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How to ensure drug security amidst COVID-19

By Chukwuma Muanya
09 December 2020   |   3:55 am
Dr. Lolu Ojo is the Managing Director, Merit Healthcare Limited, a fellow of the Pharmaceutical Society of Nigeria (PSN), a past chairman, Association of Industrial Pharmacists of Nigeria (NAIP) and Chairman of the Nigerian Academy of Pharmacy (NAP) Committee on drug and substance abuse. Ojo in this interview with CHUKWUMA MUANYA made recommendations on how…

Dr. Lolu Ojo

Dr. Lolu Ojo is the Managing Director, Merit Healthcare Limited, a fellow of the Pharmaceutical Society of Nigeria (PSN), a past chairman, Association of Industrial Pharmacists of Nigeria (NAIP) and Chairman of the Nigerian Academy of Pharmacy (NAP) Committee on drug and substance abuse. Ojo in this interview with CHUKWUMA MUANYA made recommendations on how to boost local production of drugs, test kits and vaccines in Nigeria, as well as ensure medicine security.

What have been the challenges producing drugs in Nigeria especially in the aftermath of COVID-19 and government’s intervention fund?
As obtained in most projects of this nature in Nigeria, there is apparent lack of transparency and sincerity in execution of the intervention fund.
As an intervention fund, it is expected that companies that are already doing business with the Banks and taking loans without default should not have much issues. The reality is that most companies were expected to start again from the origin.

Most companies that had been successful in having credit facility or loan relationship with the same Bank at 20 -25 per cent interest rate are now found unworthy of taking Central Bank (CBN) loans or intervention fund (even lesser amount) at five per cent interest rate. It is absurd. It took a long time before offer letters were given and now it has taken forever for disbursement to be made. It is a multitude of challenges ranging from collateral to endless waiting for CBN approval.
It is the usual Nigerian factor that has taken over.

What are your recommendations on how to boost local drug production?
We need to overhaul the entire business environment to move forward. A private investor will put money in a venture that will yield good return and the pharmaceutical manufacturing sector profile does not fit into this definition. Therefore, it is up to Government to create the enabling environment to boost local production. It has to be a decisive policy backed up with sound determination to support the manufacturers. Government must patronise the local manufacturers and offer real incentives for the purpose. The patronage must be backed up with prompt payment.

How far with plans to get some local pharmaceutical manufacturers pre-qualified by the World Health Organisation (WHO)?
I am not sure that anyone is excited about the WHO pre-qualification again. It is an expensive project with no guarantee of return on investment. However, the pre-qualification by WHO is the way to go, if we want to be taken seriously and be part of the global network of manufacturers for intervention projects and other activities.

I think that the National Agency for Food and Drug Administration and Control (NAFDAC) is making it a condition that new manufacturing license will only be granted to the applicant that meets the standard that is in line with the international best practice.

How have COVID-19 and dwindling funds from donors affected local drug manufacturers?
The COVID-19 pandemic has compounded the existing problem that we were grappling with on the economy. We have entered a second recession in three years and it will be foolhardy to rely on the projection that we will exit recession in Q1 of 2021. We cannot get foreign exchange to keep our supplies going. There is no guarantee that any company can sell the stock purchased with high exchange rate at a higher consumer price. Receivable is mounting and Government is the worst culprit.

It has been reported that governments at all levels owe your members for drugs supplied and are not patronising you enough. What is the true situation now and how could it be better addressed?
This is the tragedy of the economic management in Nigeria. It is the same Government that owes the companies that is pushing for tax payment, increase in Value Added Tax (VAT), higher fuel price and increasing other tariffs.

If Government at all levels will pay the debt owed to the pharmaceutical industry, the much needed dynamism will return to the industry. As at March 31, 2020, the government at all levels owed 30 pharmaceutical companies surveyed about N3 billion. This amount will be more than N30 billion if we extrapolate the debt to other active pharmaceutical companies (about 200) in Nigeria.

It is important that government find a way to settle this debt either through special allocation or direct deduction from the source of funding of the affected institutions.

– Government should also look at the operation of the Drug Revolving Fund (DRF) in our teaching and specialist hospitals nationwide to determine why they have failed. A robust and functional DRF will prevent future debt accumulation.

How far with the N100 billion intervention fund/palliative from the Federal Government?
The COVID-19 pandemic and the attendant socio-economic effects all over the world has truly exposed our vulnerability as a nation particularly as medicines availability is concerned. We depend so much on imports to satisfy our medicine consumption needs. About 80 per cent of our drug need is imported from India, China and other countries. With the pandemic, these countries shut down export of medicines to ensure their local needs can be met. Countries like Nigeria were left in a mess and scarcity of medicines was imminent. In Nigeria, the local production depends 100 per cent on imported raw materials and the shut down could spell doom for our healthcare delivery system. The Federal Government should quickly move to arrest this ugly scenario and prevent future occurrence by coming out with the healthcare fund or palliative.

Given the scenario above, the intervention fund came with so much hope and anticipation of a better tomorrow and a future for the pharmaceutical industry. It could also mean that we can ensure the viability of the local pharmaceutical industry and gradually reduce our dependence on imports from other countries.

However, the convoluted implementation process, that has bedevilled so many developmental projects in Nigeria, has ensured that the intervention fund has not brought much joy to the industry.

As at today, only few companies have accessed the fund and these are the big companies with enough weight and influence to get things done. Unfortunately, these companies do not have much good story to tell because the fund availability is marred by the scarcity and subsequent high cost of Foreign Exchange. Invariably, nothing much has been achieved. As we all know, business in Nigeria is import dependent and therefore, heavily related to Dollar availability.

How many local pharmaceutical manufacturers have accessed it?
As discussed earlier, only very few companies have accessed the fund, particularly in the manufacturing group. However, it should be noted that the fund is not meant for the manufacturers alone as the concept covers all the parties in the value chain. We may not be able to give an absolute number of the companies that had accessed the fund or mention their names but it is safe to assume that less than five per cent of the potential beneficiaries have accessed the fund.

The bigger parties must have accessed the fund leaving the bulk of the vulnerable players in the dark. We need good managers at the top of economic management in Nigeria. We need people who are passionate about the nation and her development. We need transparency and honesty of purpose. We need to build institutions that will deliver on promise. We need a new Nigeria.