The Pharmaceutical Manufacturers Group of Manufacturers Association of Nigeria, PMG-MAN, Association of Community Pharmacists in Nigeria, ACPN, and Association of Medical Laboratory Scientists, AMLSN, have expressed displeasure over delayed implementation of the Executive Order signed recently by President Bola Tinubu on pharmaceutiacls and medicals.
Reacting separately to the development yesterday, the groups, who are major stakeholders in the pharmaceutical sector, said a clear time frame and commitment from the federal government were crucial for the implementation of the executive order.
They also contended that unless the value of the naira was fixed, achieving the country’s target of 70% in local drug manufacturing would remain a mirage.
Recall that President Tinubu a few ago, signed the Executive Order to pave way for removal of duties and taxes on imported drugs as well as local production of drugs and other pharmaceutical products.
Addressing journalists yesterday in Lagos on the forthcoming 7th Edition of Nigeria Pharma Manufacturers Expo, NPME, billed for September, PMG-MAN said it was not enough to make an executive order without a timeline, noting that “delays could lead to drug shortages.”
It maintained that the most critical factor for the success of the domestic pharmaceutical industry was a stable exchange rate.
Chairman of the local organising committee for the expo, Patrick Ajah, argued that the government would need to do certain things to achieve 70 per cent local drug production, adding that the recent fluctuations in the value of the naira had made it difficult for companies to plan and invest.
According to him, there is need for government to follow up and make sure that it’s done.
He said: “Nobody has engaged us on the process. Let me be honest, if the government does not ensure implementation of this, it can turn around to be negative. Many companies are waiting for the implementation.
”So what is going to happen soon is, if the implementation doesn’t start, many of us who are waiting so that we’ll benefit from this will not import things.
”I hope the government gets to understand this because I’m telling you already, things that we’re supposed to immediately start importing, I say wait, so that we understand when this executive order will come into place and be sure that we’ll benefit from it.
”If we keep delaying the things that companies should have placed order for, there will be scarcity. And if the implementation doesn’t start immediately, we’ll have a situation where you do not know where we’re going.
“This is one major reason multinational companies are leaving. It’s not the fear of subsidy removal. If we didn’t tamper with the currency, all the multinational companies would be here and they would still be making more investment.
”But if somebody had brought his money, when they were bringing the money, and I’m telling you because I was involved in it, all the money brought from outside by multinational companies will have to go through the banking system.
“When it gets through the banking system, it will be at official rate. So you brought in money to come and build a facility at the exchange rate of N316, and now you’re going to be remitting the money at N1,500 and something and you can’t even find the dollar.
”Many companies will not be able to cope. So fixing our exchange rate is going to be the one single thing that will immediately reset where we are.”
Ajah, who is the managing director of May&Baker, also highlighted the negative impact of foreign exchange scarcity on the industry, stating that many companies were waiting to see if the recently announced executive order would be implemented before placing import orders.
He advocated increased government support for the local pharmaceutical industry, stressing that with the right backing, Nigeria could produce 70 per cent of the medicines it consumed.
He maintained that a clear timeline and commitment from the government were crucial, even as he pointed to India as an example of a country that had successfully supported its domestic pharmaceutical industry.
“The Indian government has provided financial and technical assistance to local manufacturers, and has even intervened to secure technology from other countries,” Ajah said.
He added that the most effective way to combat counterfeiting was to boost local production and reduce reliance on imports.
On local capacity, Ajah acknowledged that some progress had been made, but noted that many companies lacked the financial resources to invest in new facilities or upgrade existing ones.
According to him, the recent devaluation of the naira has further exacerbated the problem.
He also called for a reduction in interest rates, stating that current rates, which are as high as 30 per cent, were a major barrier to investment in the industry.
Executive Order alone not enough to bring down prices of medicine significantly – ACPN
On his part, the National Chairman, Association of Community Pharmacists in Nigeria, ACPN, Adewale Oladigbolu, said Executive Order alone was not enough to bring down the prices of medicine significantly.
Oladigbolu, who noted that the implementation was just a starting point towards improving access to quality and affordable medicals in Nigeria, said there should be follow-up as there were processes to be followed.
“If you remember when the minister of social welfare released that order, there are things to be done by the Attorney General of the Federation and those things take a little while. I will just urge Nigerians to be patient with the federal government.
“I know implementation will commence very soon, I also know that this beginning of processes that are necessary to drive accessibility to medicine that are of good quality and are affordable.”
He argued that even when the implementation commences, it would still take time for more companies to be open for expansion.
“For us to begin to see the impacts of this programme, government should not rely on the Executive Order alone, it should work hard in other sectors to bring down the price of medicine.
”It is not good that in our country we have an open drug market. That is a system that encourages hoarding and price hikes,” Oladigbolu added.
He called on the federal government to, as a matter of urgency, close down all the open drug markets in Nigeria.
“We import over 70 per cent of our medicine in Nigeria. For the 30 per cent that we produce in Nigeria, 90 per cent of the raw materials are imported. If the forex is high, prices won’t come down.
”If forex is galloping, it is even worse. With galloping forex, companies speculate prices. Prices will be unstable, which is to the detriment of the final consumers. But if forex stabilises, speculation is reduced and the hike in prices minimises, but with forex depreciation, we should expect that prices will also go up”.
He said government could prioritise those who import medicines and give them special concessions of forex, rather than subject them to market-driven forex.
“Government can give grants to pharmaceutical companies to begin to produce in Nigeria. That is very important. In India, for example, manufacturers enjoy incentives to even export.
”If manufacturers want to export, they have access to single digit loan, then they are able to produce in Nigeria and be able to ensure that prices are stable and affordable,” the ACPn chairman said.
FG should consider timeliness for optimisation – Dr Casmier
Also speaking with Vanguard yesterday, the National President of Association of Medical Laboratory Scientists, AMLSN, Dr Ifeanyi Casmier, who described the Executive Order as a commendable initiative, said there were still areas of concern, particularly issues around timelines for optimisation.
According to him, there is need for an interim policy to tackle the high cost of drugs and other medical supplies.
“We expect that in no time from now, FEC, particularly the Coordinating Minister for Health, will work with the President to clarify when the order will kick in and other modalities and supportive framework for full implementation.
”The benefits are enormous. We do know that it is not a short-term approach because production is not like buying off the shelf. Production requires time. It requires production facilities and time for them to be validated and eventually become optimised to go into full-scale production.
“The worry is that these processes are going to be time-bound and will take sometime to come to fruition. It is expected that the prices of drugs, prices of laboratory diagnostics will remain high.”
He urged the government to propose another policy in the interim, considering the unstable exchange rate, and the fact that these items were heavily taxed at the ports.
“It may be necessary that before the full operationalisation of the order, there might be need for some exemptions.”
For diagnostics use in medical laboratories, Ifeanyi called for some exemptions on taxations and value added tax, VATm on hospital consumables.
“It is imperative that the gesture is extended to food import because of the current challenges about food sufficiency and stability. Based on the order, I also think the commercial banks should come up with novel financial instruments that can be readily accessed by people who are interested in venturing into this.
“Globally, research and development are important parts of production but research and development are not funded with loans, they are supported with grants and sponsorships of all kinds. All those are part of what should be taken into account if we are going to reap the full benefits of the order,” he stated.
In his reaction, former President of the Pharmaceutical Society of Nigeria, PSN, Olumide Akintayo, however, said Nigerians should be patient as it takes time to get things sorted out.
Akintayo, who said President Tinubu has done what he needed to do, stated that 65 per cent of locally produced drugs were malaria-based.
“Can we in good conscience say Nigeria has the capacity that our pharmaceutical plants can produce the equivalent of 130 million doses of anti-malarials every day? The answer is no. Whether we like it or not, we still have to make up with imports at least for some time.
”It takes time to build these manufacturing plants because we still rely on these imports, there are internal tariffs to deal with and nobody is talking about those things.
“For me, that is even the more serious one. We can’t produce all of the things; we still need importation.
“In fairness to President Tinubu, I think he has done what he needs to do. This should be within the competence of the ministry of health,” he said.
