…PMG-MAN seeks 20% tax on imported finished pharmaceuticals

By Sola Ogundipe & Chioma Obinna

THE comparatively high cost of drugs in Nigeria has long been recognised as one of the factors contributing to inaccessibility to affordable healthcare services by majority of Nigerians. The situation is worsened by unavailability of reliable health insurance plans to the generality of the masses who continue to pay out of pocket.

Although a sizeable percentage of drugs that are utilised for healthcare delivery is  imported, the local pharmaceutical manufacturing industry has been struggling to keep up in light of the national policy on drug importation.

Now, there are worries that the cost of drugs which constitutes a significant portion of the total cost of healthcare may soon be beyond the reach of the average Nigerian if the infiltration of imported finished drug products is not checked.

Already, local drug manufacturers have raised alarm on the danger of over- dependence on imported drugs, which they say, poses a security risk to disease reduction, as well as economic, social and political stability.

Common External Tariff

The Chairman of the Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria, PMG-MAN, Okey Akpa, said the recently introduced Common External Tarrif, CET, in the pharmaceutical Industry was a threat to fortunes of the local industry. The CET places zero tariff on finished imported medicine while essential raw and packaging materials required by the industry for local medicine production attracts five percent to 20 per cent.

“This policy undoubtedly, spells doom for the local industry as imported medicines will become far cheaper than locally produced ones. This situation is inimical to the survival of the local  pharmaceutical manufacturing sector,” Akpa argued. In his commentary, called for an import adjustment tax of 20 percent on imported finished pharmaceutical products as applied to other sectors where Nigeria has capacity as allowed by the CET.

“Under the National List within the CET, input into pharmaceutical manufacturing should be allowed to be imported at zero percent by bonafide pharmaceutical manufacturers. “We have made representation to Government and we have expectations that the government of President Muhammadu Buhari will address this anomaly expeditiously to avoid the collapse of the pharmaceutical industry.

Dependence on imported drugs: Akpa who spoke extensively on the dangers pose by dependence on imported products said drugs like anti malaria drugs will suffer as the CET will discourage local manufacturers from continuing operations. “All we want is for the government to create a protective tax of 20 percent for imported finished pharmaceutical products to encourage local manufacturers.”

The issue will be further brought to light during the Nigeria Pharma manufacturers Expo 2015 coming up  September 7-9, 2015 in Lagos. About 3,000 participants, from across the world as well as Federal Ministries of Health, Industry, Trade & Investment, NAFDAC, SON, Bank of Industry among others are expected.