Nigerians need subsidy on medicines

Six months into this administration’s policy of naira devaluation, the rough edges of the measure have dented the health sector, as the high cost of medicines, too high to be afforded by low-income earners, has emerged as a serious social problem. A failed attempt by government to merge the so-called official and parallel foreign exchange markets has shot up the cost of the US dollar. A recent report by the Daily Trust newspaper indicated that the retail prices of pharmaceutical drugs, mostly imported from China, India, Pakistan, and parts of Europe, have skyrocketed by about 300 per cent, over and above the value of the naira, creating serious health crisis in the country.

This ugly trend was foreseen, but the authorities played the ostrich by pretending that the people would adjust to the consequences of its disastrous forex policy. Sensing that the cost of producing common medicines was made impossible by the difficulty in accessing forex at affordable rate, and considering the weakening purchasing power of the Nigerian public, several international pharmaceutical companies relocated their concerns from Nigeria to neighbouring countries.

Companies like GlaxoSmithKline (GSK), thought to be rooted in the Nigerian health sector for decades, shut down its operations. Unilever Nigeria changed its business model by ceasing to produce homecare products, among them pharmaceutical drugs.  Even the few other local pharmaceutical firms still operating in the country have huge financial barriers, due to the high cost of importing Active Pharmaceutical Ingredients (APIs), epileptic power supply, general inflationary trend and the forex crisis.

The predicament facing the country today is the consequence of the lack of long-term plan for the health sector. The existing government-funded primary, secondary and tertiary health sectors have since been reduced to consulting clinics, as patients have to make out-of-pocket purchases for medicines. No responsible leadership leaves its healthcare to chance; they put in place structures for research and manufacturing of critical pharmaceutical medicines for their citizens. Even Third World countries like India, Pakistan, Indonesia, Malaysia, South Korea, Taiwan… have laid the solid foundation for the manufacture, distribution and availability of essential medicines for local consumption and export. But not Nigeria.

The situation in Nigeria, in spite of its potential to become an exporter of medicines, is the reverse, as the country is almost a net importer of essential medicines. If there were a solid local production arrangement, the forex policy shouldn’t have created the kind of upset Nigerians as exposed to in the aftermath of the devaluation of the naira.

Now, the people are at the mercy of peddlers of substandard or fake medicines and the dangerous but ubiquitous herbal solutions to all kinds of ailments being sold from rural communities to urban centres. The predicament has created a boost for these killer dealers in medicines who are even emboldened by the fact that regulatory agencies are either in bed with them or have gone to sleep on their responsibilities. The people are left to their fate.

Healthcare is very critical to the survival of the society. Therefore, the Bola Ahmed Tinubu administration must not throw up its arms and expect the confusion to settle without strategic interventions. First, we call on government to make provisions for a special fund to support local manufacturers of essential drugs. They could be given loans and advances at, perhaps, a single-digit interest rate, to enable them import APIs, manufacture and sell the drugs to the Nigerian populace without being put under the pressure to repay to banks at the deadly double-digit interest rate.

Alternatively, we encourage government to revisit its decision on the collapse of the forex windows, by creating a special window for importers of essential raw materials for the manufacture of essential drugs. The government could also remove or reduce the tariff on importation of APIs and some essential drugs, in order to beat down the cost the final consumer pays on such medicines.

The Tinubu administration could also borrow a leaf from the Petroleum Trust Fund (PTF) approach during the military regime to healthcare. At that time, part of the gains that accrued to the government from the increase in the pump price of petrol was used to subsidize the cost of essential drugs at hospitals across the country. Under that arrangement, PTF, noticing the out-of-stock syndrome in Nigeria’s hospitals and clinics, called a meeting of stakeholders, among them pharmaceutical companies and the Manufacturers Association of Nigeria (MAN). The PTF identified the essential drugs, paid for their manufacture locally and bore the cost of distributing them across Nigeria, at almost no cost to the final consumer. The subsidy was a huge relief to the people, a measure that many reflect upon now with nostalgia.

This government could tinker with the provisions of the Procurement Act in order to embark on such an emergency measure to deal with the unaffordable cost of pharmaceutical drugs in the country. Without an urgent subsidy on medicines, the country will soon run into a serious crisis in the health sector.