The executive order on pharmaceuticals

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On 28 June, President Bola Tinubu signed the executive order to introduce zero tariffs, excise duties, and value-added tax (VAT) on imported pharmaceutical inputs. Items covered under the order include active pharmaceutical ingredients (APIs), excipients, and other crucial materials for producing drugs, syringes, long-lasting insecticidal nets (LLINs), and rapid diagnostic kits.

The order, which will be implemented by agencies such as the Nigeria Customs Service (NCS), National Agency for Food and Drug Administration and Control (NAFDAC), Standard Organisation of Nigeria (SON) and the Federal Inland Revenue Service (FIRS), will grant special waivers and exemptions for the products for two years.

Announcing the directive, the Coordinating Minister of Health and Social Welfare, Prof. Mohammed Ali Pate, said it is part of the Nigeria Health Sector Renewal Investment Initiative II (NHSRII), which is aimed at improving health outcomes for all Nigerians while tackling the myriad of challenges that have bedeviled the country’s health sector.

We commend this bold and revolutionary move, which marks a significant leap in the fulfilment of the protracted yearnings of stakeholders in the Nigerian health sector and especially the pharmaceutical subsector. As the Director General of the National Agency for Food and Drug Administration and Control (NAFDAC), Prof. Mojisola Adeyeye, rightly said, “The perennial and persistent costly challenge of importation of all materials needed for manufacturing (except water) by local manufacturers became an open sore. As director general, my professional heart ached for local manufacturers considering the import duties they have to pay for all materials, some packaging materials and equipment.”

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With effective implementation and monitoring, not only will this new directive tremendously boost local pharmaceutical manufacturing and ensure a more self-sufficient pharmaceutical industry but it will also make essential medications more available and affordable for Nigerians. This will ultimately enhance public health, while also creating job opportunities, stimulating economic growth within the health sector and advancing the national economy.

It is no wonder that the decision has continued to receive widespread applause from stakeholders. President of the Pharmaceutical Society of Nigeria (PSN), Prof. Cyril Usifoh, hailed the move as a bold step, noting that it signals government’s commitment towards transforming the health sector. Similarly, the Nigeria Employers Consultative Association (NECA) described the order as a massive opportunity for the Nigerian pharmaceutical sector to experience a rebound from the depths of neglect.

In a statement, the Director General of the body said, “The executive order came at time that local pharmaceutical companies are facing an almost existential challenge. The sector has been beset with acute shortage of productive raw-materials, high cost of production   and low output in recent years due to high cost of import of productive machines and other inputs materials. The quick and timely implementation of the order would provide a leeway out of the current cost challenges and allow the sector to rebound.”

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We must emphasise, however, that for the new executive order to achieve its intended impact, robust implementation and oversight are crucial. The concerned agencies – Customs, NAFDAC, SON and FIRS- must be bolstered and equipped to ensure compliance and prevent the exploitation of this policy. Specifically, clear-cut mechanisms must be put in place to simplify and expedite the clearance process for pharmaceutical inputs, to curtail the usual delays at the ports.

There must also be transparency in the application of zero tariffs and duties to prevent corruption and misuse. Continuous dialogue with the Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN) and other pharmaceutical stakeholders will also be essential to address challenges and optimise the policy’s benefits.

We also urge the government to consider extending the duration of the order beyond two years to ensure a wider and deeper impact. The challenges facing the Nigerian pharmaceutical industry are too many and too fundamental to be dismantled within two years.

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National Chairman, Association of Community Pharmacists of Nigeria (ACPN), Pharm. Adewale Oladigbolu, made a valid point on this, when he 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. Therefore, before it begins to take shape in the market prices of medicines, we will be looking at a year down the line. If after two years, they don’t sustain the order, we will have a problem. We will be back to square one.” This reversal must be prevented by every necessary means.

Once again, it is our belief that the conscientious implementation of this executive order will mark a visionary step towards transforming Nigeria’s healthcare system. By eliminating tariffs, excise duties, and VAT, the government is investing in the nation’s health and economic future. For now, Nigeria is on the path to a healthier future, where quality healthcare is accessible to all.

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