Drug insecurity persists as customs implements 20% duty on imported medicines
• Survey by NGO shows over 100 per cent increase in prices of essential medications
Most Nigerians may not be able to afford even essential medicines as the Nigerian Customs Service (NCS) begins the implementation of 20 per cent duty on imported pharmaceutical products.
A circular released recently from the Federal Ministry of Finance titled: “Import Adjustment Tax”, the minister, Kemi Adeosun, ordered the introduction of 20 per cent tax on imported medicaments. This means that for every imported drugs and allied products a minimum duty of 20 percent is payable to the coffers of government through the Nigeria Customs Service.
This extra payment, analysts insist, will result in more than proportional increases in prices of drugs, which definitely will cascade down the ladder to the common man in the street, the very people the government vowed to give affordable and available health care.
Unfortunately, the policy directive is even contrary to World Trade Organisation (WTO) recommendation, which the immediate past government of former President, Goodluck Jonathan, adopted during his tenure.
The WTO recommended in 1988 that not more than five per cent duty on medicament as a way of fast forwarding the achievement of global vision of affordable universal healthcare and eliminating diseases.
Consequently the Economic Community of West African States (ECOWAS) Committee on Health, having taken cognizance of paucity of drug manufacturing firms in the sub-region, further recommended a waiver on the duty and recommended zero duty on imported medicament.
Prior to this, Nigeria implemented a policy of 20 per cent duty on medicament excluding five per cent Value Added Tax (VAT). In 2013, however, the Federal Government reviewed its policy and adopted the ECOWAS recommendation.
Now there seems to be a policy reversal which when combined with the deleterious effects of devalued naira and high exchange rate and unavailability of the dollar, and other foreign currencies have accentuated the suffering of the masses and complicated their health challenges, which the President Muhammadu Buhari (PMB’s) government vowed to drastically reduce.
Indeed, the prices of medical services and drugs have gone haywire as a result of this policy somersault. According to ministry of finance, this directive is necessitated by the need to ramp up revenue generation and support local drug manufacturing. This means a reversal of the maxim: health is wealth.
However, Nigeria currently has less than 300 drugs manufacturing companies of which less than five per cent are World Health Organisation (WHO) certified.
According to official statistics, these 300 companies can only produce 20 per cent of our national drug needs. To worsen the situation some of these companies are no longer operating optimally because of the present economic conditions. This development will defeat whatever progress had been achieved in addressing the menace of fake drugs in the Nigerian health sector as well as defeat the vision of revitalizing 10,000 Primary Health Centres (PHCs) nationwide.
Managing Director and Chief Executive Officer, May and Baker Plc., Nnamdi Okafor, told journalists that pharmaceutical sector was in dire need of forex to produce drugs and vaccine for the healthcare system. He said that his company and others in the pharmaceutical business did not benefit from Central Bank of Nigeria’s (CBN’s) forex allocation to the manufacturing sector.
Okafor said: “Unfortunately, over 98 percent of raw materials used for vaccine production locally are imported into the country. But I can tell you that what is happening to importers of finished products are also happening to us.
“You have heard the pronouncement from government that manufacturers got some special forex allocation for importation of raw materials; that did not happen in our sector; I can assure you. We have not been able to bring in our packaging materials into the country for many months because of forex challenges and in fact, that we survived last year was a miracle to most of us in this country.”
The May & Baker boss further explained: “I can tell you that we cannot survive anymore. It is not something we can live with any longer. By the first quarter of this year, most factories that are still standing will begin to shut down operations because the situation with forex is getting worse daily.
“For the past six months, it has been challenging to cope with manufacturing. It was a bit better in the first half of last year, because you could get forex allocations, maybe 20 per cent of your requirements. But in the past six months, we have not got anything from the banks. So what does this mean? As I speak to you, we have not been able to order for raw materials that normally by now should be in Nigeria for this year.”
This revelation from Mr. Okafor expressly confirms that even the move of slamming 20 per cent duty on imported medicaments, to support local manufacture of drugs, definitely will not yield the intended result as the realities on ground frustrate the policy.
Many analysts are of the opinion that government ministries, departments, and agencies, judging by its policy flip flop and uncoordinated implementation, are confused about the direction to follow in terms of meeting PMB’s mandate of availability and affordability of drugs and other healthcare products to the majority of Nigerians.
A Non Governmental Organisation (NGO) by name” I CARE” conducted a market survey recently and reported astronomical increases in prices of drugs commonly used in the treatment and/ or management of some of the health challenges of Nigerians especially in the rural areas.
I CARE, in a press release, listed some of the drugs to include the following: Co – Dovan, an anti- hypertensive drug, costs N10, 000 per pack against N3, 000 before the 20 per cent duty, Meropenem Injection, a lifesaving anti – biotic, normally used for complicated infections, now sells for N18, 000 for one injection instead of N4, 600 for one injection. Felene is non – steroidal anti- inflammatory drug, normally used by arthritis patients (one of the auto – Immune diseases) to be managed for life. It was N180 per pack, now it is N500 per pack. Insulin for diabetics, 100iu was about N900, now it is about N3000 in the shops. Ketamin injection is an anasthestic agent used for surgical operations. It was less than N1, 000; now it is N8, 000.00. Omeprazole is an anti–ulcer drug. It was N150 a pack but now it is N1, 000 and above, Anti- Tetanus Serum (ATS) is another life saving injection for dog bites, nail or sharp rusty objects accident. It was N6, 000 but now it is N45, 000. Omega H3 is a multi-vitamin capsule; it was N8, 000 per box of eight packets. Now it is N16, 000 per box of eight packs. Vitamin B complex injection (in the main) aids recuperation of sick patients. It was N1, 800 per pack, now it is N7, 000 in the shops. Fortuin injection in the main drug is used for crashing post operation pains. It was about N7, 500 per pack of 100. Now it is N18, 000 in the shops. Gyno – Trosyd is for virginal candidiasis. It used to be N1, 400 per pack. Now it is N2, 500. Also, malaria drugs for children and adults, which used to be sold for, between N200 and N500, now cost N1, 000 and above.
I CARE, according to its National Co-coordinator, Toritsheju Aghofofo-Kete, said it carried the survey to highlight the combined negative effects of shortage of forex and the 20 per cent tax on imported medicaments on the Federal Government’s promise to make drugs available and affordable to most Nigerians.
The pathetic and sad story of Mrs. Mercy Okeke (not real name) a diabetic patient who is on daily insulin injection gives a vivid picture of privation and the dilemma of her life choices. According to her, almost all her income as a petty trader is spent on insulin. Moreover, her medical history, a hitherto private matter, has become a subject of discussion among relatives and close friends as she regularly besieges them with requests for financial assistance to supplement her income. She said she now spends close to N65, 000 monthly as against the N25, 000 to N30, 000 she used to spend on insulin. In addition, she has to support the education and livelihood of her family of six having lost her husband two years ago.