‘Our Billions Of Naira Investments About To Be Wiped Out!’ -Pharmaceutical Manufacturers Scream.

…as top players claim sector on the brink of collapse

Pharmaceutical Manufacturers are in throes of very deep and agonising pain.

And the reason for this development is simple – billions of naira investments into the sector are about to be wiped out!.

Disclosures made to socieynowng attribute this development to unfavourable policies that is strangulating the efforts of indigenous manufacturers.

The chief threats of the industry’s mega investments are listed as recent adopted Common External Tariff and implementation of the National Drug Distribution Guidelines.

The Common External Tariff adopted in June 2015 is said to harmonise Ecowas member states and strengthen common market is said to put a zero tariff on ‘finished imported
Okey Akpa

medicine – while essential raw and packaging materials required for local medicine production attracts 5% to 20%.

According to players within the industry, this policy naturally makes imported medicine far cheaper than locally produced ones creating ‘damaging consequences for local pharmaceutical manufacturing sector’.

According to Okey Akpa, Chairman of the Pharmaceutical Manufacturing group of the Manufacturers Association of Nigeria ‘it reverses the gains made by towards the nation’s self sufficiency in essential medicine and opens all doors for total importation of finished medicine…..

‘this policy spells doom for the local industry as imported medicines will become far cheaper than locally produced one’

Further revelations made to societynowng.com revealed that the pharmaceutical manufacturers’ body in striving to get the government to reverse the trend outlined the specifics immediate and long term effect of the adoption of the Common External Tariff.

Some of highlighted effects are looming unemployment due to local manufacturing sectors inability to sustain to operation, idle capacity and loss of investment occasioned by lack of demand for locally manufactured medicine as a result of cheap imports, increase in fake and substandard products brought about by inevitable influx of cheap imported medicines of doubtful quality, skill stagnation and brain drain resulting from dwindled of weak manufacturing sector, considerable depletion of scarce foreign exchange due to continued dependence on imports and no contribution to GDP growth as a result of weak or non- existent local manufacturing industry.

The pharmaceutical manufacturers advocate an import adjustment of 20% on imported pharmaceutical products of HS Code 3003 & 3004 to be imposed immediately as applied to other sectors where Nigeria has capacity as allowed by CET.

Additional a zero tariff on raw materials to be imported by bonafide pharmaceutical manufacturers is equally advised.

Also said to be threatening the investment in the sector put at over N300b is the issue of new national drug distribution guidelines.

According to players in the sector, the meat of this is that the government has approved just four key marketers to distribute essential drugs in the country!,

What this means according to Akpa is that ‘….the government has handed the pharmaceutical industry to cartels and syndicates, which will increase the cost of essential medicines in the country by inefficient extension of the distribution chain!’

The chairman and his association claim the approved distributors are foreigners with limited understanding of local practise and lacks distribution system to deliver essential medicines to end users.

‘at the end of the day, they will rely on the open market distribution network to perform….so where is the brilliance in that’ a stakeholder pointed out.

While officially kicking against the adopting of the new national drug distribution guidelines, the pharmaceutical manufacturers outlined the looming fallout of the government action which took effect on July 1

Significant reduction in access to essential medicine as a result of lack of distribution network that will deny people in certain areas access to medicine, hike in price of essential medicine as a result of new additional layer to the distribution chain, elimination of current wholesalers distribution chain which accounts for some 80% drug sources to hospitals and related health care facilities as backbone of the current distribution network, huge job loss for the over one million employees that work for manufacturers as marketers of importers directly or indirectly, loss of business for manufacturers as a result of low turnover and over N100b represented as receivables tied to the wholesale level of the value chain and others.

The association wants the government through the federal ministry of health to allow a new distribution model to evolve after the wholesale system is sanitised in other to minimise the possible collateral damage that may occur if stakeholders are not engaged.

The association in crying out to the world about the threats to the industry claimed to ahev gone through different ‘proper’ channels to engage the government but the policies usually come out as if no representation were made.

Akpa and his colleagues claim to be crying out as part of efforts to create an engagement point with the government – and ultimately save the pharmaceutical manufacturing industry from looming collapse.