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 Health & You:
Drugs, tax and an ailing pharmaceutical industry
Aug 20, 2015
By: Victor Adeoye

Nigeria: -

The road to good health is multifaceted; it could be as smooth as maintaining personal hygiene, eating right and exercising on the one hand and it could be using drugs or other forms of treatment to correct a deficiency on the other hand. Either way, good health has a price.

Some persons, due to a careless act or ignorance, which shouldn’t be an excuse, have lost their good health along the line and are now left with different control damage measure chief of which is living on drugs and in extreme cases, life support facility.

Drugs have constituted a very essential part of medicine and health, but unfortunately, it is becoming more burdensome for a common man who relies on drug for survival to conveniently afford them because of the high cost.

The Nigeria health sector is bedeviled with different challenges; poor facilities, funding, structured and effectively programmes for good health delivery and as a matter of fact, division in the different units of the health sector.

With over three million cases of diabetes in 2014 and HIV, and several millions also suffering from cancer, the use of drugs as a life saving measure to these terminal diseases cannot be overemphasised. What now remains a lingering problem is the affordability of these drugs for people concerned.

As of now, Nigeria is not yet a manufacturer of life saving drugs and that means all the drugs the country rely on to keep over 10 million Nigerians who need these drugs alive, is by importing and these have raised a lot of concerns from both stakeholders and analysts in terms of costs and availability in the right quantity.

Recently, there have been complaints from local manufacturers, questioning government’s role in supporting local production of drugs. The government once introduced the Nigerian Pharmaceutical Development Fund (NPDF), to boost local production of medicines and help Nigerian companies modernise their facilities but after many years, not much has been recorded in the pharmaceutical industry.

Also, the implementation of the Economic Community of West African States Common External Tariff (ECOWAS CET) has raised lot of brows among stakeholders.

Under the new policy, goods are grouped into five categories of tariff rates: zero, five, 10, 20 and 50 per cent. Goods dutiable under the zero per cent category are special drugs as well as industrial machinery and equipment. Under the five per cent category, goods dutiable include raw materials and other capital goods. Those dutiable under the 10 per cent category are intermediate goods while finished goods attract 20 per cent import tariff. Finished goods that can be manufactured locally, however, attract 35 per cent import tariff.

The Association of Nigerian Representatives of Overseas Pharmaceutical Manufacturers (NIROPHARM), recently appealed to the Federal Government to implement the zero per cent tax on raw materials, excipients and packaging on imported substances.

The president of the group, Lekan Asuni, while speaking on the access to essential medicines in Nigeria and reacting to the call by the Pharmaceutical Manufacturing Group of the Manufacturers Association of Nigeria (PMGMAN) expressed that there are more benefits accruable to the wider Nigerian pharmaceutical industry and the citizens if the CET tariff is retained, supported and sustained.

“These NIROPHARM assertions and positions are to replace the recent calls by the PMGMAN, suggesting an import adjustment of tax of 20 per cent on imported finished products of HS Code 3003 and HS Code 3004. Whilst it is a development, imperative for the Nigerian government to support local manufacturers across all industrial sectors, NIROPHARM affirms that this PMGMAN position, albeit, based on an unsubstantiated premise that any additional taxes on the products will be passed on to the patients, should be deemed invalid as there are more benefits accruable to the wider Nigerian pharmaceutical industry and most importantly Nigerians (citizens and patients), if the CET tariff is retained, supported and sustained,” he said.

Some of the drugs in the HS Codes 3004 and 3004 include medicines that are used to treat some chronic diseases like cancer, asthma, heart and kidney problems.

In a bid to strengthen the capacity of local manufacturers, it is noteworthy to prefix that the Federal Government has out rightly placed a ban on the importation of drugs that are manufactured locally.

While reacting on the stance of NIROPHARM a top ranked member of the Pharmaceutical Society of Nigeria (PSN) who spoke anonymously stated that those that are clamouring for zero per cent tax on imported drugs is basically the business group of the PSN that also has pharmaceutical industries they are dealing with in the country. He included that though anybody has the right to make a statement concerning any issue, “the PSN would come out with a statement soon,” he said.


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