Nigeria’s health
sector is currently being threatened by a disagreement within the
pharmaceutical industry over the possible imposition of a 20 percent
tariff on imported drugs.
The conflict arises from the ongoing
Common External Tariff (CET) which places zero tariff on imported
finished drugs but imposes between five and 20 percent duty on imported
raw and packaging materials.
Local manufacturers, consisting of
members of the Pharmaceutical Group of the Manufacturers Association of
Nigeria (PMG-MAN), say the five to 20 percent duty on raw and packaging
materials is already threatening to destroy 150 local drug makers and an
estimated N300 billion investment made so far, in the domestic sector,
calling for a review of a the CET to include imposition of 20 percent
tariff on imported finished drugs.
But representatives of overseas
pharmaceutical companies in the country, under the aegis of the
Association of Nigerian Representatives of Overseas Pharmaceutical
Manufacturers (NIROPHARM), disagree, saying that doing so would prevent
Nigerians suffering from chronic diseases such as cancer, asthma, heart
and kidney diseases, among others, from accessing essential medicines.
“Whilst it is a development imperative for
the Nigerian government to support local manufacturing across all
industrial sectors, we affirm 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, if the CET is retained, supported and sustained,”
said Lekan Asuni, president, NIROPHARM, at a press conference held
yesterday in Lagos.
According to Asuni, who is also the
managing director of GlaxoSmithKline (GSK) Pharmaceuticals Nigeria
Limited, the HS Code 3003 and HS Code 3004 include essential drugs used
in the treatment of chronic diseases, which are on the rise among
Nigerians (current risk exposure is 10.4 percent), and are currently not
produced locally and must then be imported to save lives.
“For instance, recent evidence-based
guidelines for the management of Type 2 diabetes recommend early
‘insulinisation’ for those difficult to control with oral hypoglycaemic.
The resultant effect of increasing the taxes is that the approximately
over six million Nigerians that will qualify to receive insulin and
other life-saving medicines under this guideline will needlessly be
paying more for their medications,” he further said.
While also calling for zero percent
tariff on manufacturers’ raw materials, he said manufacturers involved
in importation are also engaged in research and development which brings
about technology transfer that will be beneficial to the local industry
and the economy.
“Let me point out that you do not jumpstart manufacturing by fiat or decree,” said Ike Onyechi, MD, Alfa Pharmaceuticals and Stores.
“While government must ensure
that manufacturers get their raw materials, I will like to point out
some of the drugs in question cannot be produced here for now, owing to
low capacity of the local industry,” Onyechi said.
Okey Akpa, chairman, Pharmaceutical
Manufacturers Group of the Manufacturers Association of Nigeria
(PMG-MAN) said “the CET as it is currently, spells doom for the local
industry and could lead to low demand for locally made drugs.
“The lack of demand for locally
manufactured medicines as a result of cheap imports, will lead to idle
capacity and will negatively impact previous investments in the sector,
worth over N300 billion,” Akpa said.
Steve Onya, managing director/CEO, Chi Pharmaceuticals, said the
Federal Government should protect local industries by reversing the
tariff structure and imposing tariff on imported products, to avoid
closure of over 150 drug makers, stressing that there is no place in the
world where inefficiency is rewarded.
ODINAKA ANUDU
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