Pharmacists in the manufacturing sector of the Nigerian economy have expressed concerns over the potential aftermath of the removal of petroleum subsidy on local production of pharmaceutical products. They predict that the move will have negative impacts on both manufacturers and consumers, as cost of production will skyrocket, while consumers grapple with limited resources to purchase products.
They have also called for the removal of unnecessary tariffs and duties on pharmaceutical raw materials and equipment for local manufacturers, arguing that except this is done, attaining national medicines security will continue to be a mirage.
The industry players further urge the federal government to create a special window for the pharma industry, whereby local manufacturers can receive foreign exchange at special government rates. They noted that access to forex is especially critical for the purchase of raw materials for local manufacturing, saying inadequate access will inevitably lead to drug scarcity.
Recall that at the inaugural speech of the newly elected President Bola Ahmed Tinubu on 29 May, he announced the immediate discontinuation of the controversial fuel subsidy regime, noting that the humungous funds that regularly gone into it would subsequently be used to accelerate development of public services and infrastructure.
According to Mr President, “Subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall, instead, re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.”
Speaking in an exclusive interview with Pharmanews, National Chairman of the Association of Industrial Pharmacists of Nigeria (NAIP), Pharm. Ken Onuegbu, emphasised the need for the new administration of Tinubu to formulate and implement policies that will ensure that all government institutions patronise made-in-Nigeria pharma products.
Reacting to the hike in the pump price of Premium Motor Spirit, known as petrol from N184 to over N500 per litre, Onuegbu, who is also co-founder/CEO of Tricare Pharmaceuticals, an indigenous pharma manufacturing company, called on the government to urgently seek means of cushioning the harsh effects of subsidy removal on manufacturers and workers. He observed that the rising cost of raw materials and transportation will make the prices of drugs unaffordable to the masses, which will in turn bring about low purchases.
“Although local manufacturers don’t have immediate impacts of the fuel subsidy removal on the availability of raw materials, the rising cost of transportation and other services will definitely increase the cost of production and worsen the already high cost of essential drugs.
“The sharp rise in the cost of production will lead to increase in the prices of goods. And with low purchasing power from the consumers, this may lead to losses on the part of manufacturers.”
As part of palliative measures that the government can adopt for drug manufacturers in view of the fallout of the subsidy removal, Onuegbu recommended the removal of burdensome tariffs and creation of an economic zone to attract the incentives that will boost local production, among others.
According to him, “The government should consider removal of unnecessary tariffs and duties on pharma machines and raw materials; creation of a special window for pharma industry, whereby we can receive forex at government rates; coming out with a government policy for all government health institutions to patronise made-in-Nigeria pharma products; and the creation of an economic zone to attract good incentives to boost local production.
“Also, President Tinubu must make it a priority to create an enabling economic environment for local production to thrive, while ensuring that the currency is stabilised through sound micro and macro -economic policies.
“I still want to emphasise the importance of forex availability, which will enhance the importation of essential raw materials for local manufacturers, as well as improvement of public infrastructures – roads, power, and security in the country.”
On whether the newly commissioned Dangote refinery, described as the largest in West Africa, can help Nigeria achieve medicine security, the NAIP chairman responded in the negative, saying there had been other refineries in the country before the Dangote refinery, yet, Nigeria keeps struggling with medicines availability.
“I doubt if the operation of Dangote refinery can bring about medicines security. With the presence of Kaduna, Warri, PH, refineries, have we achieved medicine security? Achieving medicine security goes beyond an individual establishing a refinery.
“We need very strong government involvement and support. We need the commitment of all the major stakeholders. And we need the guaranteed commitment of Dangote refinery in the quest to achieve medicine security,” he stated.
Also reacting to the subsidy removal announcement, the Group Managing Director and CEO, Drugfield Pharmaceuticals Ltd, Pharm. Olakunle Ekundayo, said the move will inflate the cost of living, as well as cost of production, adding that this will inevitably affect prices of commodities, including medicines.
Ekundayo disclosed that cushioning the impacts of the subsidy removal for local manufacturers will involve availability of foreign exchange at very reasonable rates. He added that such a gesture will ensure that locally produced drugs can favourably compete with imported ones.
“For the new government of President Bola Ahmed Tinubu, what local pharma manufacturers like us are requesting is access to forex, at moderate rates, to enhance easy purchase of raw materials at the international market. Although we have been struggling with this prior to this time, but with the subsidy removal, it will become worse, which may create drugs scarcity, if government doesn’t rise to the occasion immediately,” he stated.
Concerning the commissioning of Dangote refinery and attainment of national medicine security, the Drugfield CEO averred that the country still has a long way to go to actualise the goal, saying medicine security cannot be achieved without a vibrant local pharma manufacturing policy and system.
