 20 percent tariff for importation of pharmaceutical raw materials and excipients but allows finished medicines to enter into any country in the sub-region at no duty.
This posed a threat to Nigerian drug makers, as it placed them at a competitive disadvantage during contract bids, say industry players.
To save the local industry, the Federal Government imposed an Import Adjustment Tax (IAT) of 20 percent on some finished imported medicines in HS Code 3004, which are drugs that can be produced by local manufacturers. The government banned the importation of liquid dietary supplements and medicament such as paracetamol tablets and syrup, chloroquine tablets and syrup, among others, but allows products like Insulin (HS Code 3004.3100.00) to come in at zero import duty, as the country currently has little or no capacity to produce it locally.
“The policies are good but they also need to be consistent. Part of the problems we have in the country is the influx of fake drugs,” said Fidelis Ayebae, MD/CEO, Fidson Healthcare Plc, who added that N20 billion had been spent by pharmaceuticals in the last five years in factory, quality and facility upgrades.
“The National Health Insurance Scheme (NHIS) needs to collaborate with the National Assembly in developing laws that will ensure that every state has subsidised health insurance. This is the only way we can put drugs in the hands of the common man and discourage importation of fake drugs,” said Ayebae.
The Federal Government recently came up with Executive Orders which directed that made-in-Nigeria products be given preference in the procurement of relevant items, mandating that at least 40 percent of the procurement spending of all ministries, departments and agencies (MDAs) be expended on locally manufactured goods or services. Locally made medicines were specified in Section 4F as a key category covered by the Executive Order.
In Africa, only nine drug makers have the World Health Organisation (WHO) certification and four of these companies– Swiss Pharma, May & Baker, Evans Medicals and Chi Pharmaceuticals—are in Nigeria. The certification enables brands to compete for drug supply at international bids.
“It’s not just getting the WHO prequalification,” said Steve Orya, CEO of Chi Pharmaceuticals.
“This is because even with the certification, you still need to compete with global brands. We compete with Indians where we get raw materials. Here we generate our own gas and it’s expensive. That’s why we need patronage as an incentive,” Orya said.
Muntaqa Umar-Sadiq, MD/CEO, Private Sector Health Alliance of Nigeria (PHN), stressed the need to create an enabling environment for local manufacturers through effective supply chain management.
Umar-Sadiq stressed the need for collaboration among manufacturers and other players in the value chain to reduce health hazards and achieve efficiency in medicines supply.
ODINAKA ANUDU
