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Tuesday, July 23, 2024

Tinubu signs new executive order to address rising cost of medicines and other consumables

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As part of efforts to revitalize Nigeria’s health sector, President Bola Tinubu signed an Executive Order aimed at boosting local production of health products and reducing costs.

Targeted healthcare products include pharmaceuticals, diagnostics, devices such as needles and syringes, biologics, and medical textiles, among others.

The new order, according to the Coordinating Minister for Health and Welfare, Muhammad Pate, has introduced zero tariffs, excise duties and VAT on specified machinery, equipment and raw materials.

Mr. Pate, who had hinted at the executive order in February, noted in a post Friday night that the new effort would reduce production costs and improve the competitiveness of local manufacturers.

In recent months, Nigeria has been grappling with rising drug costs at the national level, which is linked to the exit of some multinational pharmaceutical companies from the country.

The country’s over-reliance on imports became evident when pharmaceutical companies such as GlaxoSmithKline (GSK) and Sanofi left the country.

New order

Pate said the Attorney General of the Federation, Lateef Fagbemi, is expected to take the next steps to codify the new order.

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According to the minister, the order is essential for the success of the initiative to unlock the healthcare value chain approved in October 2023 by the president.

“The specific elements contained in the new Executive Order include active pharmaceutical ingredients (APIs), excipients, other essential raw materials necessary for the manufacturing of crucial healthcare products such as medicines, syringes and needles, long-lasting insecticidal nets, and rapid diagnostic kits, among others,” he noted.

“The Order also provides for the establishment of market modeling mechanisms, such as framework contracts and volume guarantees, to incentivize local manufacturers.”

He further noted that the order requires collaboration between the Ministers of Health, Finance and Industry, Trade and Investment to develop a “harmonized implementation framework, streamlining regulatory approvals and reducing bottlenecks.”

The minister noted that agencies such as the Nigerian Customs Service, NAFDAC, SON and FIRS would ensure swift implementation, with special exemptions and waivers in place for two years.

“The implication of this order is to shift toward market-based incentives to encourage medical industrialization, reduce the costs of medical products through import substitution over time, create and retain economic value, and enable job creation in the health care value chain,” he added.

Manufacturing facilities in Nigeria

As of February, the National Agency for Food and Drug Administration and Control (NAFDAC) said a total of 105 applications for the construction and erection of drug manufacturing facilities had been approved across the country.

According to a document obtained by Newslodgeand signed by NAFDAC Director General Mojisola Adeyeye, 35 per cent of the approved applications have completed construction.

He noted that the applicants were at different stages of the registration process as prescribed by the current NAFDAC guidelines on the establishment of pharmaceutical plants in Nigeria.

The agency said over 20 newly registered local drug manufacturers have invested a total of over $2 billion in constructing and completing WHO-compliant facilities that manufacture quality pharmaceuticals and essential medicines for Nigerians.

Ms Adeyeye clarified that the development is aimed at strengthening local manufacturing and is not a replacement for global pharmaceutical giants leaving the country, “they are signs of progress for Nigeria.”

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