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Drugs, tax and an ailing pharmaceutical industry

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By Victor Ogunyinka

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; a poor facility, funding, structured and effective
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
relies on to sustain over 10 million Nigerians who need these drugs, is by
importing and these have raised a lot of concerns from both stakeholders and
analysts in terms of costs and availability at 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 eye 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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