Local drug manufacturers kick against new govt policies

The Pharmaceutical Manufacturers Association of Nigeria (PMGMAN), has raised dust over the  New
Drug Distribution Guideline, NDDG, and Common External Tarrif, CET, saying that they are threats to the survival of the local pharmaceutical industry.

Expressing their fears at a world press conference yesterday in Lagos, they stated that implementation of the NDDG which began 1st July, 2015, has handed over the pharmaceutical industry to cartels and syndicates and in return, would increase the cost of essential medicines in the country.

They also demanded that the implementation of the policies should be deferred and be refined to reasonably accommodate all stakeholders.

President of the Group, Mr. Okey Akpan, who gave a run down of the possible implications of the policies, said apart from reversing gains made in the fight against fake drugs, and forcing locally manufactured drugs into extinction, the NDDG, will add an additional layer to the current distribution model that will increase the cost of medicine by 35 percent.

“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,   and there is a need for urgent review.

He alleged that the CET if implemented as it is,   will have far-reaching implications on the industry and the country.

Akpan said the policy will impact negatively in the area of employment,   capacity utilisation and loss of investment, increase in fake and sub-standard products and skills stagnation. Others are considerable depletion of scarce foreign exchange due to continued dependence on imports and no contribution to GDP growth.

In his recommendation, he called for an import adjustment tax of 20 percent to be imposed immediately on imported finished pharmaceutical products of HS code 3003 and 3004. In addition, he appealed that pharmaceutical raw materials should be allowed to be imported at 0 percent by genuine pharmaceutical manufacturers.

Calling for immediate review,  the PMG-MAN President said the NDDG, if left as it is, will lead to significant reduction in access to essential medicine, hike in the price of essential medicine, elimination of current wholesalers, unemployment, loss of business and investment in the pharmaceutical value chain, among others.

“Our position as an industry is that a new distribution guideline be allowed to evolve after the wholesale system is sanitized.   This approach will allow for inclusive participation of all current stakeholders and especially the wholesalers.”

The Group recommended that an Import Adjustment Tax of 20 per cent on imported finished pharmaceutical products should be imposed immediately as applied to other sectors where Nigeria has capacity as allowed by CET. In addition, under the National list within the CET, input into pharmaceutical   manufacturing   (raw materials, excipients and packaging) should be allowed to be imported at zero per cent by bonfire pharmaceutical manufacturers.

Corroborating his views, Chairman and Managing Director,   Fidson Healthcare Plc, Dr Fidelis  Ayabae, advised that Nigeria should follow the current world trend of diversification and inclusiveness rather than reversing to monopoly which will give rise to cartels and syndicates. He therefore condemned a situation where the NDDG will hijack the entire distribution network.

Also speaking, former President and Chief Executive Officer,   Niemeth Pharmaceuticals Plc, Mazi Sam Ohuabunwa, warned that implementation of CET as it is now will work against government’s present policy of industrialisation. He said   it does   not make sense to say people should not pay tariffs on finished imported products and ask local producers to pay tariffs on raw materials.

On Mega Drug Distribution Centre (MDDC), Ohubunwa who was also former Chairman of Nigeria Economic Summit Group (NESG), said that the coming in of MDDC should notnot hinder wholesalers from having access to PMG-MAN members and retailers.
Source: Vanguard