20% duty on imported medicines will trigger rise in fake drugs, deaths, say pharmacists

• May and Baker supports zero tax on raw materials
• Urges govt to improve access to foreign exchange
* Seeks long-term funding at low interest rate for local manufacturers
• PSN wants registered member as NAFDAC boss, council’s reconstitution

The Pharmaceutical Society of Nigeria (PSN) has said that the implementation of 20 per cent duty on imported medicines and the sourcing of drugs at a very high exchange rate of N500 to $1 will trigger fake drug syndrome and increase death rates especially due to treatment failure.

Further analysis showed that the prices of essential medicines in Nigeria such as anti-malarial and antibiotics have risen by over 150 per cent in less than two years.

President PSN, Ahmed Yakasai, in letter to the Acting President, Prof. Yemi Osinbajo, also appealed that a seasoned registered pharmacist be immediately appointed as Director General, National Agency for Food Drug Administration and Control (NAFDAC) in deference to the spirit of the NAFDAC Act while the Governing Council of the Agency and Pharmacists Council of Nigeria (PCN) be reconstituted.

Yakasai said the situation has taken the average shelf price of an Artemisinin-based Combination Therapy (ACT) medicine from N700 in 2015 to N1,600 now with a propensity to hit N2,000 before the end of March 2017. “It is the same scenario with anti-infective particularly antibiotics which are common drugs of choice in the country’s health system. It is obvious that what this policy will do is to increase mortality rate in the ranks of consumers of health,” he said.

ACT is the drug of choice recommended by the World Health Organisation (WHO) for the treatment of malaria.

The PSN President explained: “The current National Drug Policy (NDP) 2005 has as its thrust a vision to make safe, efficacious and affordable medicines available to all Nigerians but this new 20 per cent import duty out rightly frustrates the NDP 2005 because drugs sourced at N500 to $1 and which has another 20 per cent import duty added to it cannot be affordable.”

The Society said prior to the new tax policy dubbed Import Adjustment Tax which now imposes a 20 pert cent tax on imported medicines, what existed was a zero per cent duty on imported duty.

Yakasai said the other dimension is that once genuine medicines are not affordable, merchants of death who trigger the fake drug syndrome will return in full measure to do what they do best. He said once the medicine market is flooded with fake drugs, the other dimension of the NDP 2005 to have safe and efficacious drugs would have been compromised.

The pharmacist explained: “Statistically, malaria reportedly killed about 200,000 in 2015 alone when the average price of ACTs was less than N700.00, it is then left to imagine what the fatality rate will be like from 2017 at a price above N2,000. For a country that runs an obviously deficient and unsuccessful National health Insurance Scheme which still compels over a 70 per cent out of pocket expenses for health, we strongly urge Your Excellency to intervene now because of the imminent danger ahead.”

Meanwhile, the Managing Director/Chief Executive Officer (CEO) of May and Baker, Mr. Nnamdi Okafor, said that local manufacturers such as his company supports 20 per cent duty on imported finished medicines and zero taxation on imported raw materials.

Okafor said the rise in prices of medicines in Nigeria is not as a result of the 20 per cent adjustment but as a result of adjustment of forex. “If you have to change the dollar at N500 so there is no way that cost of products will not go up,” he told The Guardian.

Okafor said the solution is to ensure that manufacturers generally of essential products like medicines have access to foreign exchange at minimal official rate and again for government to make available long term funding at low interest rate for people who want to manufacture locally.

“Government needs to make available some cheap funds for those investments and I believe if that is done people will be able to access money at low rates to bring in machines and equipments, to buy raw and packaging materials and then have access to foreign exchange. I believe the price of medicines will come down,” he said.

Okafor said with enough government support, the over 120 local pharmaceutical companies have the capacity to manufacture 100 per cent of the country’s essential medicines need. “When we say essentials medicines we mean malaria drugs and paracetamol,” he said.

Meanwhile, to address the situation, the PSN said the Federal Government should immediately review the 20 per cent import duty on imported medicines along reflected lines and categories.

They recommended the 20 per cent import duty only for Category A, which include all pharmaceutical products that are manufactured in the country, with proven adequate local manufacturing capacity (following an independent forensic audit by an accredited auditor.)

The pharmacists recommended immediate five per cent IAT with upward bi-annual review up to 20 per cent until 100 per cent local manufacturing capacity is reached for Category B, which include all pharmaceutical products that are manufactured in the country, but with inadequate local manufacturing capacity.

Yakasai recommended five per cent IAT in 2019 with upward bi-annual review up to 20 per cent until 100 per cent local manufacturing capacity is reached for Category C, which include all pharmaceutical products that are NOT manufactured in the country, but can be locally manufactured.

He, however, recommended zero per cent IAT until such product or molecule can be categorized under Category C for Category D, which include all pharmaceutical products that cannot be be manufactured in the country either because the molecules are under patent or because we do not have the required technology locally.

He said a fully functional NAFDAC and PCN are germane to optimal performance index of the Health Sector for many reasons. “Presently the food and Drug Advisory Council of the West African Health Organization and the West African Post-graduate College of Pharmacists which is the organ that propels technical advice at the sub-regional level continue to lack direction without the distinguished presence of a Nigerian pharmacist as Director General of NAFDAC,” Yakasai said.

The PSN President said they are also driven by an extremely deep and strong conviction that in the presence of a lawfully constituted NAFDAC and PCN a lot of medicines use and policy related protocol like the Society orchestrated in the recent 20 per cent import duty circular of the Federal Ministry of Finance would have been technically and professionally discerned. This, Yakasai said, is of course without prejudice to the acting management at NAFDAC, which has been in place for almost one year now.