HIGH COST OF DRUGS AND HEALTHCARE

 Tinubu’s awaited executive order to bring down the cost of drugs should back the local manufacturing industry with incentives to grow, writesCalixthus Okoruwa

This is a very bad time for anyone to fall ill. Prices of drugs have shot through the roof and medicines are now increasingly out of the reach of the ordinary Nigerian. It is particularly bad for the millions of Nigerians suffering from chronic illnesses like hypertension, diabetes and glaucoma, who are required to take their medicines for the rest of their lives.

Sundry media reports indicate that in the circumstances, many Nigerians are now resorting to herbal and other concoctions, some of doubtful safety and efficacy.

It is not a good time for the pharmaceutical sub-segment of the health sector, either. No fewer than two major pharmaceutical multinationals have since exited the country, in the face of the difficult operating conditions. With operational difficulties hallmarked by high energy costs, forex challenges, multiple taxes and hordes of bureaucratic hurdles, local pharmaceutical companies are in a tough battle for survival.

In response to the dire situation, President Tinubu is reportedly working on an Executive Order to bring down the cost of drugs in Nigeria.

While it is unfortunate that things in the sector have come to this sorry pass, the situation, paradoxically presents Nigeria with a great opportunity to holistically redress the issues with its pharmaceutical sector and set the country on the path to self-sufficiency and vibrant economic growth.

Nigeria’s current pharmaceutical industry is replete with depressing statistics. Many pharmaceutical companies produce at a fraction of installed capacity. Not surprisingly, the local pharmaceutical industry is unable to meet the domestic demand for medicines and accounts for less than 30% of medicines consumed locally. The balance of 70% comprises drugs imported from all over the world including China, India and interestingly, Bangladesh.

Bangladesh used to occupy a prime position as one the poorer countries of the world. Slowly and surely, its pharmaceutical industry, together with its garment and leather industries are helping to putting a lie to this by collectively driving GDP growth in the country.

The Bangladeshi pharmaceutical industry in particular, portends a number of lessons that Nigeria can learn from if we are to considerably obviate if not completely eliminate the fundamental problems afflicting the pharmaceutical sector and by extension the health and wellbeing of millions of citizens in Nigeria and the wider West Africa sub-region.

In the 1970s and early 1980s the situation of the pharmaceutical industry in Bangladesh was very similar to Nigeria’s. Its local pharmaceutical industry existed on the fringes of an industry that was dominated by the multinational drug companies. The multinational companies, were not only unwilling to set up manufacturing operations in Bangladesh but also flooded the country with all manner of drug products, many of questionable usefulness. Despite its huge population, Bangladesh like Nigeria, relied primarily on imports to the meet the majority of its drug needs.

Things took a dramatic turn for the better from 1982 when Bangladesh developed and adopted a new drugs policy to radically overhaul the pharmaceutical sector. 

The Bangladeshi 1982 Drugs Ordinance set out a number of prescriptions for the pharmaceutical sector. Fundamentally, it sought to protect the local pharmaceutical industry to enable it get a foothold in the country and drive its growth. For instance the law, as the ordinance soon metamorphosed to, drastically reduced the number of drugs in circulation, eliminating wasteful and spurious drugs of doubtful efficacy. In addition, only multinational corporations which had manufacturing operations in Bangladesh were permitted to sell their products in the country. Furthermore, drugs which could be produced locally or their substitutes were no longer permitted to be imported. Citizens had to make do with what was produced in the country.

Faced with what they claimed was a hostile operating environment, multinational corporations either drastically cut down on their operations or like the then multinational, Squibb, exited the country altogether.

With the onus to save the country’s pharmaceutical sector now resting squarely on its shoulders, Bangladesh’s domestic pharmaceutical industry picked up the gauntlet and went to work.

Among a number of strategies the local industry aggressively strove to build domestic skill and capacity, this included transferring skill from those who had worked in multinational drug manufacturing firms to others. In addition, with government support, it labored to enhance rural penetration of pharmaceutical products. Rapidly and steadily, the country’s indigenous pharmaceutical industry amassed cross-sector expertise and experience, growing in leaps and bounds in the process.

Today, Bangladesh produces medicines to meet the needs of more than 97% of its population and exports medicines to well over 100 different countries around the world. In addition, more than 19 different domestic pharmaceutical companies in Bangladesh produce active pharmaceutical ingredients (API) the core ingredients used in drug manufacture. Nigeria only has one company in the throes of producing API.

Bangladesh is manufacturing packaging materials for pharmaceutical products, whereas these are largely imported in Nigeria. In addition, beyond producing the simpler medicines like syrups, tablets and creams, Bangladesh has long begun production of the more complex medications such as Insulin, human hormones, vaccines, anti-cancer drugs and many more.

The Bangladeshi pharmaceutical industry has, on the back of the historic law which the country enacted in 1982, emerged as a wonderful success story for Bangladesh, helping it to meet the country’s drug needs, providing hundreds of thousands of jobs both directly and indirectly for its citizens, enhancing the country’s export earnings and contributing significantly to growing the country’s GDP.

President Tinubu’s forthcoming executive order can imbibe a few lessons from Bangladesh’s success story. There is a need to protect the domestic pharmaceutical industry and challenge it but also to empower it with the wherewithal to solve the drug needs not only of Nigeria but the wider West Africa region. Borrowing a leaf from Bangladesh, the country can rule that medicines that are produced locally for instance, must no longer be imported.

Government can also help to enforce order and professionalism in the drug distribution landscape, ensuring that prescription medicines for instance, are only dispensed on the order of medical doctors and pharmacists. Thankfully, the House of Reps appears to have begun such a move. Streamlining distribution in this manner will in turn enhance traceability and regulatory oversight, reduce drug addiction and help to drastically reduce the prevalence of fake and sub-standard drugs.

President Tinubu’s Executive Order needs to deliberately embody a long-term perspective. Let it back the local manufacturing industry with the incentives and wherewithal to grow. It should empower the local pharmaceutical industry with an intelligent taxation scheme that promotes growth. A 5% tax on a thriving pharmaceutical industry worth N500b is eminently worth more than a 40% tax on a moribund pharmaceutical industry worth N10b. Taxation would need to be more futuristic and prepared to reap long-term gains.

President Tinubu’s Executive Order should also facilitate systematic access to affordable capital. In return, it should make these domestic corporations accountable to the country by way of specific key performance indicators which can be jointly agreed by government and the industry. 

Like the telecom industry which embraced rapid and widespread growth on the back of the revolutionary Nigerian Telecoms Act of 2000, Nigeria’s pharmaceutical industry can unleash a strong wave of economic growth and development in the face of painstakingly crafted and expertly executed policy. President Tinubu must seize this moment to make a long-lasting difference.

·      Okoruwa, a pharmacist and communications professional, works for XLR8 a communications company headquartered in Lagos